What is the cause?, The original price of 69.9 yuan for durian thousand layers is only 42 yuan! Hema and Sam engage in a "price war" retail | Hema | Durian

Last weekend, when I opened the Hema app, I found that the original price of the durian thousand layer, which was 69.9 yuan, was only 42 yuan! Guo Shijun was shocked and noticed that in addition to durian layers, a large number of discounted products such as eggs, Swiss rolls, and Xishuangbanna corn would appear when searching for "moving mountain prices" All of them are in the discount.

What is the price of moving mountains? The official explanation of Hema is to demonstrate the craftsmanship spirit of Yu Gong in moving mountains. However, due to the launch of "Moving Mountain Price" coinciding with the price reduction strategy of Hema and Sam going back and forth, many netizens jokingly claimed that this "mountain" is not that "mountain"!

In the face of Hema's price hike, Sam has recently implemented multiple rounds of price reductions for some products. Some netizens joked that their intention was to "kill horses".

As two major warehouse style member stores, what are the causes of the "price war" between Hema and Sam? What should consumers pay attention to while enjoying low prices?

How did it start to fight?

Netizens have discovered that this price war began with a box of durian layers.

On August 1st, some netizens claimed that the 1000g durian layer, which was previously priced at 128 yuan on Sam's, was priced at 99 yuan on Hema. Immediately, Sam came to "fight" and lowered the price to 98.9 yuan.

Hema refused to be outdone and changed the selling price of durian layers to 89 yuan. Subsequently, Sam caught up and lowered the price again to 88 yuan.

Faced with the "price war" of "you lower one yuan, I lower one cent", netizens exclaimed, "This is not a business war, it's clearly a primary school student fight!" In the end, Hema lowered the price again by reducing the quantity, and the "mountain moving price" of a 470 gram durian layer dropped to 42 yuan. As of the time of publication, the Hema app shows that this durian layer has been sold out in the Beijing area.

Except for durian layers, products such as watermelon, eggs, mooncakes, and snacks have all participated in this "price war".

Both Hema and Sam's seem to have a track record of competition among supermarkets that focus on member retail formats. According to media reports earlier, Zhu Xiaojing, president and CEO of Wal Mart China, said in an internal meeting that Hema is the only competitor of Wal Mart's Sam's Club in China.

In response to this, Hema CEO Hou Yi responded in a media interview on July 26th: Hema has been working hard, constantly innovating and changing, and we humbly learn from international retail giants. For us, the future opportunities are enormous. In the near future, Hema will definitely be Sam's biggest market competitor.

Netizen: Just want to clap and cheer

How should we view the price war between Hema and Sam in this round? As direct beneficiaries, consumers have also sparked a wave of discussions online about this issue.

Zhihu Answerer @ Shen from Sunshine: We strongly support competition between enterprises, and ultimately benefit consumers.

After being monopolized by one company, service quality is prone to decline, and any business war, price war, and competition are all good things.

It's best to have 3-5 companies competing, so that consumers can have more comparisons. I hope they can fight again and increase the cost-effectiveness. I also hope that through a round of in-depth business competition, Sam and Hema can optimize their overall shopping experience.

Zhihu respondent @ Mister Tang: The essence of business is competition.

The end of competition is "price war", the end of "price war" is monopoly, and the end of monopoly is resource integration. Every progress in business will give birth to new formats.

A one yuan discount is not significant, but for consumers, it is already a visible discount and a huge threat to both parties in business competition. The ultimate beneficiaries of commercial retail are customers.

Zhihu Anshu @ Ye: There is a business war to be fought, which indicates the vitality of this industry.

Hema and Sam's fierce competition sparked the most direct price war. They have three struggles, one for the middle class, the other for the brand, and the other for themselves. However, this competition may not be limited to a "price war", but will evolve into a comprehensive competition between new retail and traditional retail.

Regardless of whether the "price war" will continue, we hope that both companies can continue to pay attention to their own quality. I believe this is the reason why everyone enjoys the healthy competition between the two companies.

Zhihu Answer @ I am V: In fact, Hema's "price war" started more than three years ago.

At that time, Hema and Sam came from the same source of goods, so Hema would be cheaper. But at that time, people were not very clear about the supply chain of Hema and Sam, so they naturally treated Hema and Sam's products differently. Even though Sam sells at a high price, there are still many people who pay for the Sam brand.

What hurts Hema the most is not that they cannot compete with Sam, but that Hema's strategy of selling at low prices is difficult to achieve results at the same cost. So for a long time, Hema held higher costs but sold at lower prices, and the most helpless thing was that the price had to be cheaper than Sam.

Where will the "price war" go?

"The reason why 'price war' is praised by consumers is because cost-effectiveness is an eternal pursuit in consumption." Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center at the International United Business School of Zhejiang University, said in an interview with China News Service that both Hema and Sam's are mass selling supermarket models, and behind the 'price war' is the competition of supply chain efficiency and cost between the two sides. The retail industry is increasingly relying on strong supply chains.

In the Internet era, new retail markets have emerged. Jiang Han, a senior researcher at Pangu Think Tank, pointed out in a post that new retail enterprises represented by Hema have begun to emerge comprehensively and continue to undergo transformation. After seven or eight years of development, Hema has gradually formed its own style and context, which is the core advantage of new Internet retail.

Jiang Han believes that the reason why Hema is valued by Sam is because it is a new species in the retail market, and this "dimension reduction strike" advantage gives it the ability to compete with established giants such as Sam. So, this competition is no longer just a simple "price war", but a comprehensive competition of business models, supply chain systems, and member ecosystems. What will happen in this collision will be a huge unknown.

Jiang Han said that he hopes that new retail formats in China, represented by Hema, can truly find their own advantages and gameplay in the competition with established retail, and truly promote the development of the retail industry towards a higher direction.

In addition, Pan and Lin remind consumers that while enjoying the low prices brought about by the competition between LeXiang Hema and Sam's, they should pay more attention to comparing the after-sales service capabilities of the two. Consumers should maintain rationality and pay attention to the quality and value of goods in addition to price.