Core Insights - The significant price difference between online and offline milk sales is attributed to various factors, including operational costs, competition, and product differentiation strategies by manufacturers [1][3][6] Market Environment - The online shopping market in China has seen substantial growth, with online retail sales reaching 13.08 trillion yuan in 2021, a year-on-year increase of over 14% [1] - The production of liquid milk in China reached 28.42 million tons in 2021, growing by over 9.6% year-on-year, reflecting the increasing consumer preference for dairy products due to their health benefits [1] Operational Costs - High operational costs for physical stores, including rent, employee salaries, and utility expenses, contribute to higher prices for milk in these outlets [3] - E-commerce platforms benefit from lower operational costs as they do not incur high rental expenses, allowing them to offer lower prices [3] Competition Dynamics - Intense competition among e-commerce platforms drives down milk prices, as they adopt a low-margin, high-volume sales strategy to attract consumers [5] - Physical stores have a more stable sales volume concentrated in local communities, which reduces their incentive to lower prices [5] Product Differentiation - Manufacturers may offer different versions of products for online and offline channels, with higher quality and better packaging for physical stores, while online products may have cost-cutting adjustments in materials and packaging [6]