Market Platforms, Industrial Clusters and Small Business Dynamics

Market Platforms, Industrial Clusters and Small Business Dynamics

Specialized Markets in China

Ding Ke

Specialized markets are a unique product of China’s economic transition. They are marketplaces located in industrial clusters, specializing in the wholesale of local commodities and related goods. Ding Ke reveals that, despite their seemingly primitive form, specialized markets appeared in many of the modern industrial sectors and were paradoxically upgraded and expanded as these clusters developed. He argues that specialized markets have also formed solid linkages with marketplaces in various cities in China and in other developing economies. A powerful, emerging market-oriented distribution system has thus appeared. Based on thorough fieldwork covering ten years, and using the novel theory of the platform, this book clarifies the unique development logic of specialized markets.

Chapter 1: Specialized Markets and Small Business Dynamics in China

Ding Ke

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, development economics, industrial economics, urban and regional studies, clusters


Source: Copyright © 2011, Yoko Iwasaki. Figure 1.1 Bazar-e Bozorg in Tehran, Iran 1.1 THE SMALL BUSINESS MARKETING REVOLUTION IN THE SPECIALIZED MARKETS The key factor for SME development is how to access the market. In general, small producers are required to sell products to a distant market through the intermediary of “merchants.”1 Within the specialized markets, however, the producers, for the first time, are indeed able to transact directly with distant market buyers, and have realized qualitative developments. This chapter will indicate in what way the appearance of 6 M2920 – DING 9781781006276 PRINT.indd 6 20/06/2012 13:15 Specialized markets and small business dynamics in China 7 the specialized markets is revolutionary for SME development by means of a search of the literature concerning SMEs and the markets. We first conduct a horizontal comparison with other countries. With regard to the developed countries, it has been clearly pointed out by Itami, Matsushima and Kikkawa (1998) that in order to respond to rapidly changing and highly segmented demand, small producers generally link with the market through demand carrying firms. These firms are likely to be distributors or assemblers in the manufacturing sector. They may be located either inside the cluster or near the market. In general, however, these are large firms and their number is stable. They play an irreplaceable role in connecting the industrial cluster and the distant market.2 A similar situation can also be observed broadly in the developing countries. According to Hayami (2006), in the rural areas of...

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