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Gome.com.cn to Wage Price War in 2013

Ebrun, 4/26/13

Peng Liang, a spokesperson for Chinese home appliance and consumer electronics retailer Gome's (0493.HK) B2C site Gome.com.cn, said today that Gome.com.cn plans to maintain a strategy of waging price wars throughout 2013. Gome.com will go on the offensive effective immediately with a range of promotional strategies including group-buy deals, limited-quantity special offers, and across-the-board price cuts.

Discussing the reasons behind Gome.com.cn's price war strategy, Peng said that for e-commerce companies to continue to expand scale, logistics, warehousing, and other capabilities, they will need to continue to make massive investments in their business — something Peng said would be difficult to maintain for purely e-commerce companies. More than merely dragging its chief competitors into the fray, Peng said, Gome.com's price war strategy is a way of "competing all-out against ourselves."

Gome's main targets in the price war will be the company's old nemesis consumer electronics and home appliances retailer Suning (002024.SZ) — in particular Suning's "cloud commerce strategy" — and Beijing-based B2C e-commerce platform Jingdong (formerly 360Buy).

Keywords: e-commerce Internet strategy B2C Gome 002024.SZ 0493.HK Peng Liang Gome.com.cn

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