Price war!
Following in the wake of Suning’s shot across the bow of online B2C retailers, Alibaba’s Tmall is launching an offensive that looks to challenge relative newcomer 360Buy. Tmall will offer major savings in consumer electronics by subsidizing 200 million RMB ($31 million) in sales.
Tmall’s Tan Biao expects the move to succeed — you’re shocked, I’m sure — and told Sina Tech that he expected Tmall’s volume of business to nearly double from Q1 to Q2 of this year. He also spoke of the move as a strike against traditional retailers, saying that the advantage of e-commerce is that consumers can connect more directly with manufacturers and save on the costs of all the middlemen involved in brick-and-mortar retail electronics. However, given that Tmall is subsidizing its new low prices, it doesn’t seem like this move is the result of any sort of streamlining of distribution services so much as an attempt to build loyalty with customers by undercutting competitors.
In the short term, this sort of price war is great for consumers, as various e-tailers lower their prices in an attempt to attract more business. In the long term, though, if a clear winner emerges, there’s a fairly good chance prices will rise again and the only impact on consumers will be that they now have fewer choices when it comes to buying something online. For now, though, get out there and enjoy those low, Tmall-subsidized prices!
[via Sina Tech, Image source]
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