How Long Can E-Commerce Price War Last?

"Bargain is the cheapest, buy expensive and return the difference", "see you every day, win the prize".

In the near future, Taobao, Jingdong and many other e-commerce giants have started the price war to seize market share.

However, without scale effect and innovative products, can "spell price" win the final?

Capital "group" enclosure online shopping market

The near future,

The tide of price cutting has been upgraded again, such as "you buy me down, good books are half price", "the cheapest bargain", "winning prizes plus prizes", the price tag is flooding the Internet.

One of the important reasons is that e-commerce has become the most popular field of attracting capital attention. A large number of funds have been injected into the electronic business platform to seize market share.

In May 8th, Suning's online shopping platform suning.com announced that it plans to invest 2 billion yuan in special sales and 400 million yuan in the promotion.

On the same day, Jingdong mall said it would give up 500 million yuan to make profits for household appliances.

Earlier, Taobao Tmall, the first B2C trading volume in China, said it would support businesses to start price wars in the form of subsidies, with a subsidy of 200 million yuan.

In addition, Amazon and Dangdang also put forward "timely promotion". The electricity supplier claimed that it had invested more than 3 billion yuan in promotion and profit making.

Mature electricity suppliers to seize market share set off price war, while emerging business is constantly pouring into.

In May 7th, Metro China online mall was formally launched.

The European retail wholesaler in second and third in the world announced in Shanghai that it will double the number of stores in 3~4 and make new customers account for 70% of the total online shopping platform.

Prior to this, WAL-MART, which has invested in the "1 shop" of the domestic online shopping site, has raised its shareholding ratio to about 51%.

Plus Carrefour China official website quietly test the "online shopping mall", the world's top three retail and wholesale supermarket groups are "electric shock" in China.

According to incomplete statistics, more than 20 listed companies in Wangfujing and Nanjing have been involved in all kinds of official "Internet stores".

"In recent years, the rapid development of domestic electricity providers, enterprises pay more and more attention to this channel."

Lu Renbo, Deputy Secretary General of China electronics chamber of Commerce, said that the domestic e-commerce market is entering a situation of multiple competition and multi feet.

China Internet Network Information Center data show that as of the end of 2011, China's online shopping users reached 194 million, with an annual growth rate of 20.8%.

Despite the demand for support, can the "highly motivated" business get the best of their profits?

According to the China Electronic Commerce Research Center, the scale of China's online shopping market has reached 233 billion 600 million yuan in the first quarter of this year, a sharp increase of 42.8% over the same period last year.

Experts believe that, on the one hand, the traditional shopping mall is facing the pressure of increasing rent, single channel and user habits change. On the other hand, the online shopping market has a huge volume of sales, and it includes more than 200 million customers under the age of 35.

"Test the water" electricity supplier does not lack the power.

However, behind the astronomical figures of market growth and so on, it is not easy for e-commerce providers to get involved in e-commerce.

Internet expert, Wei Wuhui, School of media and design, Shanghai Jiao Tong University believes that as consumers' enthusiasm for online shopping continues to increase, capital access to electricity providers is normal, but it should be noted that online shop investment may not be less than physical stores.

For example, the logistics cost and the cost of oil actually bear the cost of consumers going to traditional stores.

At the same time, the dissemination of promotional information also requires a lot of input.

Some smaller businesses may not be able to adapt to "price fixing".

The pursuit of "the lowest price of the whole network" has brought huge investment pressure to the electricity supplier.

In 2011, the Jingdong "leader" increased the delivery cost, and indicated that the new total of $1 billion 500 million would still need to be financed this year.

In 2011, Gome net profit fell 6.2% compared with the same period last year. The responsible person explained that the ERP system and e-commerce investment were relatively large.

"The development trend of e-commerce is irresistible, but excessive price war not only affects the business platform itself, but will eventually hurt manufacturing enterprises."

Lu Renbo pointed out that domestic electricity providers have always regarded the price as a competitive advantage, but the more cost is the manufacturing industry.

The upsurge of e-commerce has already sprung up, and the development of the industry will go through a new round of survival of the fittest. "Price fixing" can only bring short-term benefits, so that large-scale operation and differentiated competition can win the final stage.

"At present, the electricity supplier investment has concentrated on the larger website."

Wei Wuhui believes that a company with a certain scale has the right to optimize and utilize existing resources and develop the operation mode of online ordering and store delivery.

For example, according to the average distribution radius of the 200 km industry, some supermarket groups and chain stores can make use of the existing distribution and customer system.

Hu Xingmin, head of Metro China, revealed that more than 60% of the traditional shopping malls had online shopping experience, which provided conditions for its entry into e-commerce.

Lu Renbo believes that if the e-business website reaches a certain scale, its cost will be lower than the traditional sales channels, but the domestic e-commerce is not mature in the logistics, distribution and after-sales service links. To make full use of the advantages of e-commerce, we need to fill these short boards.

Experts believe that the development of e-commerce depends on the innovation of products or services in the final analysis.

China's e-commerce product chain is still single, enterprises need to guard against homogenization competition, only by strengthening product or service innovation can we retain customers.

In addition, the e-commerce industry needs to strengthen standards and reduce online shopping.

Quantity.

In 2011, China's e-commerce complaints and rights protection public service platform received nearly 100 thousand complaints from e-commerce, among which privacy leakage and quality disputes reflected problems such as lack of technology and inadequate management.

This calls alarm for "novice" and "old gamers". Strengthening management and preventing technological loopholes is very important.