China’s online shoppers are waking up to find the country’s leading online retailers are caught in one of the fiercest price wars ever. It’s gotten to a point where one company is even announcing it’s willing to sell its products with zero profit for the next three years.
It’s time for lunch break, but no one in the office is moving. Apparently, there is something more important than lunch today.
An online shopper, said, "We’ve all heard about the online price war between Jingdong and Suning.The competition between them makes it a good time for us to buy the products we’ve been longing for. I’m looking for an electric kettle and an air-conditioner."
Leading online shops, Jingdong and Suning, are engaging in one of the fiercest price wars in China’s consumer history. Their main battleground: household appliances.
The Head of Jingdong said on his microblog it will sell its household appliances without making a profit for the next three years. Its rival’s reply is simple and direct: "take down" Jingdong with prices the market has never seen.
In the most extreme case, a new iphone is on sale at half its original price. A laptop, at 70 percent discount. As sales are growing online on the street, deliverymen are working around the clock to get the products to the buyers.
Zhang Shouzhen, a deliveryman said, "Today I must work from 9:00 am to 8:30 pm. It’s a crazy busy day."
Even as we are talking, his cellphone rings with more orders. For consumers, they can’t get enough.
As you can see, everyone is busy shopping for their best bargains online. But now the question is, who is paying the bill behind such a massive battle for consumers?
Liu Qiao,finance expert from Peking University said, “Sustaining such a price war means a staggering amount of spending. Part of it is from the companies’ own budget, but money from investors are also involved who do not actually make active decisions and may not want the money to be spent this way. However, online business is an emerging industry for China, and in the early stages, companies have to fight price wars because they need to expand their market share for future development.”
But is price the only way to attract consumers?
An online shopper, said, "Last time I bought a kettle online, but it was broken even before it arrived. I called the hotline several times, but they ignored my request to change it. And finally I gave up."
As the price war escalates, perhaps a smarter tactic is to focus on the quality of products and services, as quality is always what the market is looking for.