07.08.07

Roman Barbershops and Chinese Consumerism

Posted in Barbershop, Business 'n Economics at 3:51 pm by Benjamin Ross

In July, Fuzhou is just about as hot as any place on earth. For my own sanity I have purposefully refrained from doing the Celsius to Fahrenheit conversions, but I am guessing the temperatures are regularly in the 100’s with humidity hovering somewhere between 95 and 98%. It’s the kind of weather where I walk outside and before I have even left my apartment complex, I have already broken a sweat. Yesterday, after a long bike ride in the heat, I decided to treat myself to a hair wash. For a change went to an upper tier (高等)barbershop, as opposed to my barbershop which is considered middle tier (中等).

The upscale barbershop I chose has a Roman theme and is located on Jintai Lu, one of Fuzhou’s more upscale, shopping streets. One of the little sisters at the Roman shop, named Mao Mao, used to work at my barbershop and I had promised her that one day I would come in to her shop to get a hair wash.

roman barbershop china
The marble floors and wooden furniture give the Roman barbershop an air of luxury which was absent in my barbershop.

From the first step into the Roman barbershop, the feeling is one of luxury and comfort. The walls the shop are decorated with Roman style columns. The mirrors and barber tables are all made of fine wood. The floor tiles are marble. There are hand-crafted wooden couches with fine upholstery and a wooden bookshelf with replicas of classic English novels. The walls are covered with fake but tasteful oil paintings. Even the bathroom is donned with wooden doors and fine metal work.

Along with the posch environment comes the expected price hike. A haircut in the Roman barbershop is 58 RMB and a hairwash is 24 RMB, compared with only 30 for a haircut and 12 for a wash in my shop.

After Mao Mao and I chatted for a few minutes, she took me to the washing area, which looked like a set of a Turkish bathhouse from a cheesy Hong Kong movie. As she washed my hair she asked me, “Do you think there is any difference between the hair wash here and the hair wash at the other shop?” Mao Mao asked me.

As Mao Mao massaged my head, I could feel that the shampoo was of higher quality than the cheap stuff used in middle tier barbershops, however the actual service she was providing me was of no difference than what was given in my shop.

couch barbershop china
The customer waiting area, with finely upholstered couches and coffee table.

“Not really,” I replied. “It seems pretty much the same.”

“That’s because I learned how to wash hair at your shop. The service here is exactly the same, but it is more expensive because of the atmosphere.”

Mao Mao finished up my two rounds of shampoo, then my conditioner and neck massage, and as she had indicated, everything she did in the Roman barbershop was exactly the same as in my old shop.

While Mao Mao was drying my hair I told her my thoughts on the Roman barbershop.

“This shop is really nice, but I probably won’t come back here too often. It’s nice to see you, but as you said, I can get the same service at the other barbershop for half the price.”

“Yeah, I know what you mean.” Mao Mao said. “Most of our customers don’t necessarily come here for the service.”

“Is it the atmosphere that they like?” I asked.

“The atmosphere is important, but more than anything, our customers like to come here because a lot of rich people get their hair washed here. This makes it more appealing,” she said.

bathroom china
Even the bathroom doors were decorated.

This represents an interesting consumer pattern which I have noticed in other Chinese businesses as well. That is that wealthy Chinese people will pay high prices to know that they are patronizing a business which strictly caters to…other wealthy Chinese people.

It reminds me of a time I was at a bar in Fuzhou with a Chinese friend of mine who himself was a former bar owner. The bar had a pleasant ambiance, a good house band, and the beer was cheap, only 10 RMB per bottle. We were there on a Saturday night, and it was virtually empty.

“Why do you think business is so bad here?” I asked my friend.

“The beer is too cheap,” he replied. “Chinese people like expensive things. If the drinks are not expensive, the patrons will think it is not a good bar. They will not want to bring their friends there and risk losing face.”

In China, a product or service with a fancy package and an upped price tag will often generate more sales than an identical product sold at a discount price. As China’s nouveau riche demographic expands, so does the demand for high-end products and services. Whether these products and services are of higher quality than those at a lower price is questionable. However, for many what they are paying for is not necessarily better quality, but the image of better quality. As for me, I could do without the marble tiles and fancy upholstery. I’ll still be at the old barbershop, getting my hair washed for 12 RMB.

24 Comments »

  1. Jason China said,

    July 8, 2007 at 6:10 pm

    I’ve noticed the same thing here in Shanghai. My favorite local dive has 10 RMB beers and shots, a pool table, they play good music, (even do live stuff on Saturdays) and has cool, graffiti covered walls. A great place by my standards. It’s nearly always empty.
    Also, with the exception of good friends, I’ve noticed that most Chinese people are quite surprised when I tell them it’s my favorite place to drink. (Well, if they’ve even heard of it)
    And oh yeah, they recently raised all the prices by 5 RMB….

  2. Jeremy China said,

    July 8, 2007 at 6:51 pm

    Jason,

    What is this 10 RMB per shot and beer bar you talk of? Where is it located and what’s the name? I’d be interested…

    What’s also amazing is how anything that is aimed at the upper classes within China is a fair bit more than it would be in the US – brand name clothes, probably made in China, selling for 20% more than the full sale price in America – things like that. Makes you wonder…

  3. Benjamin Ross China said,

    July 8, 2007 at 7:00 pm

    @Jeremy

    We have it pretty nice here in Fuzhou. The bars where foreigners frequent all sell Chinese beer for 10 kuai. Any more expensive, and the laowai won’t show up. Interestingly enough, it’s usually the Chinese patrons who drink the 20 kuai Budweiser, while the foreigners stay with 10 kuai Qingdaos and local brews.

  4. zuraffo Singapore said,

    July 9, 2007 at 1:20 am

    Another reason to patronize the rich-infested join is so that you can network with the appropriate guys.

  5. Alan United States said,

    July 9, 2007 at 1:22 am

    I think your observation is mostly right, although you take the risk of a sweeping overgeneralization. Right now most Chinese who have become rich so quickly just don’t know what to do with money. They tend to show off and be snobbish. I would even think that Asians in general tend to be more showy with wealth and more snobbish. One time a filthy rich friend of ours took my wife and me to a Japanese restaurant in Taipei. The lunch cost USD$100 to $150 each. In America, we could spend $15 for the same lunch at an upscale Japanese restaurant. I think the reason they have $100+ lunch in Taipei is that people there pay a lot more attention to status.

    Now here is a little observation I have of your post. You seemed to be surprised at the snobbish consumerism displayed by rich Chinese in China. That led me to believe you don’t think such consumer behavior exists with Americans. It’s interesting that I have been saying the same thing about a certain group of Americans for a few years now. I have observed the exact same consumer behavior of some Americans in recent years. They are very much into high-end, luxurious, brand name stuff. They don’t like to associate with people whom they perceive not on par with them. Now the difference is that: these snobbish Americans usually don’t have the money that they would like others to believe they have. Trust me. Some of our American friends are like just that. Usually wives spend like crazy to impress others while husbands are stressed out trying to bring home more dough. I am an investor and can easily tell which friend has or hasn’t money by talking about investments. Those who have usually would share or agree with certain investment ideas. Those who consume all they make usually have no idea as to what to invest in. In America, though, I have found that usually the really rich folks aren’t showy at all. We have a few of these friends as well. They are quite frugal and are happy with who they are. Who wouldn’t, right?

  6. Laura Lee United States said,

    July 9, 2007 at 6:11 am

    Alan,

    I am a Chinese. I do agree with you that “Asians in general tend to be more showy with wealth and more snobbish.”

    Here is one example. I am working in academia. Nowadays, when you try to find a faculty job in a Chinese university, you will be far better off if you graduate from an elite, private US university, for example, Harvard, Stanford, or MIT. It does not matter much how well you did in your graduate program but it matters a lot which program you are from. The same thing happened, probably is still happening, in Taiwan, Japan, and Korea.

    I happened to graduate from a top public university, not No 1 in my field but in top 10. So I ran into two opposite treatments in China: at a school who believes that my school is an elite, I was treated super nicely, while at schools who think they are on par with only the top 1 school in the US, you can smell the snobbishness everywhere.

  7. Chip China said,

    July 9, 2007 at 8:57 am

    This phenomenom, while definitely more prevelant in chinese culture, is seen in other cultures as well. If I have my facts right, Gibson guitars once dropped their prices on their custom made guitars to compete with the japanese imports (Ibanez, etc.). After dropping the price, sales dropped. So they brought the price back up and even went higher than the original price, and sales INCREASED. People wanted to buy Gibson because it was expensive. During this whole process, the quality of the Gibson guitar pretty much stayed the same.

  8. Alan United States said,

    July 9, 2007 at 11:28 am

    Somebody needs to translate this book – The Millionaire Next Door by Drs. Stanley and Danko – into Chinese.

    The authors show who the really rich folks are and how they spend their money. There are always exceptions, but by and large, the really rich people in America whom I have befriended are usually very frugal and humble. If you don’t know them well, you can’t really tell they are rich. I even know a billionaire – a gentleman in his early 70’s who made his billions through oil exploration, real estate and banking. He is as humble as you can imagine. I know Chinese wealthy folks are very different from American counterparts. I have reading stuff from Shangaiist.com and have come across news on the Millionaire Fair in Shanghai a while ago where supposedly rich folks show up to see what luxuries their money can buy. Folks, you will never see such a fair in America.

  9. Matt Schiavenza China said,

    July 9, 2007 at 11:36 pm

    Hmmm- I think this phenomenon exists in practically every society. People tend to patronize businesses with a clientele catering to their own status group, regardless of quality. For instance, in San Francisco my favorite bar Specs makes a mean Vodka Tonic for $3.50. Walk twenty minutes (to the Marina) and the same Vodka Tonic goes for double that. Why, logically, would anyone go there? For the same reasons one in Fuzhou chooses an “upscale” barber shop- to socialize with people of like status and network with them.

  10. joyce China said,

    July 9, 2007 at 11:58 pm

    well,i think 拌面扁肉 is more tasty than abalone~

  11. China Law Blog United States said,

    July 10, 2007 at 12:17 am

    Matt has it right. This same thing is true everywhere. The most famous example is the LaCoste logo. The guy who first developed it had a bunch of shirts lying around he could not sell, so he doubled the price and put on the logo and the rest is history. It is only in very wealthy societies that the rich can joke about shopping at Tar-je.

  12. martin China said,

    July 10, 2007 at 5:39 am

    jason the bar that u r talking its tuya??

  13. canrun China said,

    July 10, 2007 at 7:23 pm

    There’s pretty much no one I’d rather avoid more than a “bao fa hu.” (暴发户 )

    All the VSOP and XO, LV man-purses, Mild Seven and black Audis in the world will never buy…and has never…bought class.

  14. KOBE China said,

    July 10, 2007 at 11:41 pm

    Hi,Ben!I am new-comer,LaiZhiyuan.Last time,I called you to have lunch with me before I came back to my hometown-LONGYAN,which a area of FUJIAN.Welcome to travel here.I have read your this test,I want to say that the wealthy people is becoming wealther,the poor people is becoming poorer.SO the wealthy people can play more money in many places to show up their wealth and situation of the society.
    Do you have QQ?I think you must have it,becouse you are a people ,who is fond of communicating with other people.

  15. Laura Lee United States said,

    July 11, 2007 at 2:42 am

    There is one aspect where American wealthy people are showy, but in a good way — philanthropy. I did not mention other countries because I have only lived in China and the US.

    American gave a lot to charity and much of that is coming from individuals. I do not remember the exact number but a recent report said the total annual giving is about $300 billion (almost 15% of the Chinese GDP in 2006). Every year, BussinessWeek magazine runs a story on the biggest philanthropists in the US — how much they gave last year, how much total the have given in their life time, and how much of their total wealth they have given away. To my surprise, there are a group of people who have given away more than 90% of their wealth (Warren Buffet is probably one of such guys).

    Sadly enough I have not seen that Chinese rich guys start “competing” and “showing off” their wealth in this way.

  16. canrun China said,

    July 11, 2007 at 7:43 pm

    Here’s a link about charitable giving, for what it’s worth…

    http://www.msnbc.msn.com/id/19409188/

    My students have absolutely no comprehension at all why one would give his/her money away to a total stranger. Only sweep the snow in front of your own door, ya know…

  17. Laura Lee United States said,

    July 11, 2007 at 9:16 pm

    Sometimes, I am wondering why charitable giving is not so common in China, and not so common among the oversee Chinese people, either. Religion, culture, government/taxation policy?

  18. Alan United States said,

    July 11, 2007 at 11:34 pm

    Laura, I think most Chinese, be they overseas or in China or Taiwan, still live by the Chinese Golden Rule, namely, do not do unto others what you wouldn’t want others do unto you. I used to go to a Chinese church. Even overseas Chinese Christians still live by this Chinese Golden Rule instead of the Biblical Golden Rule. That’s why Chinese in general are rather passive instead of pro-active when coming to charitable causes. I am Chinese myself by race (I can’t say by culture) and my wife and I do give a lot to 3 of our favorite charities. One of them is for the cause of rescuing abandoned babies in China. The money given is almost 100% used in caring for abandoned babies. You all should do something like that.

    On another note, tax rules in China have some effects on charitble giving as well.
    http://www.chinagate.com.cn/english/choice/50280.htm

  19. Laura Lee United States said,

    July 12, 2007 at 12:27 am

    Want to share with everyone my own feeling about my own question posted earlier.

    I came to the States ten years ago as a student. I gave one or twice to the Hope Project in China (in the amount of RMB 200 or so) but quited doing it afterwards when the corruption in the Hope Project became public.

    As a student in the States with an annual income of about $15,000 from research assistantship, I never donated. Not only that, the thought of donating rarely occurred to me, either.

    After I started working, I use TurboTax to file the tax return every year. At the end of the filing, TurboTax typically runs a summary: how much your income is, how much you take deductible and from which categories (donation, mortgage, medical etc), and more importantly, how does your return compare to the average at your income level. I believe that the intention of TurboTax for doing this is to let you sense a potential problem before IRS calls you, because IRS will run a similar test to see if one takes unusually high deductible (as compared with his/her peers) and then decide if they would follow up with an audit.

    But the first time when I saw that summary, I was caught by a surprise on something else — my charitable giving in the past year is only about 10% of the average giving by the people at my income level. Before seeing the summary, I actually felt good about myself because I donated a few hundred dollars in the past year, and I was pretty sure I am the only among my hangouts who donated.

    Later on, one friend, who is an accountant, confirmed what I feared: the Chinese in the States have much lower charitable giving rate than other ethnicity groups, and this is particularly true for the first generation immigrants from China.

    I understand that charitable giving inside China is tricky. My brother and my husband’s brother both are doing quite well in Beijing — their incomes are supposed to be at the top 10% of population. I know they have almost never given. I do not think it is their fault.

    In today’s China, the social safety net is gone. Housing costs, children’s education and medical expenses are sky rocketing. They have to care for themselves, their family , plus the older generation (my parents, and parents-in-law). They have to save but are not sure how much would be enough. One can hardly think of giving when they themselves do not have a peace of mind.

    Corruptions are so rampant. How could you trust the organization to which you have given? I hardly know any organization in China today enjoys a reasonable degree of public trust for the purpose of charitable giving.

    But besides all these reasons, I am afraid that culture is definitely a factor. Why does the first generation Chinese immigrants in the States give far less than the other ethnicity groups?

    I am hopeful because some successful Chinese entrepreneurs in the States are turning the tide. Recently, the Electrical Engineering departments at the University of Southern California and University of Tennessee, respectively, are endowed by two Chinese-Americans (at the level of tens of millions). I hope that they will become role models for the rest of Chinese and Chinese-Americans.

  20. canrun China said,

    July 12, 2007 at 12:48 pm

    Laura,
    That was a very nicely-written, reasonable and insightful post. Some of the “fenqing” (愤青) at Time. com (http://time-blog.com/china_blog/) could benefit from your wisdom.

  21. Jet So China said,

    July 12, 2007 at 7:18 pm

    Just a thoughtful poem and an observation amongst this interesting discussion:

    Money can buy a bed, but not peace.

    Money can buy books, but not brains.

    Money can buy food, but not taste.

    Money can buy cosmetics, but not beauty.

    Money can buy a house, but not a home.

    Money can buy medicine, but not health.

    Money can buy luxuries, but not manners.

    Money can buy amusement, but not happiness.

    Money can buy companions, but not friends.

    Money can buy flattery, but not respect.

    Who on earth would want to talk business in a barber shop? Maybe your barber?

  22. Handan China said,

    July 13, 2007 at 4:23 pm

    It’s interesting to see how this discussion turned totally to charitable giving and how many great explanations have been suggested.

    I agree with the many comments above there that the line between showy and humble consumer behaviers doesn’t coincide with geographical boundaries.

    I’d like to add that showy consumers can actually be found among the not so affluent, or even the poor, just as frugal ones among the super rich.

    The thing is more about the underlying values and a sense of security.

    Money is typically overvalued by those who isn’t able to see the limit of it, as is nicely put in the verse above. Money is a necessory but not sufficiant ingredient in the recipe for happiness, class, good public image or anything. Even something as material as comfort takes more than money. I’ve observed many luxury yet uncomfortable couches and chairs, for example. People actually take them home for an insane price.

    On second thought, I realized the flaws of my assumptions that it’s comfort, happiness or class that those showy comsumers want. No. At the end of the day, all they want is FACE. Even when the claimed goal is showing, say, class, the ultimate concern is face. Class is just one trendy incarnation of face. Within a group of people who share the same worship of face and make the same association between wasting money and face, burning your money actually achieves your goal.

    Then there’s the problem with a sense of security. Psychological insecurity, which isn’t necessarily eased away by financial security, leads to excessively showy behaviors.

  23. Benjamin Ross China said,

    July 14, 2007 at 3:18 am

    There’s been a lot of interesting discussion on this post and charitable donations and I thought I’d take a minute to chime in with my 2 cents. I think one of the main reasons Chinese are reluctant to make charitable donations is related to their complex familial obligations. In the US, we are generally responsible for our immediate family. That usually just means children, and sometimes also can include a parent or sibling who has come under hard times. In China, the familial responsibilities often extend far further than the immediate family. One family member who strikes it rich is often expected to “pay out” to aunts, uncles, cousins, etc. who are not doing as well. This is especially the case here in Fujian where you will often find 10 or 20 people being supported off of the income of an uncle who runs a restaurant in New York City. Because the financial responsibilities to family are so much greater and more interconnected in China than they are in the US, a wealthy Chinese will usually have considerably less income to give away than an equally wealthy American.

  24. LT China said,

    July 15, 2007 at 10:55 am

    I’m not saying you’re wrong about your interpretation of this situation, or that the comments by other Chinese and commenters about this behavior are incorrect, but there’s definitely another side to the story.

    Although some of the “snobbish”, “rich” Chinese patrons are paying high prices for the prestige, etc., some also pay in a simple effort to get away from some of the crass behavior of other Chinese.

    Some Chinese, actually quiet a few, also do not like the spitting, smoking, loud talking, non-air conditioned, uncleanliness and poor service more often found in an inexpensive local shop.

    They pay the higher prices to get away from it all, just like a foreigner tucking into Starbucks for decent a/c and a clean bathroom.

    You’ll notice that when a place charges high prices but still allows behavior like smoking, loud talking, and has poor service, that the patrons will be few . Ever wonder why KFC is so packed? It’s because it’s a safe place for the kids to play, it has A/C, clean bathrooms, nicely lit, they enforce non-smoking, and it’s clean. People focus too much on comments about the food, you don’t think Chinese can get better food elsewhere? Common!

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