We know Taobao is an amazing place. You can find anything and everything there. But every now and then you might encounter something that makes you scratch your head and wonder, “Why would people buy this?”
Well, where there is demand, and therefore supply. These funny items are available for sale for a reason. We’d like to share some of them with you:
1. Paper bags and empty boxes from luxury brands
Versace scarf box + large paper bag + tag: CNY 90
Dolce & Gabbana paper bags: CNY 80 (large), CNY 65 (medium), CNY 50 (small)
Louis Vuitton paper bag + dust bag (for handbags): CNY 200
You might wonder what the point of buying these paper bags online is, especially at such high prices. Well, it’s a typical case of China’s “face” culture: where one will do anything to appear superior, either in social rank or in personal wealth, and when in public. By its own definition, a “luxury product” is not something that’s affordable to just anyone. Some prefer buying cheap counterfeits to beef up their face index, while others choose to buy authentic packaging. Imagine how envious people will be when you drop by your local Wal-Mart and casually load a dozen eggs and a couple of tomatoes into your Versace-branded paper bag.
2. “iPhone online” status on QQ instant messenger
Another radical new service stimulated by face culture. QQ is China’s (and the world’s) biggest instant messaging service, and almost every Chinese netizen has a QQ account. QQ has some special treats for iOS users: if you are logging in from an iPhone or iPad, a special icon will show up at the bottom of your QQ avatar, and when you send a message, there will be an automatically generated note attached to the end of your message that says, “sent from QQ for iPhone (or iPad)”.
We know that Chinese consumers see iOS devices as a symbol of personal wealth, so nothing boosts your face index better than announcing to all your QQ contacts that you possess such an expensive, coveted device.
Upon taking the order, the Taobao vendor collects your QQ account and password, and really logs into your account on an actual iOS device. All your friends will see from your QQ avatar that you are a proud iOS user now. Since it’s a lasting service, you will be charged by a monthly fee that ranges from 5 kuai to 8 kuai, easily affordable to everyone.
Of course, it’s obvious that it’s risky handing your QQ credentials to someone you don’t even know. The alternative is to pay a one-time small fee to get your QQ avatar professionally photoshopped with an “iPhone online” icon, and hand-type the “sent from QQ for iPhone (or iPad)” message each time you start a chat with somebody. Clumsy, but safe, and good bang for your buck.
3. Empty Chateau Lafite wine bottles
There used to be a lot of these empty bottles floating around the Chinese web, priced from under CNY 100 to over CNY 2,000. Yes, you read it right. CNY 2,000 for a reasonably well preserved empty wine bottle. There used to be a remarkable number of such bottle sellers on Taobao, and a whole swarm of them over the entire Chinese internet. These bottles are not generally targeted at your everyday consumer, but rather at counterfeit wine producers. A bottle of Chateau Lafite wine, regardless of which label, can easily fetch over CNY 10,000 in China. It’s a good deal for these producers as they only have to spend CNY 2,000 on a genuine bottle, which will make the final product look that much closer to the real thing.
Fortunately, the Rothschild family is very aware of this phenomenon, and has been actively hunting down counterfeit producers in China. You can hardly find any Chateau Lafite bottle sellers on Taobao these days, but there still are plenty of them on other websites.
4. Gift recycling
These are not things that are sold to you. Instead, such Taobao vendors offer to BUY stuff from you. Giving gifts is an important part of Chinese culture. It’s considered good manners to send presents to your family, friends, superior at work, or business partners. Sometimes it’s very hard to tell good manners from bribery.
Anyway, before each major holiday, Chinese consumers tend to buy gifts en masse. Some of the most popular gifts are: gift cards for supermarkets or online stores, expensive-looking wines, Moutai Chinese spirit, and electronic gadgets. Although great in value, these things are usually not very useful, especially gift cards and wines/spirits. So, after the holiday, people tend to find these gift recycling services and dump their loot for cash. It’s not exactly legal business, but it serves the people greatly.
5. International purchase agents
“代购” (dài gòu), literally translated as “buy it for you”, is a popular service that’s been offered on Taobao since the dawn of time. Most of these purchase agents deal with international requests, such as gadgets from the US, wines and perfumes from France, handbags from Italy, etc. You might wonder why people would bother going such a long way to buy something that should easily be available in China. The truth is that they are not so easily available. Fashion houses frequently put China on their priority ladder, and Chinese government bars many gadgets/toys/books/movies out of the country with harsh import laws. Even if the desired item is available through legal channels, the tariff imposed by Chinese customs is always a lot higher than the international shipping fee.
“If that’s the case, why hire purchase agents instead of just buying it from the official online store? You have a credit card!” One might argue. Well, that’s exactly where the problem is: Chinese consumers generally do not have credit cards. You will be surprised by the number of Chinese who can’t tell a debit card from a credit card. Most people carry debit cards with them, and pay for whatever they buy online with them. One major drawback of such cards is that you can only spend whatever you have saved up. In other words: you can’t pay in anything other than Chinese Yuan. That’s a problem for those who want to buy something from an Italian or American store.
Even for those who do have a credit card, it’s not exactly easy to use them. Chinese credit cards do not follow the international norm of “pay in whatever currency you need to, and repay your debt in your home currency”. Chinese credit cards (including VISA, MasterCard, American Express) limit the spending capabilities to (usually) TWO currencies: CNY, and one foreign currency. The foreign currency is usually US dollars, but Japanese Yen is common too. Spending a foreign currency on the credit card is a saga by itself: assume you pay in USD first, when it comes time to pay your bill, you will have to go to the bank in person, show your legal ID, calculate how much your debt is when converted to CNY, pay in CNY, get part of it exchanged into USD, then you can pay your bill. Essentially you are going through a whole process of currency exchange (ID verification, forms upon forms to sign), to pay what you spent in exactly the same currency. When examining your account balance, you will see two parallel numbers: CNY credit, and your specified foreign currency credit. Due to such severe limitations, unpopular currencies like the Australian dollar and South Korean Won can be very tricky to deal with.
This is why there are so many international purchase agents out there on Taobao. As long as you have some method to pay for the order, you are in business. Receive orders from your clients over Taobao, fill up the order form on the brand’s official online store (using the Taobao buyer’s shipping address), and Bob’s your uncle. Nice commission for less than 5 minutes of work.
6. International trade leftovers
Search for “外贸” wài mào (international trade), “原单” yuán dān (original orders) or “尾单” wěi dān (order leftovers) on Taobao, and you might be surprised by the number of results that show up. China is the world’s factory, and most things are made here. When a brand puts in an order to a contracted Chinese manufacturer, it usually allocates more raw material than what’s needed so that the manufacturer has room for error. Given that, the factories are usually able to produce more than what’s required to meet the order. The extras usually end up on Taobao. These items might have minor flaws, but generally bear the same quality as the genuine branded items. It’s not impossible to get an “order leftover” Burberry coat at an amazingly low price.
Chinese consumers love such deals, because of its sensational value for money. There is a growing risk that more and more counterfeits are disguising themselves as “order leftovers”. Still, many feel that it’s a risk well worth taking.
What do these items for sale say about Chinese consumers, and what can your business could learn from them?
- “Face culture” is an important part of Chinese life. Relate your products and services to social rank. Give your consumers something to show off with. It could be reusable packaging, branded souvenirs, or a unique avatar on popular SNS websites.
- Be extra careful about counterfeits. If your product is popular enough, people will spend a surprising amount of effort faking your products.
- The gifts you give to business partners should meet at least one of the following characteristics: A) it’s valuable and easily resalable; B) it’s cleverly designed and your partner will want to keep it; C) it’s not of much value but is small enough, so your partner won’t mind keeping it on the desk; D) it’s cheap, bulky and not very interesting, but it at least is made of eco-friendly materials.
- Your payment support should be Chinese-friendly. It would not be wise to assume, “Well they can buy whatever they want if they have a credit card. We ship!” Accept payments in Chinese Yuan. If you can’t, at least make your check-out system PayPal-friendly. If you can’t even do that, you might want to sell to Taobao purchase agents.
- Don’t price your products at ridiculously high prices simply because “it’s not available in China”. Trust me on this: whatever you are trying to sell, it is already available in China, with the exception of products/services that didn’t previously exist on this planet. China has the most advanced black market system in the world. You can find what’s not available to the United States of America here without much effort, and often at relatively reasonable prices. Unless you are in a dominant position without substitutes like Apple, Louis Vuitton or Chanel, price your products wisely. You are not only fighting competitors, but the cheaper version of your very own products leaked from the factories.
If you have found more funny items sold primarily or exclusively in China, and feel confused about what they are for, feel free to ask us. You might discover new marketing strategy for your own business in them.
Article by Kane Gao, Illuminant’s head of research.