Stronger by Paying Salaries and I Have 1 Billion Employees

”The Haier BCD-216SZ three-door refrigerator, 17,000 units sold; the Daikin S-Series wall-mounted air conditioner, 7,000 units sold; the Mountain Star WF0702WKR front-load washing machine, 4,000 units sold...”

Hu Yun read off the top ten best-selling large appliances one by one.

Chen Yansen glanced at the screen. A negative gross margin of 43 million was still within his acceptable range.

Jingdong, however, was about to buckle!

Watching the negative gross margin climb higher and higher, Liu Qiangdong gradually lost his composure. At noon, he couldn’t help but shoot a look at the Vice President of Procurement and Sales for large appliances.

The man understood instantly. He turned, walked over to the operations department, and had the category operators take down some of the most heavily subsidized products, marking them as ”out of stock.”

As time went on, Sunning and Gome also began to run ”out of stock.”

Fewer and fewer identical products were available for users to price-compare. Clearly, the losses were too severe, and everyone was struggling to hold on.

At 2:15 PM, the General Commerce Association issued a statement: this price war would not be considered malicious competition.

The subtext was clear: ’Go ahead and fight all you want!’

Around 2:30 PM, Sunning’s stock hit its daily limit up, and the company publicly announced that during this ”418 Home Appliance Festival,” Sunning’s business had seen a month-over-month growth of 637%!

At three o’clock, a rumor surfaced that Sunning couldn’t afford to play anymore, accompanied by screenshots showing that Sunning’s product prices had gone back up.

But ten minutes later, Han Pengde jumped in to refute the rumor, declaring they would fight Jingdong to the very end.

Liu Qiangdong immediately shot back: ”Bring it on! Jingdong has prepared 500 and 1,000 yuan ’Jing-Coupons’ for our users, free with every order!”

”As expected of Handsome Dong. Killing three birds with one stone, he’s got Sunning and Gome running in circles.”

Chen Yansen put down his phone and muttered under his breath.

Last year, Jingdong had raised 1.5 billion US dollars from institutions like DST Ventures and Tiger Fund. With that capital nearly exhausted, Liu Qiangdong had taken the initiative to provoke this price war.

First, it was to produce an impressive performance report in preparation for an IPO. Second, it was to thwart Sunning and Gome’s plans to expand online and solidify Jingdong’s industry position in the online digital and home appliance category. Third, it was to attract investor attention and seek the next round of financing.

It couldn’t be helped. Jingdong’s asset-heavy business model was destined to require massive upfront capital investment and made profitability extremely difficult to achieve.

After 3:30 PM, Jingdong, Gome, Sunning, Dangdang, and Yixun Network all experienced widespread ”out of stock” issues.

Forty minutes later, a user complained on Weibo that the e-commerce sites were not honoring their previously promised coupons.

At 4:55 PM, Sunning’s servers crashed, and users could no longer open the website’s homepage.

After the chaotic battle, everyone was outwardly furious but privately very satisfied.

Even Dangdang and Yixun saw their visitor numbers double today.

At 11:30 PM, the lights in Pinbei’s headquarters were still burning bright.

The question now facing the six e-commerce platforms was: should they continue tomorrow?

Chen Yansen glanced at the data. Not counting the 17th, they had lost 230 million today alone.

He estimated that the losses for Jingdong, Sunning, and Gome were at least 200 million each.

Adding Dangdang and Yixun to the mix, everyone had lost nearly a billion in a single day!

Suddenly, the phone on the table rang.

Chen Yansen looked at the caller ID and smiled faintly.