EComm Downsizing before CNY Signaling Pessimistic

The Chinese Spring festival is around the corner, employees who labored for a whole year are expecting year-end bonus and a ticket to go home for family reunion, being laid off is the last thing they expect in this time leading up to the holiday season. However, some ecommerce companies just couldn’t cut them a slack and started cutting back staff prior to the holiday.

Gome is among one of those employers, the Chinese BestBuy confirmed to cut down around 200 staff while group buying service Qanpin.com downsized by 40%.

It’s been a tough year for some ecommerce companies in China, admittedly.They only lay off because they’re pessimistic about the market.

Big guys who can afford price wars like Alibaba, 360buy and Suning drew away much of the huge traffic last year, making small time players even harder to make gains In the field – they’d have to pay substantial cost to acquire and maintain users compared to those big platforms. It seems that the Matthew Effect comes to play when the bigger players gain more market share at the expense of the smaller one’s.

Many insiders rethink that medium-and-small-sized eComm firms have to innovate in gaining traffic with lower cost, like by using social ecommerce site including meilishuo and mogujie.

Image credit: Bing Image