The battle for pricing power caused by an oven
Commentator Qiu Yanbo
This year's Double 11 has just been launched, and the smoke of gunfire is already filled with gunpowder.
On October 23, the baking appliance brand Haishi and Jingdong opened the curtain of mutual tearing. Jingdong asked Hai's oven to reduce the price, Hai's was unwilling, JD.com forcibly lowered the price, and Hai's sent a lawyer's letter to JD.com. The lawyer's letter wrote that because JD.com lowered the price without authorization, "it caused Hai's passive breach of contract in the cooperation contract with other customers, and the risk of huge compensation was imminent." But JD.com did not correct it, but forcibly added a 5% discount to this oven and restricted the background permissions of merchants.
On October 24, Haishi reported JD.com to the State Administration for Market Regulation in his real name, pointing out that JD.com was suspected of abusing its dominant market position and undermining the order of market competition. Jingdong sales personnel publicly shouted Li Jiaqi in the circle of friends to "choose one of the two". The staff member said that JD.com received a lawyer's letter from the brand merchant Haishi, and was complained by the brand that because the JD price of this oven was lower than the price of Li Jiaqi's live broadcast, it violated the "reserve price agreement" signed by the brand and Li Jiaqi, and demanded huge liquidated damages. Following "Which Li is expensive", Li Jiaqi was once again put on the cusp.
On the evening of the 24th, Hai's brand issued a statement saying that it had not signed any "reserve price agreement." Subsequently, Li Jiaqi's company ONE responded that it was purely a lying gun, and the "reserve price agreement" was false news.
Is Li Jiaqi really lying innocent? According to a contract details of Li Jiaqi's cooperation with brands exposed by Sina Technology, for cooperative brands, Li Jiaqi's side has specific restrictions on the value of the gift, the intensity of promotion, the guarantee period of the best price, and the final transaction price. In the event of default, the brand will face double compensation: one is to refund the consumer five times the difference, and the other is to compensate US ONE for the liquidated damages of RMB 2 million.
On October 24, in the "Crazy Little Yang Brother" live broadcast room, Big Yang Ge said that Li Jiaqi controlled prices and inventory, resulting in most of the big names in Xiao Yang's live broadcast room being removed.
Netizens also picked up the events of 2021, the mask sold by L'Oreal in his live broadcast room was cheaper than that sold by Li Jiaqi during his live broadcast, and was "banned" by Li Jiaqi, and L'Oreal officially came out to apologize. This incident also shows that Li Jiaqi's side and the brand side should have a "reserve price agreement".
This time, Hai's tears JD.com, JD.com pulls Li Jiaqi, it seems to be a melee, behind it is actually a problem of competing for the pricing market, and even the competition for the pricing power and income right of the future business model.
At present, low-price competition has almost become the norm on major platforms now, as if only this killer tool can win the final victory. E-commerce platforms are full of various promotions with price as a gimmick, and every shopping festival created by the platform even forces merchants to stand in line, either/or. The platform forces merchants to participate in various activities and offer discounted prices. People in the rivers and lakes, they can't help themselves, and businesses are often forced to bow their heads. If the merchant chooses the anchor to bring goods, the anchor relies on his bargaining power to occupy the head position, and forcibly signs a "reserve price agreement" with the brand, and in the mode of "low price + commission + pit fee", most of the profits are captured by the head anchor. The top anchors, relying on their dominant market position, easily siphon most of the wealth in society, while the profits earned by real enterprises are only a fraction of the anchors, and even lose money and make money.
For brands, if there is no right to speak in front of the platform and anchors, or there is no pricing power, let them adjust prices, the company will lose the initiative, in the short term, may bring an increase in sales, but in the long run, because most of the profits are taken away by the platform and anchors, it is difficult for brands to leap up, and the development stamina is insufficient. If the real economy ends up being a wedding dress for the platform, who is willing to engage in the real economy?
The pricing of a brand should be the result of a common game of many parties and should not be monopolized by any party. A "floor price agreement" at any time is not necessarily the real lowest price, it just doesn't allow others to be lower than me. For example, a manufacturer can have a profit of 1 yuan if it sells 10 yuan with a pen, but after the platform or anchor forcibly signs a "reserve price agreement", it may sell 15 yuan, and the platform or merchant takes away 4 yuan, and does not allow other places to sell it for less than 15 yuan. In this case, consumers do not really get the benefit of the price reduction, but spend a higher price. At this time, the "floor price agreement" is not the lowest price, but a monopoly.
This time's "baking test", for JD.com, the key is to look at the agreement previously signed between JD.com and Hai. If JD.com violates the agreement and forces a price reduction, it should be resolved as a contract dispute. For Li Jiaqi's side, if there is a "reserve price agreement" really signed, it may face the risk of anti-monopoly litigation.
Li Jiaqi's company, Mei ONE, received angel investment from Alibaba Capital Lakeside Shannan as early as 2016. On the surface, this time is a competition for pricing power between JD.com and Hai's, and in essence, it is likely to be a competition between platforms. No matter which platform wins, the brand's voice still needs to be improved. Any brand, if the pricing power is not in its own hands, will ultimately damage the interests of the brand. If brands die as a result, consumers are unlikely to benefit more.
Only by returning pricing power to brands and consumers can enterprises and consumers win-win.