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Jingdong CEO ignites price war talks

08-15-2012 13:15 BJT

A micro blog note by the CEO of Beijing Jingdong Century Trading Co, which runs online retail website, has caused controversy among rival companies. 

Liu Qiangdong, CEO of Beijing Jingdong Century Trading Co [File Photo:]

Poll: E-commerce fight     (Total Votes:Loading)
1.Do you usually buy home appliances on internet?
A. Yes
B. No
C. It depends.
2.What do you think of Suning and 360-Buy’s competition on e-commerce?
A. It is a good news to consumers.
B. I do not think it will keep up.
C. The prices of products on the two website are still not satisfied to me.
D. I do not care about their price competition.
3.Will the price competition between Suning and 360-Buy change your shopping plan?
A. Yes
B. No
C. Not much.


"Jingdong will get a zero percent gross margin from large home appliance sales in the following three years," wrote Jingdong's CEO Richard Liu on his micro blog. "I assure you that the prices of large home appliances sold on Jingdong will be at least 10 percent lower than those in the Gome and Suning stores." 

Gome and Suning are China's two biggest electronics retailers, while is China's second-largest business-to-customer website. 

E-commerce players are engaging in price wars since April amid increasingly fiercer competition. 

Li Guoqing, CEO of online retailer E-commerce China Dangdang Inc, dismissed Liu's words as hype. Li said that products sold online are already much cheaper than those sold in brick-and-mortar shops. 

Meanwhile, online shopping website, which is largely owned by Tencent Holdings Ltd, will initiate large-scale promotions in September, selling even cheaper home appliances and electronics than Jingdong, the company said after Liu's statement. 

Jingdong's Liu wrote in a later micro blog note that the company will provide cheaper large home appliances than Suning's online website and also than brick-and-mortar stores. 

Analysts said earlier that price wars will continue to be a strategy of e-commerce players in the second half of the year.

Editor:Zhang Jingya |Source: China Daily

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