Institute For The Future

Asia: Chinese Consumer Collectives

The emergence of the Chinese middle-class is changing the world. The next ten years will see the growing impact of a distinctly Chinese form of Consumer culture—new kinds of urban buying collectives, rooted in China’s socialist legacy and enabled by communications technologies. Serving there new consumer collectives will require distinctly new strategies in product development, marketing, the retail experience, and customer service.

Until the 1990s urban Chinese life was structured through the “work unit,” or danwei, which provided employment, health care, housing, and leisure activities. The role of the danwei has been sharply decreasing since the 1990s. Today, housing, employment, and health care are privatizing, and people are responsible for creating their own paths. However, given the relatively recent transition away from the danwei, it is no wonder that Chinese Consumers are organizing into buying teams that leverage the power of the group.

Tuangou refers to teams of buyers who negotiate with retailers and manufacturers for lower prices. Tuangou are organized online and range from ad hoc to highly planned. These groups began in Internet chat rooms, where first-time homeowners figured out how to turn a concrete shell of a Chinese apartment into a finished home. The rise of tuangou teams has been embraced by some Chinese businesses and shunned by others. Some retail chains have staff responsible for hosting tuangou groups.

Over the next decade, tuangou consumerism will expand to a wider range of institutions, such as enterprises and even gated residential communities. Read more in the 2007 TYF perspective Asia: Chinese Consumer Collectives. The perspective includes 4 scenarious of what tuangou might look like in 2017. IFTF’s Research Director interviews Sam Flemming, founder and CEO of CIC Data, a Chinese based Internet word-of-mouth and competitive intelligence research company.

Hand in Hand (a song from the tuangou Web site Wangqun)

 

You, an individual, meet a stranger, through me

Countless yous, mes, and thems join together

Browsing, consulting, choosing, bargaining . . .

Everyone helping one another

We are shy no longer

We shop for the best bargains

We buy with flair

We are jumbo consumers

The fanciest stores meet us on equal terms . . .

. . . Tuangou is power, netcrowrds are the bridge