What are the chances of a price war-prone electric dealer?

Guests in this issue:

Tang Xin Consulting Senior Advisor

Shou e-commerce analyst

Vice President, Pengliang Bowser Shopping Network

Zhou Ding, partner of Beijing University vertical and horizontal management consulting company

Note：

Whether it is "electric business bubble Theory" or "2012 Electric business Winter Theory", despite the sharp words, but all reflect the industry has been a long time, but also wrapped up a series of problems: the electrical business in the pursuit of speed and passion in the process, whether the lost direction? After group buying, which electric business area is likely to become the new "Trouble Maker"? In the chaos of price wars, the stagnation of IPOs and the turmoil of traditional retail giants, what are the opportunities for electricity companies?

Topic One

Price war who likes who sad

Since its inception, electricity business is not very peaceful, the Big Brother between the High-profile competition is omnipresent, after the sale, spell logistics, spell user experience ... In many "fight" the way, the price is undoubtedly the most affect the people, but also the most recent electric dealers. August 14, Jingdong Mall CEO Liu First bursts of micro-bo, claiming that "Jingdong all the electricity guarantee than Gome, suning chain cheaper than at least 10%", ignited a so-called "history of the most brutal price war" fuse.

However, in a few days, Liu deleted three days ago to expand the price war to the whole category of micro-blog, which also implied that the entire Chinese electricity market, the price war has died down. In this vigorous price war, who is the real beneficiary of this battle?

Tang Xin: The biggest profit of price war is definitely consumers, in the process of electric business war, everyone is to spell prices, driving the whole industry chain price decline.

Although the electric business war played a vigorous, every home in the price, in fact, many of the electrical business involved in the war, such as Jingdong, Suning easy to buy all the eyeballs, although some products may not be very high profit, but the flow of more generally, so both sides are winners. Some of the electric-business firms that are not involved in the war may be the only losers.

Of course, for suppliers, in this process has been in a weak state, whether there is no electric business war, they are in the bargaining power of the weak state. In fact, in the course of the war, the supplier would like to see more and more channels, electric business enterprises can stand out, so that will not appear now like the Beijing-east of a single big phenomenon.

Shou send: "8 15" price war is Jingdong Mall, Suning easy to buy and Gome mall through large appliances, the standardization of strong enough market segments, the first relatively complete to the offline retail system declared war. But this is only one of the fruits of the war, more crucially, we can clearly see Jingdong and other E-commerce enterprises to the line of strong penetration, and Su Ning and Gome under the line of the king to the line of expansion of the situation.

For consumers, from the surface is to enjoy a low-cost feast, but in fact, sales promotion is far from meeting consumer expectations. And consumers in the frequent price war, advance the consumer demand, will also result in the second half of the price war effect will continue to decline.

In terms of traffic and trading volumes, the electricity dealers involved in the price wars are harvested, this time, including micro-blog and other marketing platform of the energy has been released, especially for the offline user impact is very large, so participate in the main body of the war such as Gome, Suning, Jingdong line business is certainly a great upgrade.

But in contrast, Gome and Suning's earnings will be more obvious. This price war is going to explode online, such as Gome and Suning before the online business on the user side of the brand building is not very high, through this marketing, many customers of Gome and Suning's online business have more understanding, and feel their low price advantage, this is more favorable place.

For Jingdong, this is the first time E-commerce enterprises to pick the front of the retail channel, the Chinese electric business industry can be said to have a milestone significance.

Zhou Ding: Comprehensive view, the previous period of the electric business war, Liu should have their own purposes, according to a Amoy data show that the price of jingdong is not too much action, but the United States to make the most concessions. Originally thought Liu is directed at Su Ning's share price war, but afterwards Suning's share price back to rise.

The price war is essentially a capital war. I think the price after the war, Jing Dong has improved the reputation of suning Gome shop, successfully nurtured two big competitors.

The supplier is a victim, whether large or small and medium power suppliers, when the price war, once the battle, the supplier will generally have some requirements: price reduction, credit, acceptance (also equivalent to credit), shop or clean up inventory. Although cash suppliers also have their own shop, do not rule out the success of several large enterprises, but personally think most will not succeed. Because the operation has specialized, the electric business in the channel, the logistics supporting facilities all aspects occupy the superiority, this is precisely the supplier lacks.

Topic Two

How long does the price war last?

Closer to the recent price war, the point of time, found that "open time more and more irregular", the past "price war" is mainly around the festival time nodes. Take the recent two time points as an example, before August 15 The price war time is June 18, the interval is only two months, and neither holiday nor consumption hot season. Is the price war the mode of competition just a "flash in the pan" or a normal?

Tang Xin: Now this industry is in a situation of white-hot competition, we are all want to fight for traffic, and strive to do the brand without considering profit, not in a stable, continuous profit stage, so the price war will continue.

Shou: Price war is not a unique way to promote sales, but in the retail industry prices are the core of things, whether it is home appliances or other categories, this is a problem of normality. For the electricity quotient, because the channel is more transparent, the commodity comparison also is more transparent, therefore the price war this kind of promotion method is easier to adopt. However, completely abandon the commercial principles to do price war is certainly problematic, the current price war has not been demonized degree.

In the second half of 2012, the price war will be more brutal, "8 15" price battle is only a start. Everyone electricity is Su Ning and Gome's strong category, but also open the category of price war, later in this field will continue to compete; 3C Digital and department stores competition will be gradually developed in the second half of this year. In the "8 15" price war a few missing protagonists, such as the cat, Amazon and when the future will also be in their respective advantages of the category to launch a more brutal battle.

Pengliang: At this stage of the most fierce price war are oligarchs, such as the line of large enterprises Gome, Suning, line of the leading boss Jingdong. From the point of view of advertising, a lot of electronic advertising sites last year everywhere, but this year can only see some big corporate ads. In full competition, the price war between peers and other competitive battles are normal, because the network capacity is very large, competition is unavoidable, many times the price war will become a protracted war or consumption warfare. Price is an important reason for consumers to choose online shopping, so the price war will continue.

Topic Three

Whether the electrical business has "winter"

From the end of last year, where the customer was a huge deficit, group buying sites have fallen, electric business cold winter rhetoric. 2012 The electricity business is still spreading. Why did the rising electricity merchants from "big up" to "big fall"? Is it true that the capital is cold and no money can be burned? Which companies can survive in the shuffle?

Tang Xin: Personally feel that do not have the electricity business spring. It is the cold winter now because the capital market is not good, but other times the profits of the electricity quotient is high? In fact, the margin is not high, but the capital market is holding it away. For manufacturers with their own product systems, the electricity dealers can enlarge their market, but for the pure electricity trader (the Pure Channel electricity dealer), may always be in the crevice, the gross margin has been not high, for them has been the winter.

First of all, the platform of the status of the electric business will become more and more stable, the traditional type of vertical electric Chamber of Commerce faced with a big shuffle, leaving only two or three large electric dealers, have their own unique resources of the vertical electric Chamber of Commerce to survive, others will be integrated. In addition, some innovative models will appear, such as mobile electricity, and service-related electric dealers, have a flexible means of sale, can be based on different people to different prices, such as group purchase, rebate and other social power providers, these will stand out and have greater development.

Overall, the industry is optimistic, will certainly continue to develop, e-commerce to a certain extent to replace the traditional business is the general trend, but there are still some problems, so the speed of development may not think fast.

Shou send: Electric business in the cold winter, more from the point of view of the capital chain, now the whole capital situation is not too good for small and medium-sized electric business, from the size of the big power to compare, while other aspects such as profitability, their own bright spots may have been difficult to attract investors attention. Therefore, in the short term, how to attract new funds in the circumstances, can continue to bring orders is the problem faced by the small and medium-sized electric operators, for them, the current stage may be the cold winter.

But for big electric, money may not be the core of the problem, whether it is Gome, suning or Jingdong, the existing reserves of funds enough to do a year or two of such operations, so the winter is more to the two or three-line of the electric business.

The survival of the vertical electric trader may hate hard, platform electric business words vary from person to person, Jing Dong, the cat has its own development characteristics.

With the concentration of the industry increased, vertical type of electricity dealers will certainly be a lot of closures. Some financial strength, supply chain is perfect, able to integrate enough partners, with these capabilities of the electricity dealers can stay.

Pengliang: During this period, the operation of each electric dealer is not good, most of them are losing money. But not to enter the "winter" period, it can be said that the industry's ripening period, before the dawn of the Darkness.

Personally, there are two things that can survive in the future, one that has a certain market share and keeps on going, and the other is having a tough follow-up supply chain. Comprehensive comparison, I think the latter is more important, if it is doing vertical e-commerce is the best choice to do free brand. Generally, the electrical business has just begun to do vertical e-commerce, and gradually to the level of e-commerce development.

Zhou Ding: Individuals do not believe that the electrical business into the "cold winter" this argument, they are entering a shuffle period, from the industry's life cycle, it is in a high-speed growth period.

Electric business is entering an industry integration and shuffle process, this is the market to a certain degree of production, E-commerce industry is now facing the most important problem is transformation. In terms of future development, small and medium sized electric operators are likely to die in the price war, the market will produce the first three strong electricity quotient trend. Big Electric Business in an opera, small electric business cry. Does not rule out some has the unique pattern or other special small electric power merchant to survive, but overall, the big electricity merchant survival probability is comparatively high. In this product standardization society, the Electronic commerce development most important is the supply chain and the logistics.

Topic Four

How the entity and the line are both

At present, China's e-commerce penetration rate is only about 10%, the future there is a huge space for development. Based on this, more and more traditional manufacturers and channel operators began to engage in E-commerce, the way is divided into two types, one is stationed in the platform of electric dealers, one is to do their own online stores.

However, this type of online online shop, offline entities store businesses are often facing the "fish and bear cake can not have both" problem. This is also Su Ning and Gome's difficult problem. So, for this "two-line" enterprise, how can we avoid the line offline product conflict, the realization of two modes of successful grafting?

Tang Xin: Traditional manufacturers and channels to expand E-commerce, on the one hand, is to see the huge prospects of e-commerce, on the other hand is worried about the competition to become a big e-commerce and passive challenge.

Traditional brands to do E-commerce, has not yet seen a very successful case, the problem is that these enterprises inadvertently traditional channels of practice more or less copied to the network sales, and offline management mode is not suitable for online.

To circumvent the impact of online sales to the traditional channels, we must do two points, one is the unified price, the second is product differentiation.

Shou: for the electrical and physical stores, the channel is not the same, the face of the customer is not the same, and the service system between the two are not the same, service and audience are not the same, so there is no inevitable substitution.

The possibility of online price is also not big, to suning Gome, for example, for the Beijing-East Low-cost strategy, Suning gome if blindly reduce the real store sales price, squeeze profit space, the ultimate challenge is the affordability of suppliers, "and line online under the meaning of the price synchronization is not big", can not be clearly feedback to the online sales.

Pengliang: In the channel, upstream supply has no advantage, so they dare not participate in the price war. Personally think that the supplier also opened a shop is more to do publicity, because Taobao traffic is very large, follow up e-commerce on their own products is a good publicity. In essence, there is no such thing as a supplier with great action or action.

Zhou Ding: This "double line" of the traditional manufacturers, in fact, in the supply chain, warehouses and logistics supporting can be shared, once the transformation of success, the scale effect can reduce operating costs, can be done online shop and physical store to advance.

Physical stores to the sales center, Experience Center and consumer upgrades or interactive activities such as transformation, the market is still relatively large, but in terms of sales, E-commerce accounted for relatively large. and community stores (such as supermarkets) are too expensive and should be minimized in the future, unless the community store has a good transition, but I think it is more likely to be closed.