If you don't do it, you won't die. Gome staged a farce of using its own weaknesses to fight against others' strengths.

On August 12, at the "Third China Home Appliance Online Shopping Summit Forum", the Ministry of Industry and Information Technology released the "2014 First Half Home Appliance Online Shopping Analysis Report". The report shows that JD.com and Tmall have entered an era of competition for home appliance online shopping with a market share of 58% and 32% respectively, and the online home appliance business of the former offline hegemons Suning and Gome has become a runner-up.

Faced with the grim situation of being marginalized in the Internet era, the disadvantaged Gome Online began to get anxious. Just the night before, Gome leaked information to the media through an internal email, saying that it would pester JD.com to start a price war. It clearly put forward Gome's strategic goal for the second half of the year: Gome's online and offline prices must be lower than JD.com!

Is it a counterattack or a suicide?

This is not the first time that Gome has engaged in a price war with JD.com. Looking back at Gome's overall online promotion methods in 2014, it is obvious that it has been deeply trapped in the quagmire of "cutting flesh and price war", and its "lifeline" is to cling to JD.com, the leader in the field of home appliance online shopping.

During JD.com's 618 store anniversary promotion, JD.com announced that it would issue 1.6 billion yuan in cash coupons and red envelopes. Gome Online immediately responded by launching a so-called 3.2 billion yuan in cash coupons and red envelopes, twice as much as JD.com. On August 8, when JD.com launched mobile QQ shopping and issued 1 billion yuan in red envelopes, Gome Online repeated its old trick and took advantage of the hype again, announcing the release of 2 billion yuan in red envelopes on its mobile terminal.

In addition to the "deadly fight" with JD.com, old rival Suning also could not escape Gome's "sexual fantasy". August 18 was the 5th anniversary of Suning.com, and Suning.com had long ago announced that it would distribute 1.8 billion yuan in red envelopes for a big promotion. As expected, Gome attacked again and announced the launch of the "818 Peak War". Not only did it announce that WeChat would distribute 2.8 billion yuan in cash coupons and red envelopes, and compensate 300 yuan if the purchase was too expensive, but it also offered a promotional gift of Xbox One for purchases over 28,000 yuan and iPhone 6 for purchases over 50,000 yuan.

Is the effect achieved by Gome through this "hurting the enemy 800 and hurting itself 1,000" low-price war a counterattack or a self-destructive one? The financial reports released by Gome and JD.com may give us the answer: in the first quarter of 2014, Gome's omni-channel net revenue was 13.351 billion yuan, a year-on-year increase of 8.2%; while JD.com's net revenue was 22.657 billion yuan, a year-on-year increase of 65.1%. JD.com's net revenue was 69.70% higher than Gome's, and its growth rate was nearly 8 times that of Gome! Obviously, Gome's low-price strategy did not achieve the expected effect of surpassing JD.com.

If Gome had made this move a few years ago, when JD.com was still young, Gome might have been able to suppress JD.com with its supplier relationship advantage. But times have changed. After several years of rapid development, JD.com has now surpassed Gome in terms of supply chain, logistics, consumer reputation, etc., and its revenue is far higher than Gome. Gome's advantage in supplier relationships has been completely lost. If it competes head-on with JD.com, it is almost impossible to guess what its chances of winning are. Gome Online may have used JD.com as an imaginary enemy in order to use its opponent to elevate itself, but if it continues to "fight to the death" with real money, it will surely lose both the wife and the army.

A farce of using one's own weaknesses to counter the other's strengths

Compared with JD.com, Gome Online, whose online sales volume is pitifully small, took a risk and chose to "use its own weaknesses to fight against the opponent's strengths" to start a price war with JD.com. I really don't understand where Gome got the confidence from.

Two days ago, Yan Xiaobing, vice president of JD.com Group, calculated the cost of online and offline channels for home appliances at the "Third China Home Appliance Online Shopping Summit Forum", pointing out that the price difference between online and offline channels can be as high as 50%. According to the channel cost structure provided by Yan Xiaobing, the goal of "online and offline prices are lower than JD.com" proposed by Gome, which is offline, is equivalent to an "impossible task", and Gome's offline channel advantages accumulated over the years have vanished under the current situation. Therefore, Gome's move is likely to be for "attention", otherwise it is equivalent to chronic suicide. In addition, Yan Xiaobing also said that compared with offline physical stores, in addition to price advantages, online channels can provide better user experience due to information symmetry. For users, what really attracts them is not only price but also good service. JD.com can take the top spot in the field of home appliance online shopping because it has achieved an all-round lead in its peers in terms of products, prices and services. Facing such an opponent, whether Gome is really ready for a full battle or just for attention should soon be revealed through consumer experience.

Regarding the malicious price-cutting competition among e-commerce companies, industry experts believe that every time channel dealers engage in price wars, most home appliance manufacturers will suffer, because manufacturers have to hold back goods and money to provide ammunition for channel dealers. Only a few strong brands such as Gree and Haier can "stay out of it." Price wars have more benefits than disadvantages for both consumers and the entire home appliance industry, and vicious price wars are even more harmful than beneficial. Gome's series of "low-price competition" behaviors have the dangerous signs of dragging the entire industry into a vicious price war. Although consumers can get some benefits temporarily, Gome may get burned in the long run. Gome's Great Leap Forward with the mindset of price war will only become a laughing stock in the industry.

In the e-commerce world, Alibaba and JD.com have begun to run faster and faster, leaving behind Gome and Suning, which are in transition. Gome, without understanding the market, has been blindly engaging in price wars and issuing military orders at will, which not only affects the healthy and orderly development of the industry, but also adds unfinished tasks for its own company and employees, greatly damaging its own "muscles and bones" and fighting spirit.

If you don't seek death, you won't die. Gome, who wants to make a comeback by "using your own weakness to defeat the opponent's strength", you'd better be more careful!

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.