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No e-commerce: malls to tenants

2013-11-05 14:58 Global Times Web Editor: qindexing

China's 19 largest furniture chain shopping malls, including Easyhome and Red Star Macalline, signed a document on regulating e-commerce in their malls, forbidding tenants from using stores as offline experience venues for e-commerce, the Beijing Times reported Monday.

This development shows the intensifying competition between online and offline businesses as e-commerce continues to grow, experts told the Global Times.

Beijing Easyhome Investment Holding Group Co announced on popular instant message app Wechat Sunday that it has forbidden its commercial tenants from promoting online business activities under the Easyhome name, and decreasing their online prices without Easyhome's permission.

Che Jianxin, the president of Red Star Macalline Co Ltd, the largest furniture chain mall in South China, sent a notice via Wechat to his staff earlier to regulate the commercial tenants' business behavior related to tmall.com and other online business platforms, according to the Beijing Times.

Red Star Macalline could not be reached for comment by press time.

The furniture shopping malls are defending their business in preparation for the coming sales promotion for November 11, dubbed "Singles' Day" in China, that will be launched by domestic e-commerce shopping platforms, including tmall.com and jd.com, the report said.

This online sales bonanza was initiated by China's e-commerce leader Alibaba Group, which reaped sales of 19.1 billion yuan ($3.13 billion) via its two online shopping platforms taobao.com and tmall.com on 2012's Singles' Day.

Considering the strong development of online businesses and the increase in online shopping, it is meaningless to keep tmall.com out of the furniture market, a PR staff member of Alibaba Group told the Global Times Monday on the condition of anonymity.

But the PR staff member from Easyhome who prefers to be anonymous told the Global Times Monday that the ban is not aimed at the special sale on November 11 promoted by e-commerce platform tmall.com.

The PR staff also said Easyhome will hold a press conference Tuesday to present more detailed information.

The conflict between offline shopping malls and e-commerce platforms is inevitable because both parties gain profits from rentals and advertisements, Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, told the Global Times Monday.

Shopping malls have now become a place for customers to select and try out products while the actual purchases are eventually made online, Lu said.

The conflict indicates a battle of sale channels, Zeng Tao, a Shanghai-based independent analyst, told the Global Times Monday.

He noted that the rise of e-commerce has made traditional retailers feel threatened about their long-term future and unsatisfied at having become free "assistants" for e-commerce.

Tmall.com needs offline experience centers for customers to view furniture before making the deal but it will be hard to do because the offline furniture business has been monopolized by shopping malls such as Easyhome, Zeng said.

Similarly, it will be difficult for offline stores to run online businesses because most customers have gotten accustomed to online stores such as tmall.com, Zeng said.

Easyhome plans to launch its own online platform juran.com on November 11, according to its website.

With the development of e-commence, it is impossible for offline shopping malls to stop e-commerce businesses from selling furniture, Zeng said, noting that cooperation between online and offline retailers will be a future development.

Zhao Zhanling, a legal counsel with the Internet Society of China, told the Global Times Monday that the malls' practice is illegal and likely to violate the country's anti-monopoly law.

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