Local Pricing Structure

While living in or visiting Shanghai, it won’t take you much time to realize there is a multiple tiered pricing structure on just about every thing that you can pay money for. From DVDs, to apartments, to food, to car rentals, just about anything. It breaks down as follows, starting with most expensive first:

  1. Expat Price – this is the price you pay if you get your services and goods through agencies that specialize in expats. Typically, prices are quoted in US dollars.
  2. Foreigner Price – if you do it on your own, but you’re not Chinese, this is what you’ll pay. Your bargaining power is severely limited by this factor.
  3. Chinese Price – most people play down at this level. You normally get good prices assuming you haggle. If Mandarin wasn’t your mother-tongue, people can tell and may set a higher floor.
  4. Shanghainese Price – the cheapest of them all. If you can talk the local language, the prices will likely start cheaper and can be bargained even lower.

To give you an example, ads for satellite TV in brackets 1 – 3 are two times higher than the starting price for a Shanghainese person. I also heard a story over the weekend of somebody who was renting a car, and the sales person started the price at half of what we offered the non-Shanghainese person standing next to the two. An ayi (maid) will cost 2x as you move from the bottom to the top of the price ladder.