360Buy to Maintain Zero Gross Profit on 3C for 3 Years
Sina Tech, 8/14/12
Liu Qiangdong, CEO of Beijing-based B2C e-commerce platform 360Buy, today announced on his personal microblog that 360Buy will implement a zero gross profit margin policy for its consumer electronics and home appliances business over the next three years. Liu said that any sales staff that take in even RMB 1 in gross profit over the next three years will be summarily dismissed.
Liu added that 360Buy will directly target its competitors, Suning (002024.SZ) and Gome (0493.HK), guaranteeing appliance prices at least 10% below those of either competitor. 360Buy will soon release details of the policy.
Products covered by the new policy include air conditioners, refrigerators, washing machines, home entertainment centers, DVD players, mini-speakers, tablets, hot water heaters, dishwashers, stove-top ventilators, freezers, and various accessories.
Under the new policy, 360Buy has recruited 5,000 undercover shoppers to gather pricing information from Gome and Suning stores nationwide. Consumers who visit Gome or Suning and find prices for items on 360Buy's mobile application that are not at least 10% lower can file a report. Once an undercover shopper confirms the report, 360Buy will immediately lower its price or issue a coupon to the reporting consumer to meet its discount guarantee.
The new promotion also includes revised delivery policies adding consumer electronics and home appliances to 360Buy's "211 Delivery Service." Customers in 20 cities - including Beijing, Shanghai, Guangzhou, and Chengdu - who place an order before 11 AM are guaranteed same-day delivery, and orders placed before 11 PM will be delivered by 3 PM the next day.
Keywords: Liu Qiangdong consumer electronics e-commerce Internet B2C 360buy Gome Suning 3C home appliances 002024.SZ 0493.HK
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