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The Pricing Behavior and Competition Effect in E-Commerce Shopping Festivals

【Authors】
ZHANG Hao
【WorkUnit】
National Academy of Economic Strategy, CASS, 100028.
【Abstract】

This paper analyzes the behavioral mechanism of pricing in sales promotion and the impact of competition among e-commerce enterprises. And empirical tests with price adjustment data about more than 4000 home appliances sold on the three online shops of JD, SUNING and GOME are conducted. The results show that, in order to enhance the effect of concentrated promotion, these e-commerce companies always cut prices in shopping festivals and raise prices otherwise, and adopt a staggered highlow price adjustment method. The products involved in the competition among multiple e-commerce companies generally see a bigger price reduction in the concentrated promotion period, but the prices of these goods will be raised to a higher level than those of the goods sold without competition in nonshopping festival period. The reason is that competition brings risk to the upwards price adjustment of the staggered method, and increasing the frequency of price adjustment will adversely affect its function of affecting customers' purchasing psychology, so the prices of products involved in competition are raised by a relatively wide margin in non-shopping festival period. It can be seen that the E-commerce Shopping Festival is essentially the centralization of price competition based on customer psychology guidance, but does not mean that consumers can get real benefits. Considering the long-term development of the industry, efforts should be made in reducing the activities that induce speculative consumption, and shifting the focus from price competition to the aspects such as improving quality and assisting innovation.


JEL:M21, M31, D40

【KeyWords】
E-commerce Enterprises, Centralized Promotion, Price Adjustment, Competition Effect, Micro-data