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Why Chinatown Produce Is Cheap (2016)

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11–20 of 415 posts

Re: Why Chinatown Produce Is Cheap (2016)

#11

Fascinating. I'm wondering if there's an opportunity for a tech startup to replicate this network more generally. I could see the network connecting the sellers with the farmers directly, plus coordinating delivery of the veggies... it's an easier problem than ubereats delivery as you've got fewer nodes. Maybe you even skip the sellers entirely, which basically gets you to CSA boxes but those always felt expensive to…

Definately. There are people operating these businesses locally and regionally. The problem is finding a endpoint who wants to buy it at wholesale.

The problem is that like anything in corporate American business models, scaling up doesn't always scale. As groceries have consolidated, you need to focus everything on industrial agriculture to deliver a consistent product.

So as a society, we do stupid things like growing lettuce in the desert and flying it across a continent while fertile land down the road goes fallow. But when you have 5,000 wal-marts to stock, it makes more sense to focus on a few big suppliers than a bunch of little ones. I purchased lettuce in February grown in upstate NY in the middle of winter -- for 50% less than stuff in the market.

It's one of the massive inefficiencies that drives me nuts about the current American mutation of capitalism.

Re: Why Chinatown Produce Is Cheap (2016)

#12
post #6

This feels like the proverbial dollar left on the street that economists say should not exist, so I'm racking my brain trying to figure out what's stopping chains from replicating this. I wonder whether this alternate network is as scrupulous about source tracking and food safety regulations. Those costs could be driving up prices on the traditional retail side.

> Markets also cut costs by eschewing extra technology and certain aesthetic choices—the Journal points out that shelves “are typically made of plywood and lined with newsprint,” prices are scrawled on cardboard instead of printed on stickers, and credit cards are not always accepted.

Some people don't want to buy food with cardboard signs and cash.

Hell, I've heard California even has people who are fans of convenience so much they will pay for other people to do the grocery shopping.

Re: Why Chinatown Produce Is Cheap (2016)

#13

Fascinating. I'm wondering if there's an opportunity for a tech startup to replicate this network more generally. I could see the network connecting the sellers with the farmers directly, plus coordinating delivery of the veggies... it's an easier problem than ubereats delivery as you've got fewer nodes. Maybe you even skip the sellers entirely, which basically gets you to CSA boxes but those always felt expensive to…

In my opinion this model works & keeps prices low, there is nothing to disrupt here. Similar like the Indian Dabbawala network.

The Dabbawala System: On-Time Delivery, Every Time http://www.hbs.edu/faculty/Pages/item.aspx?num=38410

https://en.wikipedia.org/wiki/Dabbawala

Re: Why Chinatown Produce Is Cheap (2016)

#14
post #6

This feels like the proverbial dollar left on the street that economists say should not exist, so I'm racking my brain trying to figure out what's stopping chains from replicating this. I wonder whether this alternate network is as scrupulous about source tracking and food safety regulations. Those costs could be driving up prices on the traditional retail side.

> what's stopping chains from replicating this

Probably volume. Chinatown is extremely dense and has such high foot traffic that it makes sense to operate without refrigeration, with goods stocked from neighborhood warehouses.

Most parts of the country don't have anywhere near that level of density, so the economies of scale wont work out like they do in Chinatown.

Re: Why Chinatown Produce Is Cheap (2016)

#15
post #3

The amount of secret networks and deals Chinese/Chinese Americans pull off is astounding. I don't mean that in a negative way, I'm mostly impressed (I live near Brooklyn's Chinatown).

I wouldn't say it's "secret," it's just regular business conducted using a language most Americans can't read or understand. Probably even in dialects that most Chinese people can't speak.

If the social technology in these networks is better (produces both cheaper, better quality product) then there is money to be made copying it/adopting it.

Re: Why Chinatown Produce Is Cheap (2016)

#17

Fascinating. I'm wondering if there's an opportunity for a tech startup to replicate this network more generally. I could see the network connecting the sellers with the farmers directly, plus coordinating delivery of the veggies... it's an easier problem than ubereats delivery as you've got fewer nodes. Maybe you even skip the sellers entirely, which basically gets you to CSA boxes but those always felt expensive to…

tech is just another middleman looking to squeeze a billion+ dollars out of the industry, so I don't see how they'd be any different than Hunt's Point.

Re: Why Chinatown Produce Is Cheap (2016)

#18

Where does the food in these secret warehouse networks come from? Is it actually equivalent in quality and oversight to the "mainstream" farm networks?

Mostly smaller producers. It's more profitable for them to sell to the smaller Chinese wholesalers, and its more cost effective to you because of fewer middlemen.

Re: Why Chinatown Produce Is Cheap (2016)

#19
post #3

The amount of secret networks and deals Chinese/Chinese Americans pull off is astounding. I don't mean that in a negative way, I'm mostly impressed (I live near Brooklyn's Chinatown).

Are they particularly secret, or just filtered through social networks?

Re: Why Chinatown Produce Is Cheap (2016)

#20

Cheaper and better? That defies efficient markets theory. I guess any sufficiently advanced social network is indistinguishable from magic.

Could it be that they just don't have the cruft & boilerplate & inefficiencies that traditional retail has? Having been in several types of workforce, I've seen plenty of missed opportunities that continued indefinitely because of management incompetence, so I wouldn't doubt it if they're able to have high quality & cheap produce just by cutting out the middleman and by being competent.
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