Suning sees surge in online sales

Daily sales of the online platform of home appliances retailer Suning reached nearly 300 million yuan ($47.15 million) during the "price war" that began Wednesday, the company's chairman said Monday.

Encouraged by its success in the price competition with online retailer 360buy and the online business arm of Gome, the Jiangsu-based home appliance retailer is planning to further its efforts in the e-commerce sector.

"Average daily sales of Suning's online platform are expected to surpass 100 million yuan by October, and daily sales in the peak season of December are expected to reach 500 million yuan," Suning's Chairman Zhang Jindong said on the company's Sina Weibo account Monday.

Liu Qiangdong, CEO of 360buy, also said on his Sina Weibo account that the company had cleared nearly half of its inventory before the end of Wednesday, or about 200 million yuan, boosted by the companies' online promotion.

"All the e-commerce websites that took part in the price war Wednesday have been rewarded with huge profits, as both website visits and online sales surged," Chen Shousong, an e-commerce analyst with consulting firm Analysys International in Beijing, told the Global Times Monday.

However, Chen noted that despite the surge in sales, the price war this time may hurt the brand image of these e-commerce websites given the negative publicity surrounding the price competition.

Some consumers claimed that the prices during the promotion are actually not significantly lower than the prices before, and the e-commerce websites had deliberately raised prices of some products before they announced a price cut. The price competition is more like an online promotion instead of a real price cut, Chen told the Global Times.

In the second quarter of this year, China's online B2C sector was still dominated by Alibaba's tmall.com with a market share of 57.1 percent, followed by 360buy with 20.1 percent and Tencent with 4 percent, according to data from consulting firm iResearch.

The online platform of Suning ranked fourth with a 3.8 percent share of the market, according to iResearch.

And Chen said that despite Suning's increasing investment in the e-commerce sector, it is not very likely for it to surpass 360buy in a short term.

However, Liu Buchen, an industry consultant at Zhengzhou-based Jiachunqiu Media Institution, told the Global Times that Suning and Gome, which have also reported strong sales in their offline businesses so far, may enjoy certain advantages in the competition with other e-commerce websites.

"Their offline sales can to some extent compensate the current losses in the online sector," said Liu.