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China's newest shopping craze: 'team buying'

More and more consumers meet online before banding together at stores to bargain down prices.

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Last month, Fiona Li did what millions of Chinese shoppers do to find a bargain: she went online.

A few clicks later, she had a lead on where to buy the consumer goodies her brother wanted for his new apartment. Instead of reaching for her credit card, though, she jotted down a time and a place: 8 p.m. at a downtown electronics store.

That evening, Ms. Li and her brother joined 15 strangers at the store to demand a group discount on a new television, refrigerator, and washing machine. Salespeople grumbled at the tactic, but the group refused to buckle. After two hours of haggling, and several walkouts by group members, the store manager agreed to a 10 percent markdown on the three items.

Li, a marketing assistant, went home with a smile on her face. "We wanted to save money, and finally we did it," she says. "It's in our nature, whether we're rich or poor, and if we can save money this way, why not?"

Welcome to China's newest shopping craze, tuangou, or team buying. By combining the power of the Internet to compare prices with the stealth tactics of the flash mob, team buyers are driving hard bargains in the world's hottest economy. Dozens of team-buying websites have sprung up to catch the trend, which first began in online forums and chat rooms.

Typically, shoppers looking for the same items find each other online, then band together offline to negotiate special deals on electronics, home furnishings, and automobiles. Some team buyers approach store managers beforehand, others simply show up and flex their collective muscle.

Bargaining is a way of life in China. Shoppers treat sticker prices as a starting point for negotiations, and it's a point of pride to strike a tough bargain or walk away if unhappy.

This habit of face-to-face haggling is one reason why regular online shopping is only slowly catching on in China, which has more than 110 million Internet users, second only to the US. E-commerce was worth around $1 billion in 2005, according to Beijing-based research company iResearch. Many shoppers, though, prefer cash-on-delivery or checks to online payment systems, and credit cards aren't widely used.

Internet surfers are also wary of 'one-click' shopping because they want to be sure what they're getting, and what happens if their washing machine stops spinning. In a market awash in fakes, there's plenty of skepticism about branded goods and the promises of distributors.

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