China's younger generation losing interest in bargaining

Updated: 2015-02-02 10:41

By Cindy Chung and Ben Chow(China Daily)

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The difficulty of ordinary buyers getting a full picture of the market at a time when travel was inconvenient, and information spread slowly, added to the information asymmetry.

Afraid of being ripped off by vendors who took advantage of this systemic fault, buyers turned to the old wisdom of bargaining whenever and wherever they could.

The situation improved as of the late 1990s after China increasingly embraced the market economy by eliminating government-set prices on most commodities.

Price differences narrowed among regions and various types of retailers, and consumers had wider access to market information with the popularity of radio, TV and other means of mass communication.

China's entry into the World Trade Organization and the ensuing opening of its retail market earlier this century brought full competition to market participants including producers, wholesalers and retailers.

With supermarkets mushrooming everywhere, where no bargaining is needed, product information can be gained easily.

In 2005, supermarket sales accounted for a quarter of all retail sales. As shopping became as simple as putting products in carts and paying at the cashier, bargaining turned out to be a thing of the past for many.

Nowadays, the popularity of e-commerce has improved pricing transparency to the extreme.

With the click of a mouse, all kinds of information on a product can be found, with users' comments helping new consumers make decisions. With the Internet, it is also easy to compare how a product is priced in China and overseas.

With such transparency, overpricing becomes less frequent and bargaining is not a necessity for shoppers.

In this sense, reduced bargaining activity can be seen as a sign of China's progress toward a more mature economy.

The authors are analysts at Shanghai-based Universal Consultancy. The views do not necessarily reflect those of China Daily.