The "price war" is playing well between Chinese e-commerce companies and retail giants

When a retailer tries to squeeze competitors by depressing prices, a "price war" kicks in, and other competitors try to keep prices down, causing a series of consequences. A massive "price war" is playing out between Chinese e-commerce companies and retail giants.

Industry insiders pointed out that the Chinese electric dealer "price war" capital lies in the channel monopoly of sales terminals, the dependence of channel monopoly leads to the continuous lag of Chinese enterprise innovation ability, relying on low-cost competition to excavate power.

August 14, Big shopping website Jingdong Mall CEO Daiju East two micro-blog to become "electric business hegemony" fuse. Jing-dong, Suning, Gome and other E-commerce market occupies nearly 80% of the share of E-commerce Enterprises have released a "price war" thick smoke. More and more businesses have been involved for three days.

It is undoubtedly the core goal of "price war" to compete for the huge reality and the potential electricity consumer resources. As of December 2011, China's e-commerce market turnover amounted to 6 trillion yuan, an increase of 33%, in the next few years, E-commerce services industry will usher in the "Golden Age", 2015 or break through the scale of 10 trillion yuan.

The electric Dealer "price war" relies on the huge terminal channel, the goal is also through "the price war" attracts many consumers, occupies the bigger market share and the consumer terminal.

But consumers are not necessarily willing to pay. Along with the network promotion and electric dealer "price war", often is the complaint upsurge. According to China's e-commerce complaints and rights of public service platform monitoring shows that the user feedback more problems for the Web site system paralysis, order cancellation, virtual standard original price, the next single no goods, slow delivery, not in place after sale.

One Amoy to the third party "post-war information" shows that the "price war" first day, the 6 big electric appliances 117,000 pieces of large electrical goods, only more than 5,000 commodity prices have fallen, accounting for about 4.2%. Many netizens do not approve of the "price war".

Not satisfied with the home appliances manufacturers. Changhong, Hisense and other enterprises have said: "The price war" can not exceed the production of enterprises and sales of the agreement between enterprises.

Zheng Weixuan, Ph. D. of the regional economic history of Fudan University, said that the development of Chinese enterprises exist "model inertia", once the single mode of profit, profit, sales, market share of the decline, it is rightly considered to be the result of peer competition, so hope that through a simple "price war" way to knock Continue to maintain profit margins with huge sales.

"A single profit model, lack of innovative ability, will inevitably lead to a single competition, industry growth space is limited, and finally rely on price war to safeguard their own interests." Zheng Weixuan pointed out that Chinese enterprises lack the achievement of "Hundred years brand" bearing.

In the late 90, Changhong, Haier and other household electrical appliances industry has also occurred in the "color TV price war" "Refrigerator price war" "Microwave oven price war."

Wu Xiaobo, a famous financial writer, points out that two "price wars" the electric Dealer "price war" is the distributor rather than the manufacturer, can only bring about the change of business model and consumption habit, it is impossible to promote technological progress; Because of the different arbitrage methods, venture capital is more savage than industry; because of the rigidity of manufacturing profit and logistics cost , in the long run, the impact on the retail prices of home appliances is likely to be negligible.

After decades of development, China's home appliance enterprises have been rid of the "channel Dependence", to become masters of the global core industry chain and independent innovation capabilities of enterprises. With the continuous introduction of new technologies, new products, to maintain their own profit margins.

By contrast, the rising power quotient group in recent years may need to brake in time. The risk of "price war" focusing on short-term effects and immediate interests is enormous and hidden. Industry insiders said that this will not only bring a serious impact on the individual development of the electric business, but also on the benign development of E-commerce to bring trust and integrity of the double crisis.

Foreign retail giants and e-commerce giants have shifted from "price wars" to "value wars" and "service Wars".

Amazon, for example, is less willing to put more money in a "price war". Wang Hanwa, Amazon's China president, says Amazon's choice is to make the consumer experience a good place for consumers to speak for you. As long as adhere to the core competitiveness, must be able to be divided into their own cake.

"A simple advertisement or short-term price reduction is not really a lasting trust." "Online shopping enthusiasts Wang Zixian said that the continuous good purchase experience, in order to win the real loyalty of consumers."

"Chinese enterprises should be in the" loss and not make a yell "in the price war reflect the development model, look long-term, scientific development, can be quenched and tempered" hundred Years brand. " "China E-commerce Research Center analyst Mo Dai Green said.