TripDingo

Now this is interesting. As TechCrunch describes it, ShangBy.com is an internet startup company that ghetto-rigs meshes several different business ideas into one, ostensibly with enough success to get it featured by Racheal Ray on her cooking show (which none of you Chinese readers will likely be familiar with).

First, there’s the bargain or comparison shopping component, tied to the popular notion that purchasing from the “source” where something is “made” in some far-off place in the “Orient”  is probably cheaper.  Second, there’s the traditional home shopping compoent. Couch potatoes, with nothing better to do and too lazy to even window-shop with their own two feet, once sat in front of the television staring at the mind-numbing, spirit-crushing constant stream of products waiting for something to entice them to pick up the phone and credit card. Third, it has the fancy glamour of cutting-edge internet streaming…which basically means you get to watch all of this nonsense over your computer instead of the old boob tube.

There’s more in this mashup but, suffice to say, the people behind ShangBy are profiting from the price differences between countries. This is what any logical import/export trade company or wholesaler would do except ShangBy is simply using the internet to directly reach consumers rather than reselling to some other U.S. retailer who would inevitably tack on more margin.

What is funny is how utterly predictable it was that this business idea was born out of an observant foreign tourist cum entreprenuer who noticed how many of their fellow foreigner tourists just love buying shit in China because its relatively cheaper here than back home. It is also mildly amusing that ShangBy is a silly concoction of Shanghai, By Shanghai, Shanghai Buy, etc. 

What isn’t funny is that the vast majority of the goods singled out for sale is the same bullshit knick-knackery that the locals here love foisting upon unsuspecting, ignorant foreigners and tourists. Granted, the prices are often cheaper than the same crap back home but they’re still also often significantly more expensive than what the locals pay. Therein lies some of the most ridiculous profit margins in the history of mankind. 

Silk boxers from Shanghai for US$12.00? Sounds fantastic right? That’s about 87 RMB. If you’re here, you can probably get it for 12 RMB, or US$1.65. Yes, buying from ShangBy means you don’t have to spend money on flying to China, but the value proposition of ShangBy is still largely for suckers. As a foreigner and at the very least, you can now feel better that you got ripped off by “your own kind” instead of “those uncivilized, greedy, sneaky Chinese.” Though, its better and more profitable for everyone involved if you, the consumer, just remained ignorant of this.

ShangBy still has tons of other “foreigner-approved” products they could induct into their business model and sell to you. I’m waiting for the watches, pens, and DVDs. Oh man, foreigners just can’t get enough of the 5 RMB DVDs (except they often pay more than 5 RMB). But I guess that wouldn’t fit into their promise of “quality merchandise” and “authenticity.”

To be fair, ShangBy offers you the chance to “bargain” the prices down during their Live Video Broadcast. Unfortunately, without stepping foot in China, the foreign customer has that much less awareness of what the actual value and prices are for these goods in China. It is typical for a foreigner to get quoted a much higher starting price than those quoted to locals. Foreigners who are aware of bargaining also typically counter-offer with a price that is still far too high. Many foreigners think 50% off is already “asking too much” whereas I instantly tell them to think in terms of 5-10% of the starting price they get.  

To be nice, I’ve also gone ahead and given them a bunch of free links which should help them just a wee bit in the search results.