Retail outlets in China have been known to employ “creative” pricing strategies, but a new app has been launched that presents an equally creative solution: crowd-sourcing store checks.

The Store Checkers, a China-based group of young entrepreneurs, have identified the two greatest problems in providing supplier and manufacturers the feedback they need from their retailers: first, the lack of information about point-of-sale conditions in China, and second, the sheer volume of research and busy work required to get this information. Combining store checks with the power of crowd sourcing tackles both problems at once.

Is there an oversight problem in China?

Absolutely. It’s not unheard of for companies to find out that their retailer isn’t living up to their end of the deal months after the product has already been packaged incorrectly, mislabelled, or displayed poorly. In some cases, the products aren’t being displayed at all, but have been sold on to a different distributor.

Chinese retailers aren’t above artificially inflating the price of a product, either. It’s not just smaller supermarkets or stores; large chains and subsidiaries of foreign companies have been caught in the act. Walmart and Carrefour have been fined for misleading pricing practices in the past. Methods vary, but they include throwing in freebies to make consumers feel like they are getting a bargain, while in reality the “base” product has been overcharged and the freebie doesn’t nearly cover the additional cost.

One way to avoid irreparable damage to a brand in China is to rely on any internal bodies at larger chains, but there’s an obvious issue of bias. A second option is to conduct store checks. Store checking is, simply put, the process of discovering first-hand how products are being sold. However, since larger companies may have to check dozens or even hundreds of outlets, this is time-consuming and data-intensive work. Even a large team of investigators might take weeks to finish checks for products sold nationwide.

Crowd-sourcing as a solution for China

The solution hit upon by Store Checker is as novel as it is ingenious. Every consumer engages in store checking every time they go to the store, albeit unconsciously. Store checking simply involves noting down the information available in an analyzable form. So why pay consultants to do it? China’s shoppers are famously shrewd, always on the search for a bargain, and, in a country where fakes are a serious problem, possess a sharp eye for detail. In short, the perfect store checker (and often the target consumers to boot)!

So, how to utilize this huge potential? Easy. In a country with 700 million smartphone users, almost every urban inhabitant in China has the tool in hand to profit from this need for information. The Store Checkers phone and tablet app offers up missions or “bounties” for users on the go. They can simply accept a mission as it gets posted, follow directions to the store, complete the assignment within a set amount of time, submit the required image and audio attachments, and have the reward deposited directly to their bank accounts. Quick, simple, and much cheaper than having highly paid consultants running around supermarkets all day.

By mobilizing China’s savvy consumers with a small monetary reward for completing a mission, the Store Checkers may have found the key to deploying the largest store checking team in the world.

 

SOURCES:

http://money.cnn.com/2011/01/26/news/international/walmart_china_fines/

http://thestorecheckers.com/

http://www.reuters.com/article/2012/12/16/us-china-carrefour-fine-idUSBRE8BF09C20121216

http://www.sjgrand.cn/investing-china-be-careful-about-variable-interests-entities

http://techcrunch.com/2014/03/13/china-now-has-700m-active-smartphone-users-says-umeng/

 

374193 3011027085566 661669269 n 290x290 How Franchising Works in ChinaThibaud Andre is manager at Daxue China Market Research, a China-based market research firm focusing on China. Find him on Twitter as @DaxueConsulting or on LinkedIn and Google+.