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!"

Comments

Re:I don't think this would work in the US

[packeteer]

http://www.improveverywhere.com/mission_view.php?m ission_id=57

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.

Re:I don't think this would work in the US

[DeadChobi]

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.