The Grand Chinese B2C Price War

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What’s so special about June 18th in China? Nothing for you and me, but for the Chinese E-commerce tailers it is the “D-Day’” for this ever-lasting price war.

Tmall, the B2C subsidiary of Alibaba announced this Monday that it would launch another “Shopping Carnival” starting June 18. What’s in the arsenal? A big pack of sales incentives totals RMB 40 million for customers. All Tmall register users are entitled to lucky draws with deposit as rewards. You can use the deposit to purchase items from TMall, the largest B2C site in China.

Meanwhile, the 3C products channel of Tmall also will splash another RMB 100 million incentives in June. In the new round of promotion, any customer swill get a RMB 2000 rebate on purchase over 2000 yuan.

The truth is, June 18th is the birthday of another B2C tailer 360buy, though the birthday boy might not want to celebrate with its competitors. Tmall’s sudden attack can never be good news for 360buy for it has planned on IPO for a while. Analysis once estimated its valuation to be $ 3 billion- $6 billion, which is far from the company’s goal of $ 100 billion. The big anniversary sales is supposed to regain the confidence in the capital market, which now seems being compromised by Tmall who stole the thunder. Moreover, rumor came that Amazon China has also invested billions for a summer price war around the corner. For 360buy, the price war started by itself now develops into a problem of to be or not to be. To jump on and fight back, that means a lot of money; to turn around, losing ground to competitors like TMall and Amazon China might further raise investors’ concern.

And this grand war is highly like to be continued year over year, endlessly.