"It's a dangerous business, going out of your door. You step into the Road, and if you don't keep your feet, there is no knowing where you might be swept off to." - J.R.R. Tolkien

Friday, June 10, 2011

The Kazakhstani Middleman (and woman)

There's something you should know about Kazakhstan. Everyone here is a middleman of some sort, selling something to someone. Even my 66-year-old, frail, Korean host mother. But we'll get to that later.

Every building has some kind of small general store in it. Every store has exactly the same products and exactly the same prices, so how any of them stay in business, I have no idea. There are at least 7 bazaars in the city, and again all of them carry the exact same products and much of the same prices. The sellers at the bazaar seem to be in league somehow, though I haven't quite worked it out yet. Here is a typical interaction at the bazaar.

American: How much is that dress?
Bazaar Guy: 4,000 tenge (~ $27)
American: But she's selling the dress for 3,800 tenge.
Bazaar Guy: But here it costs 4,000 tenge.
American: Let's make it 3,700 and you'll get my business.
Bazaar Guy: But it costs 4,000.
American: Okay, how about 3,800.
Bazaar Guy: If you want to pay 3,800 go buy it from her. Here it costs 4,000.

How exactly does this make sense?! The Bazaar Haggling Textbook clearly states that you should lower your price to get my business. But instead you send me across the way to your lady friend? This is confusing at best and not sound business strategy. Unless the lady friend is particularly attractive, or a good cook, in which case I give you credit for creativity. But I digress, back to the point at hand.

More than in any country I've ever been to (which, granted, isn't many) everyone in Kazakhstan is trying to sell something. More often than not, it's something they bought with the sole purpose of re-selling, and often they're not doing it terribly successfully.

My host mother comes home from the bazaar every Saturday with 5 kilos of pomegranates (for those of you not on the metric system, that's 11 lbs). Don't get me wrong, I love pomegranates, but who on earth needs 5 kilos?? So I finally asked and she calmly informed me that she sells 4 kilos to her neighbors. Sure she gets a 20 cent markup on those 4 kilos and makes a whole 80 cents in the whole affair (even here that's small change), but is it worth her effort to haul that extra 4 kilos all the way back from the bazaar?

In the office, co-workers resell things that they bought at the bazaar in much the same fashion. This week our accountant brought in a handful of bracelets that she had bought at the bazaar just so she could resell them to us. When she made all the possible sales in our office, she went upstairs to the other offices in our buildings to finish business. Three different women from three different cosmetic companies stopped in to show off their newest items, one boy came by selling kids books, and a woman stopped in to offer to pick up lunch for our office at a nearby cafe, for a small fee of course.

On the 5 minute walk from the bus stop to my office, I pass 14 “stalls” full of random stuff that people are trying to sell to passersby. Some people sell vegetables, one lady sells houseplants and underwear, there's a lady that sells fish at a small table ineffectively shaded by the world's tiniest umbrella, a man that sells fish from the trunk of his car, a man that sells dairy products out of the back of his van, and an ancient babushka that sells hand-knit slippers. Sometimes a husband and wife show up fresh from China (which they're eager to tell everyone within a 100 yard radius) with the back seat and trunk of their ancient Lada (which looks exactly like this) with crates of tomatoes and cucumbers. They sell to the other vegetable stand owners who in turn bump up the price by 15 cents a kilo and resell them. And yet, instead of just buying from the couple selling out of their car, people continue to go to the stands where they pay more. Perhaps it's out of habit, maybe they feel better buying produce from a mass-produced, pre-fab vegetable hut than from the trunk of a 30-year-old Soviet car, or maybe they just haven't really thought about it. It's a mystery.

2 comments:

  1. Fascinating!! I would love to learn more about this. Does your host mom buy things from other people? And if yes, are these people the pomegranate buyers?? The first point about bargaining could be because it either genuinely is a perfect market or (as you hypothesized) a cartel situation.

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  2. This is definitely in the kabcity realm of behavior economics.

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