Shenzhen Department Store Retail Price War Is Constantly Spreading &Nbsp; Consumers Do Not Buy It?

"Price war" has become the key word that Shenzhen retail industry can not get around.

In 2002, a fierce fight between sun department store and Mao Ye was like pushing to the first Domino, and then the battlefield spread rapidly.

Naked fighting is not only staged in department stores, but also in home appliance stores.

The "buy and sell" form of promotional activities has not been stopped for several years. "0 yuan household appliances" and "8 yuan rice cookers" are even more stunned. "No discount or no buy" has long been the habit of consumers.

Nearly 8 years of price war have exhausted Shenzhen's department stores.

However, it also enabled Shenzhen's home appliance retail industry to "return to the mainland" successfully from a "price island".

Why is the retail industry in Shenzhen keen on price war? Is there any genes in Shenzhen's commercial culture?

One

Sun department store "100 to send 60", the first price Domino down.

Shenzhen East Gate business circle, the retail department store industry's arena, often performs the price "the flesh to turn" the war.

In November 2002, the bloody and delicious scene was also vividly visible. The sun department store played a trick of "buying 100 yuan to send 60 yuan", and the Maoming industry across the street immediately hit back with "buying 100 yuan to return 50 yuan in cash".

Nearly 8 years later, the major department stores in Shenzhen almost shook each other every year and every month.

"For the first time, there will be second times. If there is one, there will be second.

Jin Guanghua, director of the planning department, Xi Kedong sighed, "everyone will feel that if the opponent is promoted, I will not follow up, then it will be very harmful to myself, and gradually fall into a vicious circle to see who will return more."

He recalled that in the first two years, the most people were "buy 100 to send 100", equivalent to half off, to 2006 and 2007, to buy 100 to send 120, the most crazy time, and even "300 yuan for 1000 yuan".

In fact, there are some innovations in this long price war.

In October 30, 2004, Mao Yip declared "63 hours not to close" in high profile, and launched a "time war" to the opponent and pushed the "buy and sell" promotion to a new climax.

Today, Mao Ye's activity has become an annual "example card", which will attract the entire East Gate business circle to boil each time.

Many people in the industry believe that with the westward relocation of Shenzhen City, the status of Dongmen business circle is also decreasing. Maybe it is the price war that has revived the Dongmen business circle.

Because merchants launched large scale promotional activities together, they attracted a lot of popularity, increased sales and gross profit of merchants, and promoted the business circle to highlight the leading position of Dongmen business circle in the department store industry.

It is understood that the annual Dongmen commercial war has become the largest shopping festival in Shenzhen, and has attracted people from Dongguan, Huizhou and even Hongkong to come to the "shopping spree", and its influence can be seen.

Two

Gome spoiler, "price island" no longer, consumers benefit

Unlike the price war in the department store industry, there is another scene in Shenzhen's home appliance retailing industry. Sometimes the intensity is too high.

In late November 2002, Gome announced that it would launch a "hot business" in Huaqiang North, and launched a super low price promotion advertising of "8 yuan rice cooker, binocular stove, 88 yuan V C D, 199 yuan mobile phone and 599 yuan color TV" the day before its opening, and the store almost had been crowded by consumers at 4 a.m.

In the face of foreign "invaders", then the "king of the mountains" was also able to show no sign of weakness. During the month of Gome, two selling activities were carried out continuously, and 10 countries, 488 yuan color TV and 388 yuan air conditioners were used to fight back to Gome.

Soon, Suning followed the steps of Gome to enter Shenzhen formally.

The market pattern of Shenzhen led by Shun Dian and Ming Yue has changed dramatically. The home appliance stores that hate price wars have been pouring into the price war.

According to some industry insiders, before the Gome and Suning came in, Shenzhen's home appliance market was calm, and it was able to occasionally get some "waves" on the price, but every time it was besieged, it led to the Shenzhen household appliances market becoming a "price island".

Shenzhen is the earliest open port city. All imported appliances in the early part of the country have to go through the first place. Although there is no cost of pshipment, the price of household appliances in Shenzhen is 10% higher than that in the mainland, and the mobile phone reaches 20%.

Data show that, after fierce competition, in 2003, the retail price of household appliances in Shenzhen dropped sharply by 10%-15%. Now, Wang Junzhou, executive director of Gome and general manager of Shenzhen, former Gome, said proudly at that time: "price war saved Shenzhen household's consumption of household appliances by four or five billion."

Three

Customers' "no discount", the price of merchants to fight a vicious circle.

In 2009, the price war of department stores in Shenzhen staged the most spectacular scene in history. Large business activities such as discount, special offer, full sale and delivery of vouchers and so on have been coming up in the major business circles such as Dongmen, Huaqiang North, Nanshan and so on.

However, a report released by the Shenzhen retail business association shows that the profit margin of shopping malls is decreasing under the promotion of large scale and high frequency market.

According to incomplete statistics, the profit margins of some shopping malls have decreased by nearly 30% or even more.

Retailers, including rainbow, do not expect such frequent discounts.

Gao Shulin, deputy general manager of Tianhong, felt very helpless. Due to frequent price promotions, the frequency of purchase was reduced during the sale of the store.

Because consumers have already had psychological anticipation, they think that businessmen will launch large scale promotional activities over a period of time. Therefore, they are holding money to buy, forming a vicious circle, but suppressing the current consumption desire.

In fact, consumers in Shenzhen are becoming less and less popular with all kinds of sales promotion.

In response to the wind of discount fatigue, Maui has taken a dose of "strong medicine". Its marketing manager, Eurasian army, said at the beginning of the year: "the mall will check the door, and most of the activities that require the brand to take out are new products instead of old ones, that is, the goods that are sold during activities are the same as those sold without activities."

However, an unnamed brand told a reporter: "those who can really discount are only those goods in stock. The space of new products is very small. It is reluctant for us to sell them at low prices, because new products will not be profitable after they are discounted."

Core interview

Liu Diyue, deputy general manager of Bauhinia City

Southern Metropolis Daily: Shenzhen department stores continue to stage price war, which is rare in other cities. Why are Shenzhen businessmen keen on price war?

Liu Diyue: the department store industry in Shenzhen has not been standardized, and it lacks the effective and systematic maintenance of the government.

Building business circles is dependent on folk forces. The government has not stood up enough to conduct comprehensive control and let everyone live and die.

For example, Maoming industry is both a real estate developer and a retailer. It occupies an important geographical position in the major business circles. In order to cash in cash quickly, it continuously promotes sales activities, and ultimately leads to the market losing control. If everyone wants to survive, it will inevitably go to endless price wars.

Nandu: Shenzhen department store retail price war is spreading. What do you think is the reason? {page_break}

Liu Diyue: a large number of migrant workers who pour into Shenzhen every year form the core consumption power of the East Gate business circle. They are pursuing youth, fashion and low price, and large-scale and substantial promotions just fit the price sensitive characteristics of this group.

Other business circles are also forced to fight price wars.

First of all, because the business circle has no characteristics, and again, there are no characteristics of the shopping malls, and the third is that the products have no characteristics. Generally speaking, everyone is in the same quality competition.

Commercial real estate is expanding too fast, and high-end consumers are attracted to their shopping centers.

Most of the middle and low end consumers in Shenzhen are mainly concentrated in the mall of department stores. What they value is not simply low price, but also the pursuit of tangible benefits.

Nandu: there are few price wars in shopping centers. Can department stores close to shopping centers and win with comfortable shopping environment, quality service instead of price?

Liu Diyue: the department store has to pay more for providing services similar to shopping centers.

But the effect of service is long term. It is not a benchmark. Under the influence of impetuous and superficial business atmosphere, businesses are reluctant to find investment and short-term returns unequal.

In addition, operators need to support the growth of their performance and the rapid expansion of enterprises through the massive flow of capital generated by "small profits but quick turnover".