Questions raised over stores' price war

According to a company document e-mailed to China Daily, it aims to achieve sales revenue of 100 million yuan by 2013, topping the market share in the capital city.

The tactic will be later extended from Beijing to Shanghai, Guangzhou, Shenzhen, Chongqing and other major Chinese cities, according to Sun Weimin, vice-president of Suning.

Meanwhile, Jingdong has also felt the pinch of Suning's online platform, which has gained huge momentum since its establishment in 2010.

Min Juanqing, executive deputy director of Suning's marketing department, said the online store has maintained an impressive 70 percent month-on-month growth since the first half of this year and aims to drive up annual revenue to 20 billion yuan.

According to research firm Analysys International, while it accounted for a mere 3.4 percent in overall business-to-customer online transactions in the second quarter, compared with Jingdong's 15.5 percent, its pace of growth is worth noting.

Promotion or ploy

So prices are slashed, at least according to advertisements. But data from etao.com, a website that tracks and compares prices of online products, depicted a different picture.

Among the 2,200 electronic appliance products for sale at Jingdong Mall, only 158 items, or 7.2 percent, had been reduced in price and about 30 percent of the supposedly lower-priced items were out of stock.

In general, the price cut is limited to 10 percent.

The sizzling fight may result in a win-win situation for merchants to push up sales in a concentrated period of time, said Analysys International researcher Chen Shousong, especially by luring new customers like Xu who is not "price-sensitive".

Traffic rocketed from the day the price campaign kicked off, according to data tracked by Analysys International. Jingdong attracted 1.8 percent of global traffic on Aug 15, compared with 0.75 percent two days earlier.

Suning and Gome rose to 0.8 percent and 0.2 percent from 0.15 percent and 0.03 percent.

Breaking down to items, Suning gives the most discounts on TV sets while Gome provides the best bargain prices for fridges. Jingdong Mall is more balanced among all appliances.

Wang Zikui, just married, is well positioned to watch the fray. As she looked to buy some home appliances online, she found only a small fraction of goods were on sale at bargain prices.

"In my case, only one Sony TV set was 500 yuan lower than shopping malls. A Panasonic fridge that I like was even 200 yuan more expensive online," said Wang, 28, who works with a publishing house in Shanghai.

"I have been checking prices almost nonstop for two months so that I can observe the fluctuations in prices. But the majority of shoppers won't be as familiar (with the prices). So I think what they are trying to do is to create a surge in shopping and drive up their sales," she said.