China Daily, August 18, 2012

The Ministry of Commerce on Friday said it would introduce more specifications to better guide the development of the nation's e-commerce market.

In the meantime, consumers complained that the ongoing price war among major e-commerce websites was merely a tacit marketing conspiracy.

The ministry had in the past issued at least two specifications to regulate the behavior of e-commerce companies, and more national standards will be announced as the industry's turnover increases, according to Wang Desheng, deputy director of the ministry's department of circulation industry development.

"More guidance is expected to be issued," said Wang, without giving a timetable. He also did not specify if the price war has violated the ministry's regulations.

Earlier this week, Jingdong Mall and Suning Appliance announced the launch of a price-reduction campaign to lure customers. Other online retailers quickly joined the price war, claiming to be selling products at lower prices than their competitors.

However, some customers found that the so-called "price cuts" came after significant price hikes a day before.

"Most of the products' prices on Jingdong were increased before they brought them down. Although some of the prices were lower than when the war started, the price cuts were definitely not as dramatic as the retailers claimed," said Yan Chengyue, a Jingdong customer from Xiamen, Fujian province.

Online retail search engine eTao said that on the first day of the price war, only about 5,000 items' prices were reduced across the nation's top six online shopping websites, including Jingdong, Suning, Gome and Dangdang. The discounted items accounted for 4.2 percent of the around 117,000 products on eTao's price-monitoring radar.

Jingdong, the major instigator of the price war, cut the prices of just 6 percent of its large household appliances, said eTao.

Wu Sheng, senior vice-president of Jingdong, refused to comment on the figure, claiming that eTao's research lacked credibility.

"The margin of price reduction failed to meet public expectations, and the price war will not help boost sales drastically," said Chen Shousong, an analyst at Internet research company Analysys International.

However, all the large e-commerce websites are set to benefit from the price war in terms of online traffic and sales, although some websites, such as Suning, may encounter some problems in handling such a large amount of visits, said Chen. "It will be a win-win situation for all major e-commerce providers."

Apart from e-commerce, the ministry also introduced standardization measures in some other key sectors such as logistics, circulation of agricultural products, wholesale and retail.

"A standard system covering major industries in supply chains has basically been established, backed by standards in the key sectors of business services, neighborhood services, wholesale and retail," said Wang from the ministry during a news briefing on Friday.

By the end of 2011, a total of 800 standards had been issued for the commercial distribution sector, and a further 200 will be issued this year, according to the ministry. The regulation on standardization in the commercial sector, issued by the ministry in early May, came into effect on July 1.

"Standardization serves as the fundamental issue in promoting services quality and upgrading industries. The modernization of supply chains will lower costs and enhance efficiency, and thus boost domestic consumption," Wang said.

He added that the supply chain industry contributes more to China's GDP growth amid easing export growth and curbs on property investment.

"This year and next, the ministry will carry out demonstration projects of standardization application focusing on product quality and safety, energy conservation and environmental protection," Wang said.

China has been trying to boost domestic consumption.

The State Council issued a guideline on Aug 7 to boost domestic sectors in supply chains. Wholesale markets of agricultural products and farmers' markets will be exempted from land use tax and house property tax for a certain period.

(China.org.cn)