Bargaining culture in China: how does it affect online buying?

It's no secret that bargaining is important in Chinese culture. Haggling over prices is not all about the money. It's mostly being used to create trust and a connection between the buyer and the seller. That this process should not be underestimated shows by the fact that some critics blame the failure of Best Buy in China on the fact that bargaining was not an option in their stores. 

Best Buy, a big US retail chain went to expand their branch to China and used exactly the same concept as they use in the US. ''We offer the Best Buy, and our list price is our lowest price.'' No bargaining needed because it's already at the lowest price. Best Buy didn't understand that it was now missing an import aspect of the purchasing process in China, regardless of the price tag. Their approach just didn't offer offering the full purchasing experience and caused them to fail.

A good example of how far this culture goes is Taobao.com, China's largest online marketplace. One of the most popular features on here is the option for buyers and seller to connect and chat. This function is giving a platform to re-create the traditional bargaining process and makes sure the buyer and seller can bound and create trust before the purchase happens.

Negotiating over prices basically happens when the same product is available at different independent sellers like on markets or small stores. Usually the buyer is not having a preference for one seller/brand yet so the only important thing would be, the price!

 But there is a change happening and tradition might be outrun by ease. The new wealthier middle class doesn't  want to waste time negotiating and fears to over-pay as a result. They usually already know what item or brand they want and there is no need to play out time consuming routines. Think of products like Apple, Luxury watches and jewellery like Rolex, Omega and Cartier and designer clothing like Burberry, Dior etc. The exclusivity of those items is also making a bargain impossible.

My conclusion is that the required bargaining is often more trouble than pleasure for the younger and wealthier generation, because they just don't have time for the hassle. They know what they want and want it easy and fast. This younger group might cause a change in the buying process of Chinese consumers, although at the moment that younger wealthier generation is still a small part of society. The larger part still wants their bargaining  and Best Buy and their concept of 'list price is lowest price' might just have arrived a bit too early.