Economic Daily: Platforms can intensify promotions, but they must not do so without rules

The Economic Daily published an article saying that in recent years, promotional activities such as “hundred-million subsidies,” “limited-time flash sales,” and “official direct price cuts” have emerged one after another. By passing on benefits to attract consumers, such promotion is essentially a normal market competition strategy and can help stimulate consumption demand and unleash consumption potential. However, some platforms have overfocused on traffic and transaction scale, turning subsidies into marketing gimmicks; event rules are nested at every step, added conditions are obscured and complex, and the disclosed information is vague and unclear. As a result, consumers cannot understand the rules or calculate the real prices, and the positive effect of promotions is weakened instead. At the same time, platforms aggressively run promotions and compete on prices, pushing costs more onto the merchants that have settled on the platform, compressing merchants’ profits again and again and increasing the operating pressure they must bear. This makes it difficult to better invest in product research and development and service upgrades, and in the long run will cause the industry to fall into disorderly low-price competition.

Subsidies themselves are not the problem; it is the distortion and loss of credibility that is. At present, the platform economy has moved from the “incremental expansion” stage into the “stock competition” stage. Whether the rules are transparent, whether services are reliable, and whether product quality is solid have increasingly become key factors determining a platform’s competitiveness.