Deal or No Deal: Bargaining in Shanghai

Mar 28, 2017 8:30:00 AM / by Julie Ritz

CAPA_DanielleThai_Blogger_Shanghai.pngDanielle Thai is an official CAPA blogger for spring 2017, sharing her story in weekly posts on CAPA World. A resource economics major at the University of Massachusetts Amherst, she is studying abroad in Shanghai this semester.

In this week's post, Danielle discusses a cultural difference in China, bargaining, and how she's become accustomed to it. 

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The fake market is unlike any place I have seen or heard of. The stores are identical in terms of size and layout. It reminds me of a flea market; the products are laid out on a table or displayed on the wall. Another key defining feature is the prices of these items are not clearly labeled. On the ones that have tags, the prices are much higher than what the sellers say the price is. With the prices labeled, it messes with what a person expects to pay for the item. The most counterfeited products are bags, sunglasses, watches, strings of pearls, and jade-looking items. In these places prices are suggestions and are inflated at high rates. The sellers play off the products as being authentic and try to make the customer believe that they are getting an amazing deal. Most people who visit these kinds of markets know that the products that are counterfeited so they do not buy into what the sellers try to tell them.

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The business models these sellers use is bartering and adding on to the purchase. If a customer is willing to buy a lot, the seller will want to make the sale so they are willing to take the time to negotiate. A huge indication that the sellers are willing to budge significantly on the price is if they bring out the calculator and asks the customer what price they are willing to pay. Someone can bring the prices down at least sixty percent from the original asking price. At the end of the day the sellers just want to make money so they will continue to negotiate the price until both parties can agree. When bartering with them they will always say the price the customer gives is too low; all they want is for the customer to increase their bid. When the price is not agreeable with the customer, the customer will walk away and the seller will continue to yell down the hall to get the sale. More often than not the seller will lower their prices.

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In the beginning, I felt uncomfortable bargaining. Coming from the United States where bartering is uncommon and looked down upon when someone tries to get an item for cheaper makes it hard to break out of the habit. Unless the place is an actual store with tags on the products, prices are negotiable. So far my favorite thing to do here is bargaining. It is thrilling to name your price and see how low you can get the item for. To get the prices at a low price takes a lot of time and occasionally the sellers get annoyed but that is all part of the business. I have been told that I am a good bargainer. One of the seller’s exact words was, “beautiful girl, hard bargainer”. Now my friends make me barter for them. I get energized off getting a good deal for items and am ready to go talk to the next vendors. 

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Counterfeited products are popular in developing countries because the items that are being sold are well-known brands. Possessing a designer item indicates a person’s status. There is a saying, “Fake it until you make it”. People pretend to be a better version of themselves to get noticed. In terms of the fake market, people purchase these luxury items at cheap prices so they can fit in with society. When owning something that is rare or of high-status it gives a person a feeling of power – even if it is fake.

Until next time,
Danielle

Thanks Danielle!

Danielle's journey continues every Tuesday so stay tuned!

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Topics: Shanghai, China, Cultural Insights