Designing for the online haggle

Having just returned from a visit to our Foolproof Singapore office, and a bolted-on fact finding trip to Kuala Lumpur, I was once again reminded how much I enjoy the thrill of a good haggle.

It is such an engrained part of the shopping psyche in Asia, to the point that no one really believes that they will pay the first price they’re quoted for almost any good or service available (apart from food and drink, it’s apparently rude to haggle for the basics of life).

Negotiating on price is more than just a custom, it’s an integral part of business culture, and the process of finding a negotiated win/win is all part of respecting that culture. And although there are signs that a younger, increasingly urban, generation of Asians are perhaps less comfortable with the confrontational nature of face-to-face haggling, the popularity of group purchasing and deal-finding sites show there is still a strong sense of needing to “bag a bargain”.

So this got me thinking about whether this bargaining mentality is actually a significant barrier to the growth of e-commerce in this region. Even though many Asian cities offer superior access to Wi-Fi, 4G networks, and greater smartphone usage, Asia still lags behind the west in terms of e-commerce adoption.

Whilst a lower penetration of credit card ownership, a preference for cash-on-delivery transactions, and higher perceptions of online fraud all contribute to this lag, the shopping experience itself may lack the emotional rewards of landing a bargain.

Online shopping is still largely built in the western style. It’s a fixed price, take it or leave it, help yourself from the shelf and take it to the check-out and pay now, kind of experience. So where is the interaction? Where is the culturally important, face-saving sense of having “got a good deal”? Where are the alternative payment options that would convert more buyers?

In an environment where the price asked is never the final price, it would be easy for people to believe they can get a better price by going face-to-face rather than buying online. So how can e-commerce retailers create the sense of “best price”?

One way is for retailers to integrate into their sites the opportunity to enter into a dialogue with potential shoppers. For example, China’s equivalent to eBay is Taobao which is a huge collection of small traders and retailers running their own stores on a central platform. But Taobao also provides an instant messaging platform ‘WangWang’, which enables traders and buyers to communicate and bargain over the goods on offer, and reach their own agreements on the price paid.

Another way for consumers to feel they are getting a negotiated deal is to join Group buying sites (like Groupon) and these are also growing fast in Asia. One of the biggest is again in China, called Lashou and seems to satisfy the desire to “get the best price”.

There are also other examples where social networking sites, or instant messaging platforms, have been adopted in Asia by shoppers and retailers to engage in negotiation on the purchase of goods.

So whilst there’s no denying that fixed price shopping habits are growing - you won’t get much luck haggling in the glitzy western style shopping malls present in most Asian cities - and haggling for goods and services may be part of a culture that is being squeezed out by the presence of global brands with global pricing policies, there’s definitely an interesting opportunity out there in the meantime for any brand that wants to see if it can design for the haggle, the negotiated win/win.