Recently, there is a craze for Xiaomi products. Xiaomi's electronic products are characterized by low cost but good design. Until recently, cost-effectiveness is the most familiar keyword in the consumer market. It has the advantage of focusing on the price-performance of goods, but it excludes the psychological sense of security, even when the product is cheap. That’s the meaning of ‘placebo consumption’ a new economics term in 2018.
Even if the price is high, Placebo consumption suggests that consumers can buy it without hesitation if they can get 'satisfaction of heart' greatly. An example is handbag shopping. Louis Vuitton, Gucci, and so on. The price of luxury handbags is about the same as the value of one car, due to the psychological stability provided by the design and quality of the handbag, the transaction volume is quite high.
The term comes from medical science, where ‘the placebo effect’ was based on a patient’s trust in their doctor. When the doctor told them medicine would help them, the patients felt better even though the medicine was fake.
This also applies to cheap products too. And another consumption trend called 'cost-psychological stability'. It is a form of personal consumption that prioritizes your emotions, even though there is considerable inefficiency in consumption. A typical example is idol products, which sell at a higher price than the same quality products, but have more value and meaning because the idol brand value.
It is the consumer's choice to pay a lot for something that makes them feel good, or they believe that a feeling offsets paying too much for something cheap. However, new forms of consumption trends can fill the parts of the cost-effectiveness that can not be satisfied emotionally. Therefore, it is necessary to be formed between the cost-effectiveness consumption type and the cost-psychological stability., and to form a desirable consumption attitude which is not deviated to either side.
