Case Study. How to Combat Price Dumping Across the Entire Online Market

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Clients are manufacturers of climate control, water heating, and heating equipment. These companies operate their own online platforms and have dealers selling their products through online stores. Initially, each manufacturer had approximately 300-400 online stores included in the Price Control monitoring system.

PROBLEM

проблема

Price dumping among 70% of violators for each trademark

Problem #1

After sending violation notifications and conducting phone negotiations with representatives of online stores, we received the following feedback:
“We constantly monitor competitor prices. Our market peers do not maintain price standards, and most of them set dumping prices.”

During conversations and in written correspondence, online stores were mentioned that were not included in the daily price monitoring for the client’s products.

Problem #2

Attempts to bring order resulted in the client’s products being sold on Ukrainian marketplaces and classified ad platforms, which at that time were not under control.

SOLUTION

решение

Comprehensive Measures to Address the Problem

Market Coverage

  • We concluded that bringing order and fully solving the clients’ business challenges is possible only by implementing price parsing across all online stores in the market.
  • We decided to conduct a monthly search for the online presence of the clients’ trademarks and add all identified online stores to the monitoring system for regular tracking of MAP (Minimum Advertised Price) compliance.

RESULT

результат

Achieved Results

    1. Expansion of Monitoring:

      • Over the course of these projects, 500 new sellers per brand were added to the price monitoring system, and this number continues to grow.

    2. Improved Price Compliance:

      • Hotline price comparisons show no more than 2-3 sellers offering prices below MAP, primarily switcher stores.
      • The ability to redirect products to uncontrolled sellers has been significantly curtailed.

    3. Reduced Dumping Attempts:

      • Constant price monitoring and anti-dumping measures have drastically limited attempts to create clone stores and undercut prices.

    4. Promoting Fair Competition:

      • Honest competition was restored, and client products were reintroduced to the inventories of online stores that previously abandoned them due to rampant dumping and unprofitable sales.

    5. Market Dumping Reduction:

      • Real (not reported) dumping across the entire market was reduced to just 7-10%.

    These measures have significantly strengthened market discipline and restored balance, ensuring better conditions for both the client and their partners.

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