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NDRC to Fine 360buy, Gome and Suning for Fraud
Summary:An investigation launched by NDRC found that the price war between Buy360, Suning and Gome involved fraud on the part of all three companies.


Sept 5
, 2012
Translated by Tang Xiangyang

The National Development and Reform Commission (NDRC) has been investigating the price war between three online shopping platforms: 360buy (京东), Suning (苏宁) and Gome (国美). The investigation has revealed fraud.  

On Aug 14, Liu Qiangdong (刘强东), CEO of 360buy, posted on his Weibo microblog that in the coming three years, all home appliances on 360buy would be priced at cost and be 10 percent cheaper than those sold by Suning and Gome. Executive Deputy President of Suning Li Bin (李斌) and Deputy President of Gome He Yangqing (何阳青) both responded saying products on their websites would be cheaper than those on 360buy.

However, NDRC’s investigation found that all the three companies have fabricated prices of their goods. Their “on-sale” prices were higher than the lowest price over the previous seven days.

Liu Qiangdong said on his Weibo that all big home appliances would be sold without profit. But a spot check of 15 products found that the lowest gross profit margin was 4 percent and the highest was 22.4 percent. Even “on-sale” products have reached profit margins of up to 10 percent.

Many internet users also found that products advertised at low prices were allegedly in short-supply. However, the investigation showed that those products were piled up in warehouses.

The three online shopping companies will be fined, but it hasn’t been disclosed how much the fine will be.

Links and Sources
The Beijing News- 发改委调查电商价格战


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