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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!"
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.
Sounds interesting but what if you don't get the discount you want? Or maybe the reatiler doesn't gove you a discount at all?
Potentially you just wasted a byunch of peoples time, and probably a lot of the people who showed up would buy without the discount anyways since they are already there cash in hand.
Of course that would be the last time that particular retailer was approached.
In the car tuning scene "group buys" have been commion for years, though they generally don't involve people personally showing up anywhere or have anywhere close to this scale.
I must be tired I saw body bags instead of goody bags that would be some hardcore negotiations.
TheADDkid.com
Actually, "power to the mob" may be a better description. Mob based power has existed throughout history, and it usually has not been pretty. Furthermore, if you're an individual (in the true sense of the term) who does not enjoy associating with the mob, you tend to be screwed over by those who do. Food for thought.
Uttering logically derived and empirically supported truths to the disciples of the orthodox establishment.
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.
If I clone myself, can I call it a thread?
If a girl winks to us, can I call it a race condition?
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?
--
make install -not war
On, second though, I live in Norway where everything is ridioilously expensive. so the I think the answer is something like 'Spend all winter getting drunk wondering why there's only 2-3 hours between sunset and dawn, and subsequently spend all summer being happy and getting drunk while being mildly amusing at the strange shiny thing in the middle of the sky which never seem to disappear..'
"" How about taking the safety labels off everything, and let the stupidity-problem solve itself? """
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?
Who wants to mob up on an NYC Apple store to see if they're give us a massive discount? Please leave stones at home since we don't want to break the glass house.
but mob shopping is old news in brasil. usually it involves closelly related ppl, like a large familly or employees of the same company banding togheter to buy goods in bulk.
the most common itens are "back to school" goods, such as notepads, pens and stuff like that.
What ? Me, worry ?
The People's Glorious Struggle Against the Opressive Running Dog Capitalists Bargain Barn offers 25% OFF to YOU AND EVERYBODY IN YOUR CADRE!!! So stop on by TODAY!!!
* * * * * * *
So, this capitalist lackey and his bourgeoisie imperialist masters walk into this bar looking to oppress the proletariat, see, and there's a frog on this one guy's head, see? And the bartender says, "Hey...what the heck is THAT?!" And the frog replies, "Well, it started as a wart on my ass..."
--Comrade Henny Youngman
I don't know how big standardized retailers work in China; I only shopped at one in Xian when I was there. But everywhere else, you're expected to bargain like crazy if you want to buy almost anything. Price cuts of up to 7/8 aren't uncommon. It takes tourists a while to catch on (it took us several days, not having a local guide), but after a while you get in the habit of just saying, "No, I don't want that", until the price gets haggled down by 50% maybe twice, maybe three times. I'm not terribly surprised to see this happening on a larger scale.
Isn't it the case that when someone hears about a new mob that is going for discounts for stuff this person doesn't even need, (s)he is more likely to join just because of a perceived advantage? It is strange, on one hand people seem to be cheap, on the other hand I am sure many of them end up spending money on things they don't really need.
I buy very few things. My appartment has one bed, 3 chairs (a gift, I didn't buy those,) a notebook computer, an old filing cabinet (another gift,) a couple of kettles, a frying pan, a steaming pot, some drinking glasses, an oscilloscope, a 3 way power transformer, a digital CPU programmer, an unfinished 3D printer, a few small tools, a VEX robot set with some addons, some clothing, a vacuum cleaner and a few normal household appliences (washer/dryer/fridge/stove/microwave oven/dishwasher.) That is it. I probably should get a sofa, but I am reluctant, I am thinking about building my own table, I havea built in bar-table. I've been living this way for the past 3 years and I think I have a little too much stuff. A buying mob like this would not interest me unless I could get ridiculous discounts, like really ridiculous, like 90% off, and I don't buy cheap stuff (as strange as it sounds,) everything I do own is quite expensive and of good quality.
You can't handle the truth.
Yes, BestBuy tends to ignore their customers unless you come in for one very specific thing because you need it about an hour ago so you can't wait for delivery from an online retailer. In this case, you have blue shirts swarming around you trying to upsell you on everything.
The fact that I dress fairly nicely most of the time just seems to scream "comission" at them.
"I need it right now" is about the only reason I ever go there. The other reason is the occasional loss leader like burnable media priced cheaper than I can get it anywhere else.
Everything I need to know I learned by killing smart people and eating their brains.
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.
MikMik Baby Organics Mikkaworks
Where in the US do you pay "too much money for gas"?
when you are with 500 people, it's a fine line between negotiating and threatening to get a discount.
This sounds more like a case of Chinese mass hysteria and a spin on a very common scam used by confidence tricksters and indeed marketers everwhere. Ok you are a retailer, you get someone skilled in the art to arange for 500 people to "flashmob" your store then you sell them loads of crap at the usual discount you give to everyone else - oh just be chance you have a few goody bags on hand. If I was ordering in quantities of 500 I would expect big discounts.
It works because people are happy to part with money when they see their peers doing likewise and they hate to pass up a bargain.
Trust the Economist to be taken in by it - but then they believed in that Enron really was a new business model based on the lightweight economy.
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)
zing!
All your base are belong to Google.
...they used the word fortnight in the article. And that's just awesome.
What?
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.
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.
At a gas station! Duh!
Haida Manga
Ahh yes, I remember buying a Palm IIIx organizer through Mobshop around 1998. It was as cheap as any other site, and if I could just get 7 friends to buy one, the price would drop an additional $3.74. They even offered to spam my friends for me. This of course is a recipe for having 7 fewer friends.
Mobshop were so pathetically grateful for my business they sent me Christmas cards and swag until they folded. Not a sustainable business model.
Before Amazon and eBay dominated, there were lots of alternative approaches to selling bulk lots of goods on the Internet; for example OnSale.com tried Dutch auctions, reverse auctions, etc. Slate has a good article on the economic theory behind it all.
The problem with such bulk schemes is everyone involved is gambling that somewhere in the supply chain there's a warehouse overstocked with goods, i.e. that distribution is inefficient. I think the real power of such auctions is only apparent when manufacturers sell direct. They reap the most benefit from economies of scale and tailoring production to demand. Imagine if Amazon was just a showroom for purchases built-to-order and shipped directly from the manufacturer. You'd buy an organizer through Amazon for $150 with a firm shipping date from the manufacturer, and a promise that if more people order before then, your price will go down. To motivate you further, Amazon could provide you a spiff code such that if family and friends bought more, you'd get a share in Amazon's slight commission.
ShowroomShipDirect, TailoredLeanProduction, and PSC (Personal Spiff Code) are all © skierpage, contact me for licensing.
=S
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.
PRINT ""+-0
That's because there are at least 501 people who are willing to pay full (or double) price for a Cabbage Patch kid (well, in the 1980's...)
If you have items that are NOT in absurd demand - items that don't fly off the shelves - this makes sense. But for an item that is hugely understocked, no, you won't get people negotiating a discount, you'd get people outbidding each other.
Supply and demand.
Since I can't tell them apart, I treat all ACs as the same person.
You've mis-read it. One guy had bought a TV _for_ his new apartment. As in, he had just bought a home from somewhere else, and then discovered that he also needs a TV, furniture, etc. So he joined such a group and bought them at wholesale prices.
As for what you could buy in the USA that way, well, I don't know about the USA, but here in Germany most retailers have pretty large margins on anything. Just look on how much they can cut the prices periodically on some stuff, for no other reason than the doctrine that people coming to buy that will also buy something else.
In part that extra money goes on "shelf space" and the like. I.e., it costs you money in rent and salaries to keep something on the shelves or in the warehouse for months. You can also calculate a sort of a cost for slow selling products in money lost by not stocking something else that sells faster.
So I don't know if showing up unexpected would work, but if you called in advance only a complete PHB would refuse to give you a 10% wholesale discount on something that they marked up by 50%. It's a lot of profit in a burst, and if he's smart he'll realize that it's 100% profit. At that large size of an order you could have contacted the wholesaler directly instead, and bypassed the retailer completely. E.g., if you wanted to buy 100 kitchen furniture sets, like in the article, you could probably have contacted Ikea directly instead and taken it at their wholesale prices.
But at the very least it's stuff which:
A) otherwise would cost him shelf space for months or even sit on the shelf until it's outdated. Such a burst sale is pretty much as good as selling it directly from the truck.
B) otherwise would have been spread between him and all the competition. E.g., here if you wanted to buy a TV, you can go to Saturn, Media Markt, Pro Markt, or a dozen others, and that's not even counting the hundreds of online shops. Heck, you can get a TV from Aldi, which is mostly a cheap grocery store chain. So 500 people coming together to buy from, say, Saturn are better than 50 coming to Saturn and 450 going to buy from somewhere else, which is what would realistically happen otherwise. Selling at half the profit margin, but to 10 times more people, can be pretty good business. (After all, Aldi built a retail empire on that doctrine.)
Of course, I've never heard of people doing that here, but I have a strong suspicion that it would work if anyone tried.
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