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Fun article, but it suffers from the usual abject lack of understanding of how markets work associated with this kind of critique. The information one should t
by wyager 9y ago
Fun article, but it suffers from the usual abject lack of understanding of how markets work associated with this kind of critique.
The information one should take from this story is that watches on Alibaba are undervalued, or that the user-unfriendliness of Alibaba imposes a high per-transaction cost. By selling Alibaba stuff for 5x the original price, these businesses are communicating valuable market information; namely, that there's something wrong with Alibaba (could be accessibility/usability/trust/etc.) or that these companies provide a valuable service that may not be obvious (translation of descriptions to readable english, for example). If these companies took the "moral" (emphasis on scare quotes) approach of selling cheap watches at a smaller markup, this information would not be communicated and the world would be slower to respond.
- toastking 9y agoIt could also be that branding is important and that by selling on their own website their viewed as more unique. Though that could also point to a flaw in the design of AliExpress that it doesn't allow for good branding on it's seller pages.
- djrogers 9y agoYou're missing the part where the watches pictured on the websites are originals with the logos taken off, while the customer actually gets a cheap knockoff...
- wyager 9y agoYes, that part is fraud, but the linked PDF spent vastly more time complaining about the markup.
- bartread 9y agoYou've also missed the point that people are paying $12 for watches that are arguably junk not even worth $1.
- skybrian 9y agoI think that analysis only applies in standardized commodity markets where you get where you pay for. If someone is willing to pay X for Y shares of a stock and they got sold something else, what information does that convey? Mostly that an opportunity exists for fraud, if they get away with it. In lower-trust environments, standard and not easily adulterated products are worth more, and that's how brands got started.