chinaChinese sales show you what an offer you can't refuse really looks like. Take these REAL examples:
-1 pound of fruit for a penny
-1 sack of rice for a dime
This is fueled by the heavy investments that go into ecommerce companies like it's the dot com era all over again.
That's exactly what's been happening to community group buying platforms after the pandemic. They've offered such ridiculous prices on groceries that the government is actively stepping in to stop this madness.
In May, China's State Administration for Market Regulation gave group buying platform Shi Hui Tuan (SHT) the maximum fine of 1.5M RMB for unfair pricing: Selling products at a steep loss to grow their user base.
But is that effective regulating?
SHT and 4 other community group buying platforms each received that same maximum fine just 2 months earlier.
It pays to keep doing that despite the fines. During its 3-year anniversary sale, it earned 800M RMB (U$125M) revenue, which is 4x last year.
1.5M RMB is nothing. Earlier this year, SHT got U$750M from its round D funding. Since the beginning it raised U$1B.
Fundamentally, the platform that helps consumers the most wins. But in China, that's only if they can stay alive longer than everyone else burning through their millions of funding.