Price war is inevitabl

Translated from 21st Century Business Herald

A price war launched by 306buy.com, one of China’s largest online business-to-customer (B2C) household-appliance retailers, is a milestone in the development of China’s e-commerce business.

The other two giants in the Chinese household-appliance retail market are traditional outlet retailers.

The third type of retailer — customer-to-customer, or C2C — is ducking the price war. These companies’ disadvantage is evident: Consumers find it difficult to buy quality products all the time from the platform, even if C2C prices are often lower.

So the price war is actually a struggle between two business models — traditional outlets, and online B2C e-commerce ones.

As middle and small cities and towns become the new markets for household-appliance retailers, opening brick-and-mortar stores in so many small towns is not realistic, given the high cost of doing so. But China’s highway system is extending into counties and even towns, sharply decreasing logistics costs and making it possible for B2C retailers to reach new consumers at increasingly lower costs.

That’s what gave 306buy.com the audacity to start the price war, which reflects the development of China in many fields.