Surprises in the Emerging Chinese Consumer Market highlights the Internet-powered practice of consumer collaboration and group buying for discounts.
“Chinese Consumers Overwhelm Retailers with Team Tactics,” The Wall Street Journal, February 28, 2006 is a perfect example of how mature market assumptions can lead to surprises in emerging markets. Chinese consumers increasingly meet on the Internet chat rooms to plan and coordinate a group buying strategy for a type of good or even brand. Then they go to the retailer as a group to extract significant group discounts. This practice is known as tuangou, or team purchase, and can play havoc with companies’ pricing strategies and margins, to say the least.
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Last night I attended TiE Chicago’s “The Great Chicago Tech Debate,” which turned out to be a rousing panel discussion (no, that’s not necessarily an oxymoron 😉 replete with insights. As it was my first TiE (The Indus Entrepreneur) event, I enjoyed taking an informal survey of members afterwards, and everyone I spoke with found it extremely valuable (not awfully surprising, but still..). TiE, which was founded in The Valley and has chapters globally, is a network to support entrepreneurs. As its name suggests, many of its leaders originally hail from India, and many have founded, led or helped to launch successful start-ups that have leveraged offshore partners in India.
Although the setting of this tale is Chicago, its lessons will apply to many other cities, provinces or countries that find themselves in a global knowledge economy, with the need to form a vision to galvanize their citizens to make changes in order to succeed in the new environment. Two of the main challenges are: making the shift from the industrial economy to the knowledge economy and the need to differentiate to compete. “Technology” plays a supporting role, which we’ll discuss more in a minute. After some observations on the […]
Innovation
I had the privilege of hearing Larry Keeley, Co-founder of Doblin, the innovation strategy firm, at the GCB Innovation Round Table last night. He painted a vivid picture of the white water global economy in which we find ourselves as a context for his talk on innovation. In brief, the degree of uncertainty and change has created a “nervous time” for corporate executives. The pace of change is probably unprecedented in the experience of the human race (my take on this below). He implied that the anxiety around terrorism is amplifying this underlying general nervousness:
We face a high degree of ambiguity on political, economic and societal levels. People hate ambiguity. Complexity has two meanings: things are difficult to understand and we cannot know the outcome of our actions (because there are too many inter-related concepts, dependencies and data for us to comprehend). People find this overwhelming. Volatility of markets; Wall Street (fill in the blank for other markets) punishes executives for vagaries in the numbers, which has led to a legendary “make the numbers at any cost” attitude. People find this mystifying and unsettling because it constantly produces nonsensical behavior.
If we define innovation as measured risk-taking and […]
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