Who is hurt by low-price book promotions? , the founder of Motie rips off JD.com
With the official launch of JD.com’s 618 event, the conflict between the platform and merchants has once again intensified.
On May 31, a WeChat post by Shen Haobo, founder, director and CEO of Motie Group, attracted attention. Shen Haobo said, “While Motie has completely stopped shipments to JD.com and has repeatedly expressed opposition to JD.com’s low and arbitrary prices that disrupt market order, JD.com still ignores our appeals and continues to force our products to participate in their It’s a low-price promotion that repeatedly rubs our faces on the ground.”
Shen Haobo said that Mo Tie will take three measures: "First, we will take legal measures to protect our rights and interests at all costs. Second, we will continue to stop shipments to JD.com and will not send any copies. If a deadline is added, it will be No time limit. 3. We will continue to require JD.com to remove all our products and return them to us.”
In response to Mo Tie’s remarks, a JD.com purchasing and sales employee said that the goal of JD.com’s 618 Books campaign is just to allow more consumers to buy cheap and good books. JD.com has never wanted to stand on the opposite side of publishing houses and the industry. The two sides should be partners in the same camp. We hope to work with everyone to bring good books and good prices to consumers, instead of letting the high cost of live streaming hurt the industry and hurt the industry. Writers who create with heart. JD.com has legal independent pricing rights for self-operated books and is willing to give up more profits to benefit consumers.
In this regard, an industry insider told China Business News that there are two models for publishing houses to operate on JD.com, one is the publishing house’s official flagship store, and the other is JD.com’s self-operated flagship store. The dispute between the publishing house and JD.com this time mainly involves JD.com’s self-operated channels, and the decision-making power of the official flagship store’s participation in activities lies with the publishing house. In terms of self-operated channels, the cooperation between publishing houses and e-commerce platforms mainly relies on consignment sales. If the platform cannot sell the products, they will be returned to the publishing house. There is also a platform underwriting model, where both parties agree on a payment discount payment method, and it is the platform's responsibility to sell at a loss. Judging from the reaction of Motie, the cooperation method between Motie and JD.com should be a consignment model.
Under JD.com’s self-operated model, JD.com will have certain autonomy over the pricing of goods, unless both parties sign a price limit agreement in advance. If the publishing house does not have a price limit for all products or only has a price limit for a single product, and the platform sells the product at a price lower than the supply price, and the subsequent settlement is based on the supply price, the publishing house has nothing to do.
However, it is unknown whether the supply price can be settled at the time of settlement. The above-mentioned industry insiders said that repayment after platform promotions may increase sales and negotiate with the publishing house again, and the publishing house will be very passive if the supplier is required to settle the payment according to the conditions of the big promotion. In addition, the platform's low-price promotion may cause other platforms to follow the price. After one platform starts a low-price promotion, other platforms will follow suit. When all platforms sell at low prices, it will be difficult to settle with the publisher at the original supply price, which is equivalent to "the more you sell, the more you will lose." The industry insider said that in terms of share, JD.com’s share of online book sales has declined after the rise of other platforms, and low prices may not necessarily solve the current dilemma of declining sales on the platform. In addition, the rampant piracy of books has also had a big impact on the publishing industry and platforms. Currently, the industry is worried about the further deterioration of the entire ecology.
In Shen Haobo’s circle of friends, he also emphasized not to follow the price, “Especially to Dangdang Boku Wenxuan Zhejiang and other e-commerce partners who have always had a good relationship with Motie. I sincerely ask everyone not to follow the price. Follow the price, don’t follow the price, and get through this round with us.”
On May 21, two "joint statement notification letters" issued by 46 publishing units in Shanghai represented by 10 publishing houses in Beijing and the Shanghai Publishing House Management Association attracted attention. The notification letter mentioned that in response to the 618 promotion plan proposed by Jiangsu Yuanzhou E-Commerce Co., Ltd., that is, "all varieties of books are guaranteed to have a 20-30% discount on price to participate in a total of 8 days of promotions from May 19 to June 20." The publisher does not participate and is not responsible for any rebate fees incurred during the event.
Regarding the conflict between JD.com and publishing houses, You Yunting, a senior partner at Shanghai Dabang Law Firm, told China Business News that if JD.com uses its advantageous position to force publishing houses to participate in promotions, my country’s antitrust law does have restrictions on this. From the actual situation, JD.com is more like a strong channel, but it has not reached the level of abusing its market dominance. The publishing house can also sue it for breach of contract based on the contract between the two parties and the Civil Code, or defend its rights based on Article 35 of the E-Commerce Law: e-commerce platform operators shall not use service agreements, transaction rules, technology and other means to tamper with the contents of the platform. Operators impose unreasonable restrictions or attach unreasonable conditions on transactions, transaction prices, and transactions with other operators on the platform, or charge unreasonable fees to operators on the platform.
In addition, in this case, a number of publishing houses in Beijing and Shanghai joined together to boycott JD.com’s promotions, which is suspected of horizontal monopoly, and they can also apply for exemption in accordance with the law. You Yunting believes that if publishing houses and industry associations want to prove that their collusive behavior meets the exemption standards of the Anti-Monopoly Law, they should first explain the rationality of their actions. The cost structure of books can be disclosed in detail, such as copyright costs, that is, manuscript fees, printing paper costs, editorial management costs, marketing costs, etc. These data can help explain why publishers need to resist low-price sales, because if they are sold at a 20-30% discount, If sold at a lower price, the publishing house will face huge losses, and the industry ecology will also be seriously damaged.
