My country made it illegal to sell at a loss (for that exact reason) and IIRC wish and/or temu got in some kind of legal trouble for it. So did IKEA when they tried to use their restaurant as a loss leader - illegal here!
Then there’s the matter of shipping subsidies from the PRC, ain’t no way cross-continent shipping is 0.02 € on a 5 € item for which the last mile is handled by the national postal service which I know for a fact charges anyone more than one euro for delivering a damn envelope.
Those reasons sound removed. Having a loss leader product or line just means you are recouping it elsewhere. It’s a draw-in, like $1.25 hotdogs at Costco. It’s different than if your whole business operates at a loss for a certain time in order to squeeze out competition. The only way this would make even marginally sense is if say both IKEA and JYSK had a cafeteria and IKEA decided to sell food at a loss while JYSK would not be able to afford in that segment.
From what I know, it’s not actually China subsidizing shipping, but the individual target countries instead, mostly on taxpayer money. This wouldn’t be bad in practice, except that goods not originating from China do not have subsidized shipping, thus the unfair advantage.
My country made it illegal to sell at a loss (for that exact reason) and IIRC wish and/or temu got in some kind of legal trouble for it. So did IKEA when they tried to use their restaurant as a loss leader - illegal here!
Then there’s the matter of shipping subsidies from the PRC, ain’t no way cross-continent shipping is 0.02 € on a 5 € item for which the last mile is handled by the national postal service which I know for a fact charges anyone more than one euro for delivering a damn envelope.
Those reasons sound removed. Having a loss leader product or line just means you are recouping it elsewhere. It’s a draw-in, like $1.25 hotdogs at Costco. It’s different than if your whole business operates at a loss for a certain time in order to squeeze out competition. The only way this would make even marginally sense is if say both IKEA and JYSK had a cafeteria and IKEA decided to sell food at a loss while JYSK would not be able to afford in that segment.
From what I know, it’s not actually China subsidizing shipping, but the individual target countries instead, mostly on taxpayer money. This wouldn’t be bad in practice, except that goods not originating from China do not have subsidized shipping, thus the unfair advantage.