Daigou: An export Industry

Several gift shops on Hurstville's street. (Photo: Shuyan Xu)

Walking between the shelves of a supermarket, taking pictures of the goods held in their hands, quickly buying a rich selection of goods which have been listed on the paper and shooting micro-video of the process; it may not be uncommon for Australian customers to see such strange behaviours in a special group.

“We are the eyes and hands of domestic Chinese. We are daigou,” says Emma Lou.

As an overseas student studying in Australia since high school, Emma has been doing daigou for two years.

Daigou originally referred to the behaviour of overseas purchasing agents’ buying commodities for domestic Chinese; now it is more likely to be used to describe the buying agent groups.

Since foreign products are very expensive in China – for instance, the selling price in China is usually several times than the price in the country of origin – people are more willing to rely on someone living abroad to help them buy merchandise. With the growth of demand, this kind of personal behaviour gradually turns into a daigou industry.

“Australia is known as the paradise of daigou, almost every student is doing daigou or familiar with several daigou around her/him,” Emma said quite definitely.

Australian daigou is one of the most special and biggest agent groups. Different from daigou in other western countries, they buy native products such as Blackmores and UGG instead of luxury items. Besides, there is a very large number of the individual daigou in Australia, based on the large population of overseas students and immigrants; for instance, in July 2005 more than 4670 daigou post advertisements on social platforms to sell 851,700 Australian products.

An overseas daigou, Emma, showing her normal business. (Video & Music: © Shuyan Xu)

WeChat, the bridge of daigou

“My friend told me she could earn more than $2000 a month by doing daigou,” Emma explains how she becomes a daigou. “She makes a profit just by shopping. Why can’t I?”

Normally the student visa allows these overseas Chinese students to work 20 hours a week during the semester, but time restrictions, academic pressure and irregular dues make it harder to do other part-time jobs. Hence, doing daigou will be a good choice for them.

“It is easy to start a business, as long as you own the WeChat application on your phone.”

The daigous will normally take photos about the productions and express waybill together to make customers believe them. (Photo: Shuyan Xu)

Emma introduces three platforms for daigou, Wechat, Weibo and Taobao, “WeChat is the easiest one. Shoot your student’s ID card, send micro-videos or a position to prove you are actually living in Australia. If the customers trust you, they will add you as a WeChat buddy.”

“I followed several other daigou on WeChat at the beginning, and I also checked the prices on Taobao and Chemist Warehouse before I priced the product. As the prices are not the same from different daigou, as well as the time, they depend on you, not your customers.”

Health care products, milk power, UGG are the target products, occasionally there will be other products, such as baby accessories. Daigou promotes advertisements of these commodities on WeChat Moments.

Package rules change (Screenshot: Mandy’s Wechat)

“I will inform my customers one week before I’m free to go shopping. My classmate in China will do customer service for me if I am busy with my coursework,” Emma indicates. “Since Australian direct mail requires that the receiver should upload identity cards to the customs, and some customers are worried about revealing their own information, I will send the products to my classmate and she will send them to these customers.”

Conventionally, customers transmit the payment on WeChat before the daigou go shopping, so the only risk of daigou is the taxation of China customs.

“If China customs affirm you are doing a business, they will collect taxes. Gift shop staff is very experienced and these international expresses also have provisions, such as the Chang Jiang International Express, each package can only accommodate seven items, and the amount will be cut to six if there are cosmetics or body supplies, which will minimise the risk.”

“There are too many daigou in Australia; we are the grain of sand in this dazzling industry,” Emma says.

Unique landscape: Chinese gift shop

Also, Australia’s distinctive “Chinese gift shop”, which incorporates almost all the popular products Chinese customers prefer and the international postage, gives these daigou more convenience. With the price advantage and Chinese service, many daigou will choose to go to China gift shop.

“In fact, we are also daigou but with a physical store,” says Mandy Liu. Mandy is an immigrant who’s been living in Australia for nine years with her husband. She runs a Chinese gift shop called Micro-natural in Rockdale.

The composition of the daigou industry. (Graphic: Shuyan Xu)

“In addition to overseas students, our Australian customers include some housewives or people with a job but are not willing to pay more taxes since they earn CNY as their income which won’t be calculated in salary by the Australian government.”

“The industry of daigou is ripening gradually; agents in China will get the preferential prices from us or other daigou to earn the differences of prices.” According to the Daily Mail, Australia is losing $1,000,000,000 in tax revenue every year due to the daigou industry.

“Our supplies of products are from local suppliers with the same quality of supermarket or pharmacy.”

In Australia, there are thousands of Chinese gift shops like Micro-natural, especially in Burwood or Hurstville where Chinese people are gathered.

Future: a thriving business or a dead end?

Announcement: the price of milk powder is increased. (Screenshot: Mandy’s Wechat)

Recently, with more stipulations in local supermarkets showing more strict regulations coming out of General Administration of Customs of the People’s Republic of China (as shown on this Chinese language site), inflation of prices of suppliers and unstable exchange rate, will daigou be an emerging industry or come to a dead end?

Mandy says Customs also want a piece of the pie, but there are counter-measures under the policies, “Since March, we have to pay $10 for each UGG as the tax. However, if the shipping address is in Chongqing province, then the tax is $3.”

According to the current situation, the income is considerable in short-term for individual daigou.

Mandy forecasts, “Facing the risk, the profit margins of daigou industry will be sharply reduced after another fifteen to twenty years. Nevertheless, the market is still short on supply now; it’s the seller’s market after all.”

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