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      Retailers accused of staging fake price war

      2012-09-06 16:15 Global Times     Web Editor: Gu Liping comment

      The country's three top online retailers may have been involved in price manipulation in a recent sales campaign that appeared to have fooled and daunted consumers, according to a probe by the country's top economic planner.

      Some e-commerce companies raised prices before a so-called price war between 360buy.com, Suning Appliance Company and Gome Electrical Appliances Holdings and the firms are suspected of cheating consumers, the Beijing News cited a preliminary investigation by the price supervision bureau of the National Development and Reform Commission (NDRC) as saying Wednesday.

      NDRC declined to comment on Wednesday.

      "Some irregular practices do exist in the e-commerce sector, and we will fully cooperate with the commission in the investigation," a source at Suning told the Global Times.

      "360buy has always actively cooperated with the investigation of the commission and will respect the investigation result of the commission," reads a 360buy statement e-mailed to the Global Times Wednesday.

      In a statement released later, 360buy said it will reflect on its activities and offered an apology.

      Founder and CEO of 360buy, Liu Qiangdong, started the initiative on August 14, claiming on his Sina Weibo that his company would keep the gross profit ratio of major appliances at zero in the coming three years and prices would be at least 10 percent lower than those at the online platforms of Gome and Suning.

      Suning and Gome fired back and vowed that their prices would be lower than those of 360buy.

      But the NDRC's random inspection of 15 appliances sold by those retailers showed they still enjoy a gross profit margin of between 4 percent and 22.43 percent by selling those products.

      "The ongoing investigation signals that the authorities are strengthening supervision over the booming e-commerce sector," Liu Buchen, a home appliance expert at Zhengzhou-based Jiachunqiu Media, told the Global Times.

      "Vicious price competitions should not be allowed in a market; and one thing is for sure: such a war will not be seen in the future after the authorities' investigation," said Liu.

       

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