China’s richest man, Wang Jianlin, blasts ‘money-squandering’ e-commerce start ups
Wang Jianlin, chairman of conglomerate Dalian Wanda, says sector’s new players must obey the same commercial principles as other forms of business or perish
The “money-squandering” business model of mainland Chinese e-commerce companies that aims to attract customers by continuously “subsidising” them is wrong, the country’s richest man told domestic media.
“Their mindset is that as long as there is customer traffic, making money isn’t a problem. Such a model violates basic commercial principles,” Dalian Wanda chairman Wang Jianlin told The Beijing News.
“If they don’t find a profitable model, instead of squandering money, they won’t survive.”
Wang’s comments were directed at the common practice of Chinese internet companies of giving customers coupons or selling products at cutthroat prices.
The property tycoon is unimpressed by the way the country’s e-commerce enterprises operate. “Their [customer] traffic is an illusion: once the subsidies stop, the customers leave.”
He is equally pessimistic about cinema ticket websites.