Damages from Over Promotion by E-retailers

Recently, a sale’s promotion campaign (note: the link is in Chinese) is launched by China e-commerce merchants on Weibo, a twitter like website. On 14th August, Mr. Liu Qiangdong, CEO of 360buy.com made a statement on Weibo that all the major home appliances sold on his website will maintain ZERO gross profit in the coming 3 years, and will also be 10%  cheaper than those sold by Sunning and Gome, who are also the major E-retailers in China. Facing the challenge, Sunning (SZSE: 002024) and Gome (SEHK: 493) replied that all their commodities will be cheaper than 360buy.com. After that, both sides announced they will adjust the prices in time to ensure its own prices are lower than the opponent. The quarrel on Weibo triggered a promotion battle between the e-retailers, and after the 1st day of fighting, 360buy.com said the total sales of the day had been over RMB 200 million.

READ MORE