Of Baby Formula And The Chinese Economy

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The author of Freakonomics, Steven D. Levitt, has a blog that deals with examples of “Freakonomics” beyond the book.

This particular incident concerns his recent trip to China.

I thought I had observed the most extreme case of excess labor when I went to buy a can of formula for my daughter Sophie in a large grocery store in Nanchang. As I searched the aisle for the exact type of formula she had been using in her orphanage, four young woman very eagerly attempted to help me. At first I thought they were just shoppers trying to aid me. Eventually (they didn’t speak English and I knew about 50 words of Mandarin) I realized they were working. Four of them huddled around me for roughly 10 minutes before I finally purchased $4 worth of formula. It made absolutely no sense to me.

Only later, back at the hotel, did my Chinese guide explain what was going on. (If you want, pause here before reaading here and see if you can figure it out — I couldn’t).

The answer: these women weren’t employees of the grocery store, they were hired by rival formula companies to try to direct customers to their particular brand of formula! Which explains why they were all so cheerfully and persistently suggesting so many different kinds of formula to me…the store didn’t care what kind of formula I bought. A sale was a sale. But to the formula manufacturers, stealing business from the rival brands was worth paying an employee to do.

Talk about customer service. Whoa.

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