TEAM BUYING – a clever concept but would it work here?
Yip, you know that CHINA is the ultimate shopping destination – bargain central and electronics to die for dahl…. But it seems that the Chinese are not happy with
just accepting the prices offered to them by store holders… they have come up with a brilliant concept called tuangou which basically means GROUP SHOPPING.
What is group shopping? Well it’s exactly that, using th…
e collective to buy in bulk from a shop and demanding a discount for that bulk purchase.
To explain it in our context… think of it this way… you’ve seen all the complexes springing up in the Fourways area for example… obviously a lot of those complexes will be filled with first-time home buyers and renters who have left a home environment or a digs and need to set up their own house. Now picture this – you need a couch, a washing machine and a fridge. So do another ten people moving into the complex, so you all get together and go shopping as a team.. You walk into Game or Dions or wherever and find the products you all want and are happy to purchase together, so you call the manager of the shop and ask that he gives you all a 20% discount on the starting price of the goods as you are buying in bulk. He of course is not going to say no as your group could represent what he sells in a few days… so he barters and negotiates and wraps up the deal at 15% – you all leave feeling very chuffed with your purchase. He’s happy as he’s made his weeks target in a day.
While that example may seem simple, we think that making GROUP SHOPPING happen in South Africa would be a challenge. Our first problem is that we are riddled with ‘big name brand’ stores… the culture of smaller shops is nowhere near that of the East. It is a sad fact. If you want to buy clothes you are usually restricted to your Edgars, Truworths, Foshini, Mr Price et al… the smaller boutiques are usually more pricey or full of junk… On that note we really have to encourage small business to multuply so we can break out of that whole MALL mentality and so we aren’t constantly restricted to a handful of big name shops.
Ok there are lots of MALLS in Asia, but they are made up of hundreds of small shops that sell a myriad of products all at affordable prices… because there are so many small shops the selection is so much greater. Malls will be the death of us. We hate Malls. NO MORE MALLS.
So that would be our first challenge, the fact that you couldn’t just walk into a GAME or DION and ask them for a discount as they would probably have to contact their regional manager who is in Cape Town or something ridiculous. Then the second challenge would be INTERNET access – the initial set up of the groups is all done through Internet sites in China. Kind of like dating sites that match people looking for the same products together. We are way behind when it comes to INTERNET access. Put it this way, the entire city of Hong Kong is a hot spot – that means that anyone with a computer with wireless capability can tap into the networks either for free or for very low cost. So there is a much more prolific internet culture and confidence. People trust the internet and trust its offerings. In South Africa we tend to be nervous of any transaction that does not involve flesh and faces.
Then there’s our biggest problem of the rich getting richer and the poor poorer… if only our mass or poor people could be considering going shopping for the most basic of accessories in the western world – a new fridge. We are so far away from the wealth and opportunities spreading down to the masses that this concept will just not work.
Not to mention the problem of our CBD [we refer to Joburg here]- or rather – the still growing CBD. Our shopping centres are so spread out that there is not one distinct huge shopping area. And I am not talking about Sandton Centre… I am talking about 20 Sandton centres all within a kilometre of each other.. that’s what you get in Asia. So when I set up a website I know that we all shop in the same area… we travel there on very efficient and affordable and safe transport from wherever we live in the city and we meet at the “electronics” hub where we move from shop to shop looking for the best deal. South African business owners seem to be very nervous of competition. Competition is a good thing. It keeps you on your toes and spreads the love.
Anyway, we could go on, but those reasons highlighted above are just some of the reasons why we think that this concept would not work in South Africa – yet. Anyone disagree? Come on, start one up! Don’t forget to credit us for sharing the idea with you. By the way we don’t mean to be negative – you know we love this place – we’re just being realistic. Sorry to break the news but we are WAY behind the East.
Here is more on the concept from the Christian Science Monitor – click here for the full article:
China’s newest shopping craze: ‘team buying’
More and more consumers meet online before banding together at stores to bargain down prices.
By Simon Montlake | Correspondent of The Christian Science Monitor
GUANGZHOU, CHINA – Last month, Fiona Li did what millions of Chinese shoppers do to find a bargain: she went online.
A few clicks later, she had a lead on where to buy the consumer goodies her brother wanted for his new apartment. Instead of reaching for her credit card, though, she jotted down a time and a place: 8 p.m. at a downtown electronics store.
That evening, Ms. Li and her brother joined 15 strangers at the store to demand a group discount on a new television, refrigerator, and washing machine. Salespeople grumbled at the tactic, but the group refused to buckle. After two hours of haggling, and several walkouts by group members, the store manager agreed to a 10 percent markdown on the three items.
Li, a marketing assistant, went home with a smile on her face. “We wanted to save money, and finally we did it,” she says. “It’s in our nature, whether we’re rich or poor, and if we can save money this way, why not?”
Welcome to China’s newest shopping craze, tuangou, or team buying. By combining the power of the Internet to compare prices with the stealth tactics of the flash mob, team buyers are driving hard bargains in the world’s hottest economy. Dozens of team-buying websites have sprung up to catch the trend, which first began in online forums and chat rooms.
Typically, shoppers looking for the same items find each other online, then band together offline to negotiate special deals on electronics, home furnishings, and automobiles. Some team buyers approach store managers beforehand, others simply show up and flex their collective muscle.
Bargaining is a way of life in China. Shoppers treat sticker prices as a starting point for negotiations, and it’s a point of pride to strike a tough bargain or walk away if unhappy.
This habit of face-to-face haggling is one reason why regular online shopping is only slowly catching on in China, which has more than 110 million Internet users, second only to the US. E-commerce was worth around $1 billion in 2005, according to Beijing-based research company iResearch. Many shoppers, though, prefer cash-on-delivery or checks to online payment systems, and credit cards aren’t widely used. [click for more]
