Silk Market Update
May 15th, 2009
I had asked you to read a post on negotiation and the SIlk Market in Beijing, where I will take you for some shopping. To refresh click HERE.
Check out this excellent NY Times article, Facing Counterfeiting Crackdown, Beijing Vendors Fight Back just published that discusses the legal crackdown at the Silk Market and the creative way in which some of the vendors there are fighting back against the trademark infringement cases that have been filed against them.
Said article nicely highlights the tension between how the West and China approach and differ in some of their views of intellectual property protection, how much of this issue is also tied to history an that portion of my session with you last week on Chinese history (e.g., the Opium Wars, Confucianism, the carving up of China by colonial powers), etc. Said article also highlights why when/if you lecture the Chinese in IP theft and lack of protection, buddy, be careful as you sometimes do so at your own peril!
Other:
By the way, for those of you looking to buy a suit in China at the Silk Market in Beijing (see my earlier post Lessons On Negotiating (The Ultimate Sport), In Asia), see this short YouTube VIDEO I recently came across on this very topic. I think it’s pretty well done and fairly accurate. Keep in mind, though, that the prices you will see in this video are lower for a number of reasons. E.g., he came back 10 days later to pick up his suit and did not need it the next day, he also went into a local neighborhood (in this case in Shanghai) that many Westerners would not feel comfortable going into to buy his suit, note his language skills and I assume he was/is a repeat customer for this tailor, etc. As you are MBA students, you recognize and appreciate the impact said variables can have on price.
Entry Filed under: Pre-Departure, Beijing, China
7 Comments Add your own
1. Mark Wegemer | May 19th, 2009 at 9:46 pm
I have to say that I’m extremely excited to get to see this Silk Market with my own eyes. I have seen the videos and the extensive debating of prices that goes on and it seems like a very intense atmosphere. I am truly going to enjoy going here and testing my skills as a haggler.
As far as the suit purchase is concerned, this gentleman has definitely done this before. His skills to get the best price are from experience rather than the skills of bargaining. I truly admire his knowledge and hopefully I can get a suit at a decent price. Do you think I can break his cost? I doubt it, but it doesn’t hurt to try.
2. David Caldwell | May 20th, 2009 at 1:11 pm
After watching this video, I started kicking myself in the butt for having a few suits taken in to be tailored here in the US. It cost just about as much to have them worked on as it did to buy them in the first place, which was double or triple what this guy was getting a complete (and tailored) suit for in China.
This morning, I got to talking with Chris White, who told me a bit more about his experience on last year’s trip, and he asked me why I didn’t just wait until we were in China to have them worked on - after all, if they can make a suit from scratch, a little hemming should be child’s play.
So, I went back to the place to pick up my suits - thankfully, they hadn’t done any work on them yet, so now I can stuff them in the bottom of my suitcase to have them worked on in Shanghai!
3. Eric White | May 27th, 2009 at 10:21 pm
Hmm.. David maybe you could have them done in India so you’ll be able to have them for more of the trip. When I was in a store the other day I went to check out the suits just to see where they were being made and I was surprised to see more and more have been sourced from India.
I will be buying 2 maybe 3 suits in China just because of the fact that I cant get one off the shelf here (nothing off the rack will ever fit me! In fact I’m forced to buy even shoes online because retailers do not carry my size typically). In any case, learning from David’s case of buying expensive suits just to pay an arm and a leg to get them adjusted to fit is crazy. Instead, I think I’ll take the opportunity to buy 2-3 when we are in China for probably under the price of 1 here in the states. At any rate, the suits will probably be my souvenirs for the trip!
I know several other people are planning on having suits made and like Dr. Carr points out, the sellers have the power in this situation because we are likely one time customers, we cant speak the language, and we are plain “stupid Americans” who dont know any better. The one thing we do have is volume! If we can give a tailor 5-10 suits worth of business hopefully we will see some reductions in price!
4. Matt Eves | May 30th, 2009 at 10:56 am
Looks like the Vendors are back, striking again! I remember the previous post on this topic and thought it would be an interesting fight between the vendors and legal enforcement. It is still a complicated issue but this time reading it through I had feelings of support for those filing suits against the vendors. If it is established as an illegal act, than the argument of the vendors saying “We want to eat!” is not all that convincing to me. I can see that they depend on this income for their survival but they are skilled enough to run a small business - they just need to operate legally. Take their argument further and it makes no sense.
As for the Youtube video about getting a suit… I am jealous of that guy! What a deal! Speaking Chinese and knowing your way around a bit obviously made a difference but I think it is amazing what you can get for so little money. I am further amazed at the skill of the tailor - who offers his services at such a great price. He can copy any suit in a magazine… I’m impressed and look forward to this part of the trip.
5. Matthew Neal | June 11th, 2009 at 11:23 am
I am continually amazed at the low prices available in these stores. I am definitely looking forward to purchasing a suit over there, assuming of course i have any money left over at that point. Also, I think it would be an awesome idea to get a big group of people together when we make the suit purchases and take advantage of a “group discount”. In addition this will hopefully give us more leverage as we are negotiating prices.
The issue of the copyright infringements has always been interesting to me. The one thing i find really interesting is the vendors that are trying to defending themselves, claiming that they have done nothing wrong. It is just yet another example of how cultural differences have such a big impact on business practices and procedures. I agree with the article that China will soon move from a creating to a designing economy and when that happens, there will not be near as much of an issue with copyright infringements. The key to solving the copyright issue is getting countries to a point where they create their own designs and creations and therefore start to put a lot of value on protecting their own products instead of others. Once they need to protect their own ideas they will take copyright laws a lot more seriously.
6. Ashley Breneman | June 11th, 2009 at 7:44 pm
I am definitely really excited about going to the silk market. I don’t agree with the Chinese vendors when they say they don’t know what the labels are. I know that statement was just to protect them, but it also discredits their intelligence and street savviness. Obviously the fact that these labels are largely popular is the reason they have to hide them in cupboards to begin with.
As far as the 5 major companies getting worked up about intellectual property rights, it seems a little ridiculous. I understand that this is their business, but are they not getting enough sales? I mean how much of their sales are really being lost to the silk market? Besides, it seems these companies will do everything they can to exploit the cheap wages that can be found by manufacturing these bags in China, but they are not willing to accept the negative consequences that can arise from doing so. It is no surprise to anyone today that the Chinese people are hungry for money and will do anything to make profit. To be honest, I think some of the prices these companies are charging for purses are outrageous, and I plan on buying a good fake one at the silk market. I realize this can be ethically wrong, but I really don’t think the items being sold at the silk market are taking away from their profit margin because the people who are buying the items know they are fake. Therefore, the target customers would not be willing to be the regular price for the real deal. Good for the vendors for protesting to keep their livelihood!
7. Alex vanDalen | June 12th, 2009 at 2:28 pm
So i’ve heard that the silk market employee speak on average about six languages well enough to conduct business in. To me this means that even as the “cheap prices” they charge tourists and pink people from around the globe, the businesses must be making quite a good deal of money justify employing such skilled labor in their operations.
In light of the profits that must roll in from this tourist attraction (i’m told beijing people do not under any circumstance shop here as it expensive and not in vogue) i cannot imagine that any crackdown on the markets would last. There was similar situation in Hong Kong with stores that sell pirate CDs and DVDs.
The solution to the problem was very Chinese : The police conducted raids on a regular basis looking for pirate materials. They did however give shop owners who were in “good standing” with the police regular notice about the scheduled times of these raids. Thus it wouldn’t not be uncommon sight in the middle of the shopping day for all the store on a street to close for 15 -20 mins during the “raid” and promptly reopen once the police were gone. This happened to me in Hong Kong while I was there. With what seemed like no warning all of the shop owners on the street simultaneously pulled down the security doors in front of the stalls and we were locked in the shop for 10 mins while the police walked by on their scheduled rounds. Once they were gone it was business as usual and we even got a free DVD for our troubles. I wouldn’t be surprised to find a similar solution imposed on the counterfeiting at the silk market.
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