Specialized Markets in China
Chapter 7: Producer–Distributor Relationships in Yiwu Market
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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