Daigou is a network of Chinese shoppers that buy a good in bulk to resell to customers in China. Literally translated, daigou means “buying on behalf of”. Daigou is much more widespread than you might think. Several cities around the world, such as New York City, Seoul, Tokyo, Paris, and London, consistently receive a significant number of daigou transactions.
Australia has had a problem with daigou clearing out shelves of baby formula and vitamins. Now, daigou are also buying Australia’s fresh food because many consumers in China don’t trust local food.
Daigou shoppers have purchased so much of Australia’s baby formula and vitamins that some of those sections in Australian supermarkets were completely empty. Due to customer complains, some grocery stores like Woolworths established quantity limits.
Baby formula and vitamins are still in high demand despite the limits. Recently, Australia’s fresh food, including seafood and fruit, has become popular among Daigou shoppers. Chinese consumers don’t trust local food because of food safety scandals, so they are seeking out trusted foreign produce.
Is it really worth it for daigou to buy goods in a foreign country, take them back to China, and resell them there? Surprisingly, it really is because consumers in China are willing to pay high prices for certain foreign products. For instance, one tin of Bellamy’s organic baby formula is sometimes sold as high as $84 AUD in Shanghai.
Sydney Morning Herald has interviewed some diagou shoppers in Australia. Sophie He, a Sydney-based daigou, told them that she ships as much as 60 tins of baby formula and 40 bottles of vitamins to China on a weekly basis. Many other daigou report making a living just from reselling foreign goods to China.
As a daigou earns trust, word of mouth marketing attracts more customers. Daigou can accumulate a solid customer-base this way. It’s a good deal for daigou. However, similar to what happens in Hong Kong, and elsewhere, some Australian consumers are not so happy with their business. It’s frustrating for them to see shelves cleared out in supermarkets.
With every problem or consumer pain point, there is a business opportunity. For example, you could set up in China to sell in-demand foreign goods there. This would solve their problem of paying a higher price and waiting on shipping. It would also make Australians happier as well because it would ease the strain on their supermarkets.
Contact us for assistance in setting up a business in China. There are many confusing Chinese laws and regulations you must know about to stay in business.
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