Huang Guangyu recalled: Marching into the battlefield of Shenyang, encountered the most extreme commercial confrontation

After successfully entering the Tianjin market, Gome then entered the Great Southwest and quickly gained a foothold through a series of "battles". However, Huang Guangyu did not stop the pace of Gome's continuous expansion, and this time, he set his sights on Shenyang, a major place in the northeast, and was determined to take root in this fertile land.

What Huang Guangyu and Guomei did not expect was that they encountered the strongest resistance from their opponents in Shenyang, and the complexity and thrill of the situation was the biggest legend in the history of China's home appliance chain.

On August 11, 2001, Shenyang Gome's first store, Hui Industrial and Commercial City, opened. This is Gome's 38th directly operated chain store in the country.

On the opening day, many of Gome's home appliances were sold at very low prices, and some goods were advertised for "zero profit" sales. In the face of Gome's aggressive offensive, Shenyang's local large shopping malls naturally will not sit idly by, and several large shopping malls dominated by ZTE Commercial Building, Shenyang Associated Venture Company, Shenyang Commercial City, and Shenyang Tiexi Department Store have joined hands to play an advertisement that "home appliances will be sold at a low price unprecedented in 5 years" in the name of "celebrating the fifth anniversary of the establishment of the Home Appliance Price Association".

Shenyang Gome electrical appliances on the opening day, has not yet opened the door to open for business, the door lined up nearly a thousand people, just opened soon, from the first floor to the second floor is crowded with paying consumers, the entire Shenyang Gome can hardly find a slightly larger open space, xu most consumers are more than one home appliance products. For example, a couple bought four major products such as refrigerators, color TVs, water heaters, and range hoods, spending 5500 yuan, while the original price was nearly 8000 yuan, of which the purchase price of the 29-inch flat-screen color TV was 1790 yuan, nearly 700 yuan lower than the original price. At the same time, in the local large shopping malls in Shenyang, business is also very hot, and the home appliance market is greatly stimulated by low prices. This rapidly white-hot price war between the two sides has greatly benefited the majority of consumers, as one consumer said, the price war between merchants is "clams competing", and consumers are the "fishermen" who benefit and enjoy the benefits.

Shenyang Gome's results on the opening day were very beautiful, despite the tit-for-tat activities of the local large shopping malls, its sales on the day reached a staggering 4.2 million yuan, and the next day it also exceeded 3 million yuan. However, the "joint sniping" of Shenyang's local large shopping malls has not stopped here.

According to Wang Mou, who was the general manager of Shenyang Gome Electrical Appliances at the time, the Shenyang home appliance market was basically monopolized by the local large shopping malls before Gome entered, and the mark-up rate of home appliances was as high as 20%, and there was a "home appliance price association" organization between these large shopping malls, so that it could jointly price and maintain ten high profits. Therefore, no matter how the price of home appliances in other places is reduced, the price of the Shenyang home appliance market remains high. After Gome entered Shenyang, it broke the price balance of its home appliance market, and a price war came into being.

On the third day that Gome's advertisement appeared in Shenyang media, the "Price Association" announced that "the purchase price will be sold at another 10% discount". At the same time, the "Price Association" has also taken a series of measures, such as requiring home appliance manufacturers to cut off goods from Gome and withdraw promoters from Gome on the grounds of seizing payment. Some local home appliance manufacturers were forced to withdraw their promoters from Gome under pressure, and well-known brand manufacturers such as Changhong, TCL, and Konka issued a notice of out-of-stock to Gome.

On August 20, 2001, the Shenyang Commercial Price Cooperation Association, which is composed of four major shopping malls, issued an emergency notice to major electrical appliance manufacturers in Shenyang, saying, "Due to the active cooperation of your company, gome has effectively cut off the purchase channels of Gome in Shenyang, but recently it was found that Gome Shenyang Mall uses inferior means to purchase goods from individual dealers or other wholesale channels, and try to cope with the embarrassing situation of serious shortage of advertising and supply." According to this, the special emergency notice is given to your company to strictly control the wholesale channels, monitor the flow of commodity terminals, resolutely prohibit the flow of goods into the Shenyang shopping mall of Gome, purify the market environment in Shenyang as soon as possible, restore the original market structure, and return the home appliance market in Shenyang to the orderly competition of the past. ”

The unreasonable and powerful behavior of the price association made the local home appliance manufacturers in Shenyang dare to be angry. A boss of a home appliance company said that now we are in contact with Gome, just like thieves, we can only sneak around, for fear of being discovered by the price association. The price association called us to a meeting in two or three days, demanding that we should not communicate with Gome, otherwise we will seize our payment, and almost every one of our home appliance companies has the payment in their hands, and there are millions of yuan more. The four major shopping malls said that to communicate with Gome, they either held the arrears and did not pay back, or deducted 20% of the payment. It's so domineering! "The tone of each meeting of the four major shopping malls is very tough, they sell at a 90% discount on the purchase price, but let the manufacturers suffer losses." Which can afford such a back manufacturer? Manufacturers really dare not speak out."

The Country United States, which has been crawling and fighting in the blockade, has long been strange about the blockade, but it is still somewhat unexpected about this "defense war" that appeared in the name of the price association and killed so fiercely. Chen Xiaomeng, manager of the planning department of Gome Electric Appliance Corporation, said that in the past, Gome has also encountered many incidents in Tianjin and Chengdu where merchants have joined hands to force suppliers to block Gome, but this is the first time that they have been threatened by seizing payments. "In the past, suppliers were forced to block Gome under pressure, which was often superficial and made a show for merchants, but this time the suppliers were helpless."

Gome's boycott in Shenyang didn't stop there. Wu Alun, a well-known financial writer, recorded in depth the brutal sniping suffered by Gome in Shenyang in his masterpiece "10.5 Billion Legends": "The local media received an internal document stipulating that there should be no positive news publicity reports on Gome. Gome can spend money on advertising, but for a newspaper to report on Gome, it must report on a problem. Gome's more worrying about opening in a foreign country is the negative media coverage, such as the price is not the lowest, because there will always be people who desperately try to make lower prices; for example, some people complain that Gome did not deliver to the door within the promised 48-hour delivery period..."

So, why did the four major shopping malls react so fiercely to Gome's entry? According to industry analysts, Gome's strong containment in Shenyang has a considerable relationship with the competitive environment atmosphere in Shenyang. A supplier who has repeatedly asked not to be named said that Shenyang is the center of heavy industry and a major commercial town, but its commercial awareness and atmosphere need to be improved compared with some cities with high openness. Its commercial reform is quite lagging behind, and home appliance retail has always been dominated by the four major shopping malls. Without Gome, the profits of the four major shopping malls and home appliance industries were generally around 15%. Now that Gome has come, such a high profit is obviously impossible to keep, so the four major shopping malls are bound to make a deadly counterattack against Gome.

Behind this price war, there is a hidden dispute over the format of the home appliance market. Who has the advantage of large shopping malls and home appliance chain malls in the sales of home appliances? After Joining the WTO, how to resist the inflow of foreign home appliance franchise commercial capital? It can be said that the price competition between the big shopping mall and Gome is a direct collision between this different business ideas.

In the process of developing other markets, Gome has also clashed with local commercial enterprises, but they have all competed reasonably within the scope permitted by national regulations, and this fair and open competition is not only conducive to the maturity of the market, but also conducive to the development of enterprises. The final result of competition is to stimulate the local market, intensify the competition between the same industry in terms of services and prices, and make the "cake" of the entire market bigger. But what happened in Shenyang made Huang Guangyu and Gome helpless for a while.

Under the joint sniper attack of the four major shopping malls, the situation of Gome in Shenyang has gradually become difficult to maintain, and it has entered a dangerous situation of being completely encircled. Just when Huang Guangyu was sitting on a needle in Beijing and the person in charge of Gome Shenyang was anxious, things took a turn for the better. Shenyang Gome unexpectedly intercepted a fax that the "price association" asked the manufacturer to stop supplying Shenyang Gome, otherwise it would be sanctioned. In hindsight, this fax should have been intentionally or unintentionally leaked to Gome by some manufacturers who did not want to offend Gome' big customer and could not afford to be guilty of the "price association", with the intention of showing their helplessness. This fax became a fuse for the United States to launch a counteroffensive. Gome stabbed the fax incident directly into the major media in Beijing. With the hot speculation of the Beijing media, the national media also immediately "exploded", and this incident even alarmed the State Planning Commission. The State Planning Commission has made it clear that if the behavior of the four major shopping malls in Shenyang is true, it will indeed violate the "Price Law" and the "Anti-Monopoly Law", which is a typical "behavior of unfair competition". Gome has the opportunity to turn defeat into victory and "escape from death".

The propaganda offensive on the periphery and the explicit stance of the State Planning Commission have put great pressure on the four major shopping malls and "price associations" in Shenyang. This is another price alliance since the "Color TV Summit". Under pressure, the relevant local departments in Shenyang immediately expressed their position: they can no longer do this, they cannot unify the price, and there must be a price difference. The battle in Shenyang, in the end, was successful in using an unconventional means to comprehensively integrate the resources of all parties and seize a counterattack point to do it under the condition that the "low-price" strategy could no longer shake the siege.

In the end, Gome finally broke through the sniper attack of local merchants again. After the siege of Shenyang was lifted, Gome's development trend in Shenyang went all the way up. A year later, Gome Has opened 4 stores in Shenyang, and its market share has accounted for nearly 1/3 of the local market. The fierce market competition has lowered the average price of home appliances at the same time, and the cake of the Shenyang home appliance market has also become bigger.