Chinese Economics
SEAJ,
These observations harken back to an old changping thread regarding the customer is always wrong in China.
This is why China has never built a trusted global brand. Ours is a business culture of razor-thin margins, small-ball politics, how-can-i-screw-my-suppliers-customers-and-workers philosophy.
As you say, the Chinese proprietor's mental calculus is highly nonintuitive, but it's invariably a one-step tactical lookahead as opposed to a long-term strategy.
His thinking goes, "This customer is a local, value-conscious Chinese. Rip him off so he doesn't come back again. This customer is a stupid laowei. RMB is monopoly money for him, so rip him off too."
While this kind of thinking is of course profitable, it's small-ball and nonscalable. Chinese business owners set up shop, make some money, close it down, start a new one. High-margin, white-shoe global chains like Starbucks are fantastical creatures in China. | |
