Donklephant » Blog Archive » Of Baby Formula And The Chinese Economy

Of Baby Formula And The Chinese Economy

By Justin Gardner | Related entries in Economy, The World

The author of Freakonomics, Steven D. Levitt, has a blog that deals with examples of “Freakonomics” beyond the book.

This particular incident concerns his recent trip to China.

I thought I had observed the most extreme case of excess labor when I went to buy a can of formula for my daughter Sophie in a large grocery store in Nanchang. As I searched the aisle for the exact type of formula she had been using in her orphanage, four young woman very eagerly attempted to help me. At first I thought they were just shoppers trying to aid me. Eventually (they didn’t speak English and I knew about 50 words of Mandarin) I realized they were working. Four of them huddled around me for roughly 10 minutes before I finally purchased $4 worth of formula. It made absolutely no sense to me.

Only later, back at the hotel, did my Chinese guide explain what was going on. (If you want, pause here before reaading here and see if you can figure it out — I couldn’t).

The answer: these women weren’t employees of the grocery store, they were hired by rival formula companies to try to direct customers to their particular brand of formula! Which explains why they were all so cheerfully and persistently suggesting so many different kinds of formula to me…the store didn’t care what kind of formula I bought. A sale was a sale. But to the formula manufacturers, stealing business from the rival brands was worth paying an employee to do.

Talk about customer service. Whoa.

This entry was posted on Thursday, August 11th, 2005 and is filed under Economy, The World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Of Baby Formula And The Chinese Economy”

David Foster Says:
August 12th, 2005 at 4:50 pm
We do the same thing here, just a bit more indirectly…advertising, “shelf space allowances,” etc.
Justin Gardner Says:
August 12th, 2005 at 5:20 pm
Interesting point. But I do think they’re not the same.

Sure, shelf space allowances definitely influence buying desicions. Numerous studies back this up. However, our advertising is passive. This example is extremely aggressive and I think it’s an interesting sidebar to the “Chinese Miracle” we’re hearing so much about.

Name (required)

Mail (will not be published) (required)

Website

NOTE TO COMMENTERS:

You must ALWAYS fill in the two word CAPTCHA below to submit a comment. And if this is your first time commenting on Donklephant, it will be held in a moderation queue for approval. Please don't resubmit the same comment a couple times. We'll get around to moderating it soon enough.

Also, sometimes even if you've commented before, it may still get placed in a moderation queue and/or sent to the spam folder. If it's just in moderation queue, it'll be published, but it may be deleted if it lands in the spam folder. My apologies if this happens but there are some keywords that push it into the spam folder.

One last note, we will not tolerate comments that disparage people based on age, sex, handicap, race, color, sexual orientation, national origin or ancestry. We reserve the right to delete these comments and ban the people who make them from ever commenting here again.

Thanks for understanding and have a pleasurable commenting experience.