Going behind China's home appliance price war
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E-mail CNTV, August 23, 2012
It's been a week since a dramatic price war erupted between some of China's biggest home appliance retailers. Despite pledges of steep price cuts, consumers have seen very little savings both online and at department stores. Figures from yitao.com show only 5 percent of products are on sale, with a discount of less than 10 percent.
After a weeklong price war, consumers are feeling more confusion than benefits. All retailers are pledging their prices beat any other shops'. So now customers like Lin Ziren have to double-check prices, before making any purchase.
Lin Ziren, shopper, said, "I don't see many discounts from any retailers as they've announced. Anyway, for the laptop I want to buy, the price online seems a bit lower. Perhaps I should buy one there."
But he may soon find another problem. Products sold with seemingly steep discounts are often out of stock.
Jingdong, the biggest online retailer, and the initiator of this price war, apologized but has also been quick to defend it.
Wu Sheng, Deputy CEO of Jingdong Online Shop, said, "It's just because our low-price products are popular that some of them are running out of stock. We have under-evaluated our customers' purchasing power. We are sorry for causing the trouble."
To prove their competitive edge, some retailers have set up price-comparing tables right in their stores, so that hesitant shoppers like Lin Ziren can check online if there are cheaper products.
Suning provides five computers for consumers to compare the prices between different retailers. But among the five, four of them are actually not working. And even if you use this working one, still, there are many tricks behind it.
The secret lies in these complicated model numbers. This TV set is only sold by Suning, as they've signed a contract with their suppliers. But a highly similar TV set can also be found on the websites of their rivals. Only the model number has been changed slightly. But that slight difference has made it a huge difficulty for consumers to really compare the prices.
Now the question is, how true are the retailers' pledges of THE lowest prices of all?
Li Qi, Senior Manager of Suning Home Appliance Store, said, "Suning does not participate in price wars. We have never made any pledges that our prices will always be lower than other retailers'. I'm not sure where you have seen such statements."
Wu Sheng said, "Of course we can't make sure all of our products will be cheaper than our rivals' all the time, because it takes time for us to adjust when we find our rivals are offering lower prices."
The pledges are on their microblog accounts.
Li Wanhua, attorney, said, "Their statements on microblogs ARE counted as a way of advertising. And their promises there must be realized. But if you take a closer look, the trick is that all their statements are not clear in details, like when and where exactly the price cut will happen, what products are included, and how much the price cut will be. So in a legal sense, they do not constitute a contract promise."
Legal experts have called for more laws and regulations to curb such unethical practices. Consumers are hoping for a good shopping environment where it doesn't take a legal expert to find out if they are being fooled.
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