Less than two months away from the 2024 June 18 Shopping Festival, the price war of e-commerce giants has started in advance.
On April 17, a piece of news blew up the e-commerce industry: Jingxi, a special shopping brand under JD.com, released a Weibo and officially announced the launch of a "price competition" activity.
Low prices have become the most important weapon of e-commerce, and consumers are the ultimate beneficiaries
Some industry insiders interpret that the "competitive price" of Jingxi's direct sales is aimed at another e-commerce company in the industry that is known for its low prices. In this price war, Jingxi directly invested in all categories and all commodities, and its strength is rare in the industry.
Jingxi's move can be seen as JD.com's response to the low-price strategy of other e-commerce giants.
Combing the data can find that before, the major e-commerce companies had frequent "low price" actions. Soon after the start of 2024, Douyin e-commerce released its annual strategy: setting "price power" as a priority task in 2024.
And 5 days later, Taote, which relies on the 1688 factory to focus on low prices, was revealed to be merged into Taobao. Taote used to be the main force of Ali's attack on Pinduoduo, and now it will become a new force of Taotian Group in the "low-price era" of e-commerce.
Earlier, in 2023, Kuaishou launched a big-name supplement venue to subsidize big brands, while Pinduoduo resisted doubts about the quality of its products and continued to adhere to the normalization of low prices.
"E-commerce is crazy about low prices, and consumers are definitely the ultimate beneficiaries. Some industry experts said so.
Price reductions will gain customers Price wars may become more frequent
Why has price war become an important means of market competition for e-commerce giants?
Price war generally refers to a kind of commercial competition between enterprises by competing to reduce the market price of goods. Philip Kotler, the "father of modern marketing" and an American scholar, once said: "There is no brand loyalty that cannot be offset by a price cut of two cents." ”
This quote sharply describes the significant impact of the "price reduction" initiative on consumer decision-making.
The famous economist Mankiw also said in the book "Principles of Economics" that the price war, a means of market competition, has the characteristics of strong lethality, short and fast, so it is favored by the majority of manufacturers, and it is even more common in some specific industries.
Looking back at the history of global business, we can find that there is no shortage of exciting, fierce and up-and-down price wars in history.
Take Pepsi and Coca-Cola, the happy enemies, in the 30s of the last century, due to the Great Depression in the United States, Pepsi in order to seek a breakthrough, took advantage of the economic downturn background, and played the advertising slogan "the same price, double the enjoyment".
PepsiCo launched its first offensive price war. At that time, you could only buy a 6.5-ounce bottle of Coca-Cola for five cents in the market, but you could buy 12 ounces of Pepsi.
It was this simple price war that successfully made Pepsi stand on its feet. You know, PepsiCo started with less than one-tenth of Coca-Cola's market share and has been on the verge of bankruptcy for many years.
Since then, Coca-Cola has also lowered the price of its products and fought back. In the following decades, Coca-Cola and Pepsi fought many price wars, which not only did not make them lose both, but made their market share both expand.
Having said that, Chinese consumers are more sensitive to the price of goods.
Zhang Zhong, a former Wharton professor, has publicly stated: "Chinese customers are very price sensitive. By lowering the price, you can get more revenue from your sales. In China, whenever you lower your price, you will win a large number of customers. ”
From this, we can know why the "price war" has become an important competitive weapon for e-commerce giants under the coercion of rational consumption.
It is expected that in the future, such price wars between e-commerce giants will appear more and more frequently.