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Stores slash prices to compete with online deals
By Xu Junqian ( China Daily )
2011-December-4

SHANGHAI - It's midnight on a regular Friday. The most bustling street in the metropolis seems to have fallen asleep, with few people wandering about and stores all closed up.

Except at one department store, where crowds of shoppers were pushing and fretting, scrambling for one pair of boots, or in some cases, eight, late into the wee hours.

"The discount is unprecedented," said Hui Zi, a shopper in the store, excited and in a rush. "For every 99-yuan ($15) purchase, you get a 70-yuan deduction. And ultimately, if you pay as much as 5,888 yuan, you can bring an iPad home."

A galaxy of department stores in Shanghai have kicked off their annual promotions one or two weeks earlier than in previous years.

Of the eight branches of the Hong Kong New World Department Stores in Shanghai, four have introduced a three-day all-night-out promotion starting from Friday, offering discounts as low as 70 percent off, and giving out more than 100 iPads for those who spend as much as 5,888 yuan from 11pm to midnight at one store.

The gesture has enticed a huge crowd of shoppers, mostly women, who skip classes or work and get up early in the morning to "catch the worm".

Wang Yijun, a 46-year-old bank clerk, for example, has asked for a half-day leave of absence and arrived hours before the stores opened with her daughter to shop for a New Year's dress.

To tackle the large crowd, the stores also increased security forces to prevent accidents from happening.

In the Huaihai store alone, the number of security guards has been raised from 30 to 120, excluding assistants from the regional police office.

With the rise of e-commerce, department stores have been gradually losing market share, and the unprecedented early promotion is a sign of fighting back.

"One reason is that Spring Festival is coming earlier this year, pushing the promotion a bit forward. But essentially, it's because department stores are taking advantage of the season as a last straw to save themselves," said Mo Daiqing, a senior researcher of online shopping and store shopping from China E-commerce Research Center based in Hangzhou.

But statistics from Taobao, the largest online shopping bazaar, showed that, during its Single Day Promotion on Nov 11, the first-hour trade value had surpassed 100 million yuan, and the whole day grossed a total value of 3.36 billion yuan.

Mo, the researcher, suggests that simply lowering prices is not a sustainable option to attract customers back from online shopping websites.

Department stores, which face ever-increasing rentals, have little competitive advantage in prices over websites.

"It would be wiser to upgrade shopping environment and product qualities, which are the biggest advantages of stores against online websites," he said.

Shen Cheng contributed to this story.

China Daily

 

 
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