Monday, May 15, 2006

Capitalist tales and consumer success.

Capitalism has come to China and everyone knows it. The country is booming and has some of the highest growth rates in the world. Incomes are rising, poverty is declining and the lives of working people is improving faster than any time in Chinese history. And now Chineses consumers have spendable income. And they are on a buying spree.

But as the Christian Science Monitor reports the Chinese have innovated a new way to buy. It tells the story of one consumer, Fiona Li, who was helping her brother buy things for his new apartment. She did some on-line research and then noted a location and a time. She and her brother then joined the newest fashion in consumer spending: team buying.

The idea is simple and innovative. Consumers in an area like Beijing for instance, who are all looking to buy a specific product get in contact with each other via a team buying website. In some cases they just all show up at the same time and tell the manager that each of them will buy a product provided they are given a discount. While one wouldn't have much bargaining power when a couple of dozen potential customers all want the same discount at the same time, or they walk, the shop keeper gives it a second thought.

In other cases the deals are worked out in advance by the team buying website. One such excursion was reported on. In this case the website brought a couple of dozen people to one camera store where they had already negotiated a discount on the camera, a free tripod and free extra memory for the camera. The organizers also take a commission for their work. The internet has changed the way the world does business and team buying, if it catches on elsewhere, may well be another revoluntionary change.