Dangdang.com Calls for (Metaphorical) Beheadings in New 360Buy Price War

“Operation Beheading” is more the kind of phrase you’d expect from cave-dwelling terrorists or vengeful Mexican narco-bosses – but it’s actually the name of the new Chinese e-commerce price-cutting war that Dangdang.com has launched against 360Buy.com.

Over the weekend, Dangdang (NYSE:DANG) decided that a 3C – computers, communications, consumer – price war would be the best way to decapitate its upstart rival.

Chinese media reports that this is aimed particularly at notebook computers, digital cameras, and mobile phones. Chatting with netizens on Weibo, Dangdang’s joint chief exec, Francis Chan, boasted of a 500 percent boost in 3C sales on his site in the past few months. He also revealed that this war is tactical, and is aimed at forcing 360Buy out of the book-selling game. Francis suggested this is a temporary ploy, and that peace could be attained if its rival were to quit selling books.

360Buy – sometimes translated as Jingdong Mall – started out in the 3C B2C e-commerce, and then diversified into books as well. Clearly this angered its more established competitor. Back in August, Dangdang’s CEO, Li Guo-qing, claimed in a TV interview that “360Buy is losing huge amounts of money on its sale of 3C,” and stated that 360Buy wasn’t impacting his own company’s sales of books.

Dangdang's (NYSE:DANG) share price in blue, compared to the Dow Jones in red; at the close of trading before the weekend.

Just a few weeks ago we heard that 360Buy is prepping a US IPO, although its CEO has publicly denied that’s the case. If it occurs in 2012 – and goes well – it looks set to be the world’s biggest-ever web IPO.

Dangdang’s shares have crashed 80 percent in the past six months (see the graph above), after hitting a peak in April of this year. It’s now trading at just $5.52, down from the sensational $32.79 from the day after it hit the NYSE tickers.

[Source: TechWeb – article in Chinese; Original image source: marchofdimes.com]