'Swarmonomics' and the Chinese shopper – seven things to learn

In the past four weeks we have seen two examples of swarm-style purchase frenzies by Chinese shoppers.

The first occasion was the panic-buying of common salt. Shoppers were under the impression that the iodine in salt could help in protecting them from the negative effects of nuclear radiation coming out of Japan following the earthquake-related nuclear emergency.

Stocking up on salt was also viewed as a good idea because some shoppers were convinced that the sea salt due to hit shelves in the coming months would have been polluted by the nuclear radiation, making it wiser to buy up stocks now. On a single day, around 4,000 tonnes of salt was sold in Zhejiang alone! Shops ran out of stocks, and when all the salt was gone, many zeroed in on soy sauce, due to its high salt content.
Calm had barely returned when another round of swarm-style purchasing hit the stores. This time it was laundry detergent.

Shoppers from Shanghai, Beijing, Hangzhou and Wenzhou, upon hearing that detergent prices were to go up soon, moved in hordes and wiped the store shelves clean. Shop shelves lay empty as wave after wave of anxious shoppers loaded their shopping carts with almost any pack of detergent that they could lay their hands on.

These two instances say a great deal about the attitudes of the average Chinese shopper. These attitudes include:

1. Uncertainty about the future: The average Chinese shopper is anxious about tomorrow. They are not sure what is going to come their way and want to do all that they can to pre-empt anything that might go wrong. Making oneself uncomfortable today only to avert negative effects of future uncertainty, no matter of how remote or far-fetched it might be, is not unusual

2. Low levels of trust: Chinese shoppers do not trust reactive information. Irrespective of the assurances from various other professional agencies about the price, quality and future availability of the products, shoppers were not convinced. They went on stocking up on these products as much as they could.

3. Risk aversion: Chinese shoppers are hugely risk-averse, especially in times of relative uncertainty. They do not like to

leave things to a stroke of luck; they want to ensure that they do the right thing for themselves and ensure that it covers any kind of potential risk.

4. Value consciousness: The large majority of Chinese shoppers will go to any extent to save money. 'Money saved is money earned' seems to be the shopping mantra for the masses that flock to supermarkets. This value consciousness is not just unique to China, but a theme reflected in other emerging markets. Shoppers in India are not very different. The sight of Chinese shoppers jostling for salt and detergent is reminiscent of the shopper stampede in India in 2006 when the Big Bazaar (a leading retail store brand in India) announced a three-day-long annual sale that offered a heavy discount on products across categories such as apparel, electronics and other consumables. Millions of shoppers came to buy, and in some of the cities police had to be called to manage the anxious mob of shoppers. Shoppers were worried that they might not be able to get the deal if they reached the store late or missed the first day of sale.

5. 'Swarm sense': The occurrence of a flash flood of shoppers is neither sense nor nonsense; instead it is swarm-sense.

This is propelled by a feeling that 'the crowd must be right'. There is complete lack of individual judgment in the purchase decisions, and this only becomes more pronounced in the event of insufficient proactive information from credible sources.

This swarm-sense is also similar to the way Indian masses reacted to the news of Ganesha (a Hindu deity) drinking milk in 1995 and again in 2006. Millions streamed into Hindu temples carrying their pot of milk to offer to the deity.

6. Connectedness: Rumours behind both the events were triggered largely by misinformation that spread through mobile phone messages and online microblogs. The speed at which the messages were spread and the scale of response demonstrates how modern-day communication technology has turbo-charged age-old word of mouth. This also shows the higher credibility of communication channels like mobile phones in such rumour-laden situations.

7. Post-fact society: At a time when we have access to multiple information sources and diverse perspectives, we do not get the truth; we only choose to believe one version of it. What might 10-15 years ago have been a journalist's dilemma about which version of a story to believe and write about, is now the dilemma of the average person. The only difference is that the average recipient of information might not always be conscious of the choices that he or she is making.

What can all this tell us as marketers and advertisers? We can definitely do well by acknowledging the importance of speed and timeliness of response. Such situations can be seen as moments of crisis and yet they can prove to be big opportunities for brands to come across as earnest and committed to a shopper's interest. For example, in the above two situations, consumer product brands could have gained a great deal had they stepped in early and reached out to shoppers; in the case

of the detergent frenzy they could have told shoppers about the company's commitment to provide the products at constant prices.

These two incidents also show the importance of opinion leaders in shaping people's behaviour. If brands identify the opinion leaders, especially those with clout in the online space, and supply them with complete information, they would be able to counter misinformation much faster and more effectively.

While shoppers are risk-averse when they lack credible information, marketers, in spite of having greater access to information, are not much different. They need to overcome this barrier. On this occasion marketers lost the opportunity to have a socially responsive stance, but there is nothing stopping them from doing that in the future.

Form Function Faceoff

Only after the dust settles, and the euphoria of holding a very beautiful looking mobile phone is replaced with the realism about “what am I getting for what I am paying”, will the real winner emerge.
Today, as I sit writing this, many would be queuing up outside the Sahara Mall. Today is the iPhone day!
Now Indians will get a phone on which they can pinch pictures with two fingers and make them big or small, will no longer need a stylus and yet need not press any buttons to do what they want to do, would see outstanding details on the screen, would experience desktop-like internet, would experience and unlimited new applications that can be downloaded from the App Store. And most importantly from today they will make heads turn. Well, at least a little.
So, iPhone has it all. Or does it? To me it has great form – shape, look, display, BRAND, status, some novel features to make girls in your office say “Wow!” and rub their shoulder (unknowingly) against yours, a little longer as you show them what the phone can do in contrast to the usual “New phone, nice!” and walk away kind of situation.

Attention for female colleagues apart, but iPhone has its own share of limitations, which I am sure the readers here would have already experienced of read about viz. the hugely infamous ‘no copy pasting and forwarding of messages’ (due to this Vodafone & Airtel make less money from SMSes that are forwarded, no wonder they have not shown any mercy in pricing the device!), Bluetooth only for hands free, no transferring of contacts between the SIM and the phone (strange), no recording of video (that is even more strange) and to top it all no option for external memory. So an 8 GB or a 16 GB iPhone will live as an 8 or 16 GB and die like that! Pity, in our times of expandability and modularity – we can’t do much about that on the iPhone.
This said iPhone is the greatest mobile ‘form’ that money can buy. I would have said this about functions too but because there is no 3G service in India yet, iPhone will remain a hugely underutilized device.
How? Well, for example with 3G you could have watched the much awaited Vijender Kumar fight at 9:30 pm tonight, on-the-go (and needless to say could have made more heads turn!)

While you cannot yet watch the Boxing match tonight, on your iPhone, Nokia pulled of a punch on the day of India’s second medal at the Olympics. They have tried to preempt the iPhone launch with their N96. So what makes this worth looking at as compared to the hugely attractive and so much more talked about iPhone? To me, a lot is going for it. Just sample some of the things that it offers. N96 is a dream come true for memory hungry Indians at 16 GB expandable to 24! With that kind of ‘memory’ I really do not think if N96 will ‘forget’ much. For instance it will remember 18000 songs, keep as much as 20,000 pictures at 5 Megapixel, and store as much as 60 hrs of video that can be viewed on its 2.8” screen.

It also has a novel feature called Wave Secure that will help you back up your phone on the net and even help you track it if you misplaced it. While these are more of the device virtues, which Nokia has traditionally been strong in, what are more impressive are the new applications. Maps functions helps you create your own ‘soft maps’ (I like soft maps), so you can location tag your pictures and create your own world, your own topography for you to share with those who are close. N96 also helps us access OVi, which will now finally go head to head with Apple Apps and we’ll come to know who stands taller.

So how is the stage set? Who will win? Why? What to expect?
The way I look at these two launches is Apple is finally stepping on Nokia soil. I suppose India and China are both big Nokia markets without any iPhone yet. So it would be interesting to watch how things unfold.

Some initial thoughts:

1. I look at this as a battle between form (3G iPhone, in 2G environment will continue to be more of a looker than a doer!) and function (the ‘very loaded’ N96)

2. I see this as a battle for the top slot in terms of image - Apple iPhone Vs. Nokia N 96 – Nokia’s convergence flagship
But the way I look at it now, Apple could win round one – the first batch of sales, because a N96 still looks like a Nokia, and people have seen that look and are a little jaded. They want to flirt with design. And for people ready to pay that price – functionality can take a break for a while (until at least as long as they do not get bored with their iPhone)

3. This might sound a little provocative but I see a lot of girls buying the iPhone – it’s a beautiful thing to carry and it does cute things too!

To me while the iPhone is entertaining, N96 is entertainment converged but people will take time to discover the meaning of entertainment converged, till that time they will fiddle with their iPhones.Another thing, a little unrelated but interesting none the less, is to watch that will be useful to track is iPod sales in India after the iPhone launch. I understand that Apple will end up selling fewer of those, because the iPhone can do a good deal of personal stereo pretty well.

At the end, I look at iPhone’s launch and its predictable success, (unless the devices have a bug or something that makes people regret their decision) as an example of how great product design can cover many a weaknesses of the product. I see N96 as a great workhorse who unfortunately still looks like many other Nokia phones that came before that - one of the reasons why it would be overlooked by many who actually need it.May the better product win!