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 7: Producer–Distributor Relationships in Yiwu Market

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: The author. Figure 7.1 Processors of threaded beads in Jindong, Jinhua 7.1 INTRODUCTION As stated in Chapter 1, beneath the shell of the market platform, the producer–distributor relationships in a wholesale market in most developing countries are merchant mode. Traditional wholesale merchants dominate the booths in the markets, and the producers are required to sell products through the intermediation of these merchants (Figure 7.2). Compared to these markets, Yiwu Market started as a merchant mode market, but is increasingly transforming into a pure market platform. 113 M2920 – DING 9781781006276 PRINT.indd 113 20/06/2012 13:15 114 Market platforms, industrial clusters and small business dynamics Buyer Merchant Buyer Producer Merchant Producer Buyer Buyer Wholesale Market Notes: = Flow of transactions. = Flow of purchasing. Source: The author. Figure 7.2 Producer–distributor relationships in wholesale markets in developing countries Factory Merchant Buyer Buyer Producer Booth Buyer Buyer Organizing Agent Merchant Buyer Buyer Yiwu Market Notes: = Flow of transactions. = Flow of factory operation, booth operation or purchasing. Source: The author. Figure 7.3 Producer–distributor relationships in Yiwu Market Within Yiwu Market, the boundary between producers and merchants is becoming ambiguous. Merchants actively take part in the production process and producers are able to develop their own marketing means (Figure 7.3). An examination of the factors that cause changes in producer– distributor relationships in Yiwu Market will be extremely helpful in understanding the mechanism through which the market platform mode and the merchant mode inter-transform in developing countries. There are three types of industrial clusters...

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