Bloody Price War: June Will Become A Fierce Battle For Business Operators

The battle is coming, but the battle is hard to win.

The first rule of survival that cannot be avoided.

In May 2011, Tencent reorganized, and Ma Huateng announced to invest $1 billion in the independent operation of Tencent electric power holding company.

Just before Tencent jumped into the electricity market again, the electricity business circle has ushered in the most tragic price war in history.

In June 1, 2012, suning.com launched an unprecedented balance to replace the "net price parity month" and 70 percent off daily robbing. Following that, Jingdong mall started the activities of "Jingdong Normandy, the strongest month in the history of the month, giving 1 billion yuan" activities, and Tmall, who refused to stop fighting, announced a 100 million yuan subsidy to consumers directly on the basis of a 200 million yuan subsidy in the early stage to subsidize the sale of businesses.

In addition to the price war, the cross-border war between e-commerce and logistics has been unavoidable.

Shun Feng's e-commerce website is launched, and the positive rush of the big courier and the big brother of electric business is unveiled.

At the same time, Jingdong and van's logistics distribution company only wait for a courier license.

stay

Bleeding in the logistics war is a true portrayal of the ecological environment of the electricity supplier circle today.

Bleeding logic: price wars are not immune.

There is no doubt that in June, the worst price war in the history of electricity supplier will be achieved.

From May, Tmall electric mall threw 200 million yuan to subsidize businesses, and then went from Suning to Jingdong.

The price war is escalating.

Jingdong launched the big "Hui" war in Normandy in June, and the price reduction products also extended from the original home appliance digital products to the whole category.

In response to the Jingdong's claim of zero profit sales, Dangdang announced that it would promote the promotion of books, clothing, home appliances and digital products.

This round of price wars that erupted from May to June, the most obvious intention is considered to be blocking Jingdong's upcoming IPO.

According to the monitoring data of China Electronic Commerce Research Center, in March 2012, China's B2C market ranked first as Taobao Mall (Tmall), accounting for 51.3%; Jingdong mall ranked second, occupying 21.9%; the third place was Amazon China, reaching 3.4%; the other ranking Tencent B2C was the most advanced.

Tmall, No. 1, is obviously reluctant.

Early listing.

Once the listing of Jingdong has eased the problem of tight capital chain, it will be necessary to fight for new market share.

"The idea that all competitors are dragging him away is inevitable," Chen Sheng, an international analyst at Analysys, said.

"Tmall hopes to use the price war to strengthen the market share of 3C on household appliances. Suning's strategy is to allow consumption to reach a new level, and Dangdang and other closely followed it will be somewhat passive."

Li Bin, executive vice president of suning.com, accepted the "China business newspaper" reporter's interview to confirm this conjecture. "Suning.com's sales target this year is 30 billion yuan". In Li Bin's view, price war is not the development strategy, but it is still the most effective way to occupy the market.

According to its disclosure, Suning has been preparing for a long-term price war this year. Since the first round of "bottom price day" began in April of this year, the "E18" low price storm of May and the "monthly price comparison month" in June have shown that suning.com will "price war" as a conventional weapon, and the "E18" activity on the 18 day of each month is also the embodiment of suning.com's regular price war.

In addition, the real purpose of price war is to keep the market share. Mo Daiqing, director of the online retail department of the China Electronic Commerce Research Center, pointed out: "from the perspective of market share, Tmall is still ranked first, second is Jingdong, and others are Amazon, China and suning.com.

It is clear that their purpose is to maintain their status. "

The unavoidable problem behind the price war remains bloodshed.

Jingdong mall's 2011 earnings report showed that revenue in 2011 was 21 billion 200 million yuan (including 26 billion 900 million yuan in the platform), but the gross profit margin was only 5.5%.

Amazon's gross margin has been around 20% for a long time.

"Although the turnover of Jingdong has reached a record high, the low gross margin will still bring losses, and the financial situation is not very optimistic."

Mo Daiqing thinks.

In addition, in 2011, Gome's electricity supplier entity and its online shopping mall lost nearly 400 million yuan, while Dangdang lost 284 million yuan last year.

Cross border war: two way penetration of logistics

Behind the bloody price war, the new generation of electric power giants in the logistics sector is also the focus of the next round of cross-border competition.

"The third party express company can no longer meet the needs of e-commerce enterprises.

The electricity supplier urgently needs its own express team, on the one hand, it can improve user experience, on the other hand, it can accelerate the cycle of capital reflux.

The electricity supplier itself makes the express, can control the whole process from delivery to the user.

Mo Dai Qing analysis.

But self built logistics to the electricity supplier is obviously a double pressure beyond the price war.

Jingdong's self built logistics plan is considered to be an important reason for the further expansion of its funding gap. Jingdong actively promotes the "Asian first" warehouse plan.

According to public data, each "Asian first" warehouse has invested about 800 million yuan each, according to its plan, 10 will be built, two years later, 3 billion 600 million yuan will be needed this year.

In order to alleviate the pressure on logistics, suning.com's advantage is relying on sunning's big tree.

According to Li Bin, "the logistics system of easy purchase is now shared with Suning Appliance. As of May 2012, Suning has 8 logistics bases in operation, 12 are under construction, 40 have completed contract reserves, and 60 logistics bases have been built and reserved."