Daigou: China’s trustworthy personal shoppers

  • News
  • April 20, 2017
  • Jai Breitnauer
Daigou: China’s trustworthy personal shoppers

As part of a feature on the role of trust for NZ Retail magazine, we looked at the phenomenon of daigou - personal shoppers who seek out products overseas for buyers in mainland China.

In September 2016, the Daily Mail pubished a story about daigou in Australia making AUS$1 million a week. Whether those figures are – ahem – accurate I couldn’t say, but the phenomenon of daigou is real.

Daigou literally means ‘buying on behalf of’. They are often students studying abroad, and they send parcels back to China as personal items to avoid tax. Convenience and the chance to make a buck on the side isn’t the main reason for the existence of daigou, though. The main reason is trust. The items purchased are usually luxury items commonly counterfeited in China, or overseas health and wellbeing brands viewed as more authentic and reliable.

China has suffered a long list of PR disasters around its largely unregulated food industry that have fuelled daigou growth. In 2008, contaminated formula milk affected 294,000 babies, leaving six dead. In 2010, a factory was shut down for dyeing soy beans with food additives to pass them off as green beans. In 2014, it was discovered a carcinogen, CH3NaO3S, was being used by many companies to bleach food. The trust of the Chinese consumer has been sorely abused by local industry in China.

Xiuzhong Xu of website theworldofchinese.com tracked down a Melbourne-based daigou selling baby formula at a 200 percent mark-up. Such is the keenness of the Chinese shopper to have an authentic, untainted and trustworthy product, this sort of price inflation is common, and pays for the daigou’s time and services. The daigou Xu spoke to said she made AUD$2000 in her first month, and her profits along with her customer base have grown since.

However, the trust of the daigou’s buyer is hard-won. Sometimes the woman Xu spoke to has to live stream video of her purchasing a product through WeChat to prove authenticity. Chinese shoppers are willing to pay through the nose but they have to be sure it’s for the real deal.

Companies in Australia have attempted to thwart daigou by imposing restrictions on purchase, but experts here believe retailers should consider how the daigou fit into their business. According to a 2016 report from Bain & Company, the daigou industry worldwide was worth around NZ$10 billion last year.  

Speaking at an NZTE event in December about how to leverage the daigou channel was Livia Wang, director of Sydney-based Access CN. Wang’s company aims to help Australian and New Zealand brands break into the China market and she believes daigou are key.

“New Zealand brands are popular via the daigou route,” says Wang, noting how the Chinese market likes a story of provenance. “Think about your brand story, it’s very important, and involve the daigou – ask yourself what’s their position in your journey? Influence them to speak about your products.”

Wang suggests inviting 10 daigou to trial your products, to get feedback and  encourage them to talk to their customer base about you. She encourages retailers to take the daigou into consideration and make their job easier so they will shop with you.

Other businesses are trying to circumvent daigou altogether. In September 2015, Australian company Chemist Warehouse made a deal with Chinese company Alibaba to sell its products directly to Chinese consumers through Tmall, Alibaba’s ecommerce site. But for the ever-suspicious Chinese consumer, it is going to take time to trust this new route. Even though the products are shipped direct with no Chinese middle-man, reviews left on Tmall show customer concerns over whether the product is genuine, with suggestions the packing ‘looked a bit different’ or the smell of the product ‘wasn’t quite right’.

The complicated trust relationship between retailers, brands and consumers is nowhere else better quantified than in the daigou example.

This story originally appeared in NZ Retail magazine issue 748 February / March 2017

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Barkers opens its first experience store

  • News
  • October 19, 2017
  • Sarah Dunn
Barkers opens its first experience store

Kiwi menswear retailer Barkers has taken a cue from overseas retailers like Bonobos and opened a physical ‘guide shop’ location where shoppers can experience their products before ordering online. The outlet, Good Company, also offers food and beverage opportunities, plus grooming.

Read more
 
 
 
 
News

Shine on: Introducing the Top Shop winners

Even the most extravagant window display had nothing on the glittering splendour of Retail NZ’s 30th Top Shop awards. A wide range of industry participants, ...

 
topics
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
Sisterhood
Women in retail help one another. We spoke ...
All things to all people
Kiwi retailers share their omnichannel strategies.
How to open a store
Sarah Dunn considers what it would take to ...
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Paul Keane on the Bayfair expansion

  • Opinion
  • October 17, 2017
  • Paul Keane
Paul Keane on the Bayfair expansion

RCG's Paul Keane looks at the $100 million Bayfair expansion project and why it will the help the centre avoid the risk of further erosion and stiff competition.

Read more
 
 
 

Retailers must make sure their products are safe or face consequences

  • News
  • October 16, 2017
  • Sarah Dunn
Retailers must make sure their products are safe or face consequences

In the wake of a court case that saw dollar store retailer The 123 Mart fined $337,000, resulting ultimately in its liquidation, the Commerce Commission wants to remind retailers that they have a responsibility to make sure the products they sell comply with all relevant safety and consumer information standards.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email marlene.coote@tangiblemedia.co.nz or call 09 358 7297 / 027 544 2298

View Media Kit

}