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Chinese appliance retailers in price war

08-16-2012 06:21 BJT

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A price war between two of China’s biggest consumer retailers is intensifying after Suning Appliance and e-commerce website 360buy.com began offering massive discounts online. Meanwhile, other competitors like Gome Electrical Appliance and Dangdang.com have also entered the ring.

It all started with a micro blog note. The blog posted on Tuesday by Liu Qiangdong, the CEO of online retailer 360buy.com, said that his company will get a zero percent gross margin from large home appliance sales in the next three years. He also promised to sell large home appliances at a price about 10 percent lower than its major rivals Gome or Suning.

Liu Qiangdong's Micro Blog wrote, "360buy.com will get a zero percent gross margin from large home appliance sales in the following 3 years.

I assure you that the prices of large home appliances sold on 360buy.com will be at least 10% lower than those in the Gome and Suning stores."

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.

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A price war between two of China’s biggest consumer retailers is intensifying after Suning Appliance and e-commerce website 360buy.com began offering massive discounts online.

In a following micro blog, Liu Qiangdong warned that any employee found selling a product with a price markup will be fired, and said his company will send staff to monitor prices at Gome and Suning to make sure the measures are implemented.

But, he insisted that 360buy was not triggering a price war, but was forced into an already existing unreasonable price competition. On top of this, he has expressed confidence about the company’s capital strength.

Liu Qiangdong, CEO of 360Buy.com, said, "We have to follow the competition. We must be more active. It is our long-time strategy to offer the lowest price to consumers. We have enough cash in our account now, so we don’t need to raise more funds."

A price war between two of China’s biggest consumer retailers is intensifying after Suning Appliance and e-commerce website 360buy.com began offering massive discounts online.

Around five hours later after Liu Qiangdong’s blog post, Suning Appliance launched its response. Its executive vice president Li Bin said on his micro blog that the prices of all Suning’s online platform will be lower than those of 360buy. And that it will compensate consumers who bought products at a price higher than 360buy.

Li Bin's Micro Blog wrote, "The prices of all products on Suning’s online platform will be lower than those of 360buy. As of 9:00 a.m. on August 15, Suning’s online platform will launch the biggest discount ever. "

Later on, Liu Qiangdong responded that starting from 9:00 a.m. on August 15, 360buy’s prices for large home appliances will be lower than Suning’s, both online and offline.

"As of 9:00 a.m. on August 15, 360buy’s prices for large home appliances will be lower than Suning’s, both online and offline. If Suning dares to sell a product at 1 yuan, 360buy will sell it at 0 yuan." Liu's blog wrote.

In the meantime, another major online retailer, Dangdang.com, has joined the competition. Its CEO Li Guoqing said on his micro blog that Dangdang is ready to face the challenge, and welcomes consumers to shop around. Since around April, Chinese E-commerce players have been engaging in such price wars, which have heated up due to increasingly fierce competition.

A price war between two of China’s biggest consumer retailers is intensifying after Suning Appliance and e-commerce website 360buy.com began offering massive discounts online.

Editor:Zheng Limin |Source: CCTV.com

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