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Smart Mob in China for Retailer Discount
taweili writes "The Economist has a story about Tuangou in China. Tuangou, roughly translated into group purchasing, is basically a smart mob who arrange the meet up over the internet and show up at a retailer at a specific time and use their number to negotiate a discount with the retailer. In the story, a Tuangou group of 500 show up in Gomei (largest home electronic retailer in China) at 4pm on June 16th and negotiate a 10 ~ 30% discount for the group. Gomei not only closed the door to the normal customers but also prepared goody bags for these Tuangou shoppers. Now, that's Power to the People!"
LetsBuyIt.com is such an entity.
visit them here: http://www.gome.com.cn/ and as far as i could tell they are pretty expensive so I can see why they need mob.
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In North America, 500 people will show up when Cabbage Patch dolls are released, and WANT to pay $60 a pop for them, and will kill each other over them to boot. You couldn't get 500 people in North America to agree on what color the sky is, let alone coordinate enough to get a discount on something they will pay double to get anyways.
Lets put it this day, how many people show up at a gas station and happily pay way too much money for gas.
We make too much money in North America, which is why while individually we may gripe about the cost of something, we will never coordinate to get a discount because we are too bitter, proud and stupid to want our neighbours to get a discount on it too.
I haven't thought of anything clever to put here, but then again most of you haven't either.
Things like Pipeline Card come to mind where by banding together theyre trying to negotiate better deals through collective buying power, and various proffesional bodies are able to negotiate discounts on other products (The Pipeline example is fuel)
Winth americans, yes you are correct. That would happen.
Most other countries the people tend to be much more savvy at dealing with stores. Buying the retail price is not the norm anywhere outside the USA. I even will not buy at the sticker price anywhere, I ask for a discount at all stores I go to for larger items, this is ci=onsidered extremely odd behaivoir in the USA but is considered normal everywhere else.
American tourists are always welcomed with smiles at forign shops as the shop owner knows that most are not smart enough to haggle and therefore make huge profits off them.
The worst part, Americans will buy a car or home without haggling or negotiating. Come on people, that car can move by $500.00 without effort and homes can move by $5000 to $20,000 in todays market. (except for lunatic places like california or DC where idiots bid UP on the homes.)
Do not look at laser with remaining good eye.
With that many people, why did they want to get a retail discount? I would have found the wholesalers and drummed them up for one.... or better still, used the people to form a company!
READY.
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Looks like someone wasn't paying attention in Econ 101. The way market works is that people sell at exactly the price they feel "is worth it". Buying in bulk is cheaper because it is ECONOMICALLY CHEAPER. Selling individual items requires that every item be stocked, tagged, picked up by a customer, scanned and ringed up at the register, and paid for in usually small transactions. Buying N items in bulk means N-1 transactions, N-1 time saved at the cashier's, a good deal less time spent stocking, less risk per item, etc. You don't throw out the middleman, but you throw out a ton of "middleman-age".
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It has already been done, sort of, with Best Buy. They were not there to negotiate a deal but amny people went to a Best buy and sure enough the cops were called.
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It's not 500 of one item. For example, if this happened at a neighborhood Best Buy, it would be 500 people buying huge quantities of various items. Maybe 10 people are in to buy a refrigerator and a washer/dryer. Another 100 are going through CDs and DVDs, and might buy a new laptop. Still another 250 are looking thorugh the home theatre section. It's a lot easier to make money when you know you've got guarenteed customers. If you plan it in advance, and the store owner is in on it, he might be able to stock up if all of you wanted one specific item, but the impression I get is that that is not what is happening. It's not like 500 people standing in line for a release of something.
Discount sales only exist for one reason: to drum up business. Retailers attract you by making everything cheaper, you buy more stuff, their margin stays the same, and they've attracted some new customers. That's all the game is. This tactic in China only gives some of the power to the consumer.
And a negotiation group such as you've mentioned would be beneficial to the consumer as well as to the retailer, by ensuring steady business for the latter and volume-level discounts for the former.
SRSLY.
That is a different situation, though: those people went to that Best Buy with the sole and specific intention of causing trouble, not to buy things.
Ah, I see you equate "not purchasing something" with "causing trouble."
As I recall, the specific instructions the group had were to dress up like best buy employees, head to different departments in the store, and try their best to answer if a customer asked them something.