It seems that it’s not just in Europe that times are tough as now Chinese retail giants decide to gear up for a price war in the face of slower domestic sales on mainland China by slashing the prices of applainces and other goods.
The Chinese retail giants on have started offering massive tit-for-tat discounts believed to be in an effort to kick start falling domestic sales.
Liu Qiangdong, chairman and founder of 360buy.com which China’s second-largest online retailer by sales, announced that his company will sell all major electric home appliances at lower prices than those of rivals Gome and Suning.
“Our home appliances will be priced ten percent lower than those of Gome and Sunning,” Liu said.
Li Bin, vice executive of Suning.com, replied to Liu’s announcement by stating that all items sold by Suning, including home appliances, are already cheaper than those on 360buy.com.
Other online retailers, including Dangdang.com and smartphone manufacturer Xiaomi have announced their own deals and preferential policies to attract a bigger portion of the country’s massive online shopping audience.
Large discounts are one of the few methods online retailers have at their disposal to attract more consumers, as the market is highly competitive. Liu said only large portions of market share can help companies offset supply costs.
Although why a company like 360buy.com that has just suffered a loss of 1.3 billion yuan in 2011 would want to slash prices is beyond us. We always though that, when you were in a hole, you stopped digging.