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

I don't think this would work in the US

[ClamIAm]

If you got a couple hundred people to go down to your local Best Buy, they'd probably call the cops. Even if they didn't, the iron-fisted corporate policies of most retailers would probably preclude getting any kind of deal.

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

[Planesdragon]

If you got a couple hundred people to go down to your local Best Buy, they'd probably call the cops. Even if they didn't, the iron-fisted corporate policies of most retailers would probably preclude getting any kind of deal.

Actually, if you showed up and spoke with the store manager, you'd probably get a deal. Especially if there is another place within a simple travel, and you're organized enough to leave if you don't get the discount.

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

[Anonymous Coward]

If you got a couple hundred people to go down to your local Best Buy, they'd probably call the cops. Even if they didn't, the iron-fisted corporate policies of most retailers would probably preclude getting any kind of deal.

Congratulations, you just discovered the difference between a free market and USA-style capitalism.

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

[Anonymous Coward]

Ever work in retail? Or do math? if 1 person comes in, wants to buy a 100 dollar item, and you have, say, a 25% markup, you're making 25 bucks, right? If 100 people come in, and each want that particular item, but want a 20% discount, you're still making $500 in profit, moving more inventory, and possibly getting a lower cost from the manufacturer if your volume increases enough. While the store would obviously rather make full sticker price, if you don't take their money, someone else who can do math will.

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

[Petrushka]

No, I equate "doing something with the intent of causing confusion" or "doing something unusual as an act of provocation" with "causing trouble".

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

[interiot]

An 80 person coordinated flash mob intending to make the store manager worry about some far-out plots is COMPLETELY different from showing up and offering 80 sales.

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

[Anonymous Coward]

|| Let me guess: you've never run a store have you?

Let me guess: Neither have you?

Large companies using sheer size to compete is against any true capitalists ideal.
Capitalism need competition to work. Badly.
Hence, capitalism needs to be guarded by laws to ensure a free market, and since those laws and their enforcement are lagging all over the world, free markets are scarce. Grandparent was totally right, moron.

Funny thing, my verification text was "subsidy".. :-)

Laws of market.

[Volanin]

No one here disagrees that Tuangou is really a good idea. But due to the way market works, if this trend catches on nationwide, soon there will be a slowly increase in prices, so that the discount they ask for will result in the current prices of today. Buying outside a Tuangou will become quite more expensive and impracticable.

Please, correct me if I am wrong.

Re:Laws of market.

[mochan_s]

No one here disagrees that Tuangou is really a good idea. But due to the way market works, if this trend catches on nationwide, soon there will be a slowly increase in prices, so that the discount they ask for will result in the current prices of today. Buying outside a Tuangou will become quite more expensive and impracticable. Please, correct me if I am wrong.

Isn't that the whole point of the weekly circulars in the US?

You're basically manipulating towards group buy there.

People will buy something on sale even if it's 10 cents off because the sales have those bright red tags below them with the price in BIG font. Otherwise, you have to find the sticker with the price on it and half the time it's not there. The price marker on the bottom is almost always of the wrong product and you have to search like crazy bending down.

Re:Laws of market.

[maggern]

>a slowly increase in prices,

Eh no. There will be a shift in negotiating power, forcing the retailers to lower they're prices whenever a buying-mob knocks on the door. I'm assuming that the buying-mobs are choosing stores that have alternatives (other stores within a few hundred meters).

If a product in in a store has an optimal quality/price which maximaze sales (sold units) that optimal volume will not change if mob-buyers appear. (which will be pretty seldom per store).

Hence:
Regular customer: Regular price
Mob-buyer: Lower prices.(store benefit: larger volumes)

Mob Rules

[Doc Ruby]

All we ever got from our flashmobs in NYC was blowing the "terrorized" mindset with an edgy kumbayah. Meanwhile, Chinese get bargains. Who are capitalists, and who are the brainwashed masses?

Re:hardcore

[__aaclcg7560]

It's body bags when a civilian mob are dealing with the government. However, government officials do give goody bags to each other.

Mafia?

[tepples]

Mob based power has existed throughout history

What are the major differences between short-lived mobs such as these and more permanent mobs such as Cosa Nostra and Yakuza? Can a mob of fair users overpower the MAFIAA?

Re:What if the retailer doesn't play along?

[Anonymous Coward]

I was going to mention the same thing about automotive group buys. I think you answered your own question there actually...

I have seen people who failed to organize a group buy turn on the brand. In said case, more than one company made swaybars. Company 2 was approached, and now they have loyal customers who have a bad experience with company 1 and proceed to spread the news through word of mouth. The overall affect can be huge on a small business. I realize this may not be such a leverage point with Best Buy or a big retailer, but bad PR is bad PR.

Re:Won't happen in North America

[Anonymous Coward]

Where in the US do you pay "too much money for gas"?

mob

[Pliep]

when you are with 500 people, it's a fine line between negotiating and threatening to get a discount.

Or Virginity.....

[Polarism]

zing!

Re:Maybe not news?

[A beautiful mind]

WTF?

Going from a fake-communist society to capitalism is progress? Certainly. Is Capitalism the ideal? Hell no.

The most important progress is capitalism in China? That's the pinnacle of stupidity. Going from a dictatorship to a democracy, that would be progress instead of turning them into a consumer.

Re:Chinese Mass Hysteria

[vadim_t]

Dangerous idea, though.

First, you have a mob of 500 people, which is going to become really nasty if they realize they're being ripped off.

Second, even worse, you have a mob of 500 *connected* people, who if annoyed enough might as well figure out a way of getting revenge.

Does anyone remember Priceline?

[Beryllium Sphere(tm)]

Somewhere in the rubble of the ancient dot-com bubble, there's a company called Priceline which aimed to do the same thing virtually. If memoory serves their idea was to aggregate buyers and contact a merchant to see if they'd meet the desired price.

That's exactly what happens here as well

[melted]

Dell releases coupons with staggering discounts, those coupons go to "deal" sites. "Smart mob" of buyers with coupon codes floods Dell's website and gets their 30-40% off. Regular Joes continue to buy at twice of what they could have paid.

Re:Maybe not news?

[Ohreally_factor]

I've never understood the logic that says when people become happy consumers that FREEDOM and DEMOCRACY are right around the corner. If anything, our experience in the U.S. points to the opposite.

While democracy might give rise to capitalism, it doesn't follow that capitalism will give rise to democracy. The two are not equivalent.

Re:People != Mob

[mgblst]

I was not sure whether or not that comment was actually sarcastic. This is not really power to the people.

Power to the people is changing your government to treat people better (American Civil War, oust Ferdinand Marcus)

Power to the people bringing people back from war (Vietnam war)

Power to the people IS NOT getting a discount on some consumer products.

Is this what we have become?

Re:Maybe not news?

[kalyptein]

I believe the concept is:
  - capitalism arises, people are able to do more than dirt farm and can even pursue their own businesses.
  - wealth builds in the populace, people have more disposable income.
  - as people get used to having some financial freedom and power, they come to desire personal/political freedom and power as well and pressure the government for it.
  - the rulers are pressured on the one hand, but also enriched by taxes from their new, wealthier citizens. If they stamp out the demand, they risk stamping out their own riches, so they grudgingly give way before the demands.
  - Depending on the pre-capitalist powerbase of the elite, they may also find themselves increasingly in debt/dependent on the successful merchants, who eventually just demand access to power on pain of no more loans.