Online Price Wars: Smoke and Mirrors? 电商价格战：烟雾弹还是真刀实枪
The recent round of online price wars took an interesting turn over the weekend, with data that looks suspiciously like it was provided by e-commerce leader Alibaba showing that a big part of the so-called wars may have been mostly talk and potentially just a publicity stunt by Jingdong Mall’s talkative CEO Liu Qiangdong. (English article) Following that latest development in this colorful story, we’re now seeing reports that Jingdong Mall, which also goes by the name of 360Buy, has blocked all of its prices from searches by Alibaba’s Etao online pricing search engine, which was the source of the original reports that raised the publicity stunt allegations. (Chinese article)
I’ll admit that I’m being a bit cynical, but my interpretation of these latest 2 developments is that Alibaba quietly provided its Etao data to the media in an attempt to discredit Liu and Jingdong Mall, which have responded with their blocking move. So does this mean that the latest e-commerce wars, which began more than 2 weeks ago when Liu vowed to undercut rivals’ prices on consumer electronics, were all one big publicity stunt?
It’s obviously impossible to say anything definitively, but my guess would be the answer is probably “no” and that the current price wars are probably mostly real. Alibaba has tried to maintain a low profile in the current price wars, even as Jingdong, Suning.com (Shenzhen: 002024) and Dangdang (NYSE: DANG) have been much more vocal and emitted a steady string of signals that show the wars are causing them to suffer financially.
My suspicion is that Alibaba is also feeling the pressure, and this quiet leak of data from Etao is its attempt to discredit Jingdong and Liu Qiangdong by portraying them as full of false price cutting promises. Jingdong’s blocking of its results from Etao searches will hurt consumers in the short term by making price comparisons between major players difficult. Such a move will probably also bolster perceptions that Jingdong Mall’s price-cutting promises may be at least partially insincere.
In fact, this kind of site blockage is nothing really new in China’s cutthroat online space. Suning and Dangdang both previously blocked all their pages from indexing by Etao last October, and Jingdong was reportedly considering a similar move at that time. (previous post) If those reports were true, this new blockage could just be Jingdong’s execution of the previously rumored move from last fall.
At the end of the day, this latest move reflects the very real fact that the ongoing e-commerce battle is as much a war of words as it is an actual price war. That reality reflects the fact that most of the big e-commerce players are headed by chief executives with very big egos, meaning that most would probably rather see their companies go bankrupt rather than concede defeat or merge with a rival. If that’s the case, look for the current flare-up in the war of words and prices to continue for yet another week or 2, and for the major players to fight a battle to the death that could see only a handful of sites still in business 2 years from now.
Bottom line: The latest war of words in the current online price wars reflects a broader clash between China’s major e-commerce personalities who are prepared to fight to the death.
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