Mon, Aug 15, 2016 page14

• China’s ‘daigou’ rebooting Australian retail

  • Reuters, SYDNEY
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  In 2013, student Na Wang began shipping fish oil capsules from Sydney to China to help pay the rent. Now, she is in business, part of a growing army of Chinese shopping agents sending Australian food and diet pills home to feed rampant demand.

  Wang, 33, is one of up to 40,000 Chinese daigou (代購) in Australia, retail consultants said, using social media and mobile payment apps to buy goods to order for Chinese customers. While daigou first made waves in the West shipping luxuries from Europe like Gucci handbags, the new Australian breed deals in “white gold” — baby milk formula — and other consumer staples.

  More affluent, health-conscious Chinese shoppers want safe Australian goods, a trend stoked by tainted China food supply scandals. This year, brands like formula maker A2 Milk have begun exploring ways to harness the growth of daigou, rather than compete with them, targeting cross-border e-commerce that is predicted by consultancy ThinkChina (國泰思科) at US$1 trillion this year.

  

  Chinese daigou shopping agent Na Wang selects an Australian breakfast cereal popular among Chinese consumers during a shopping trip to procure goods for Chinese customers, at an Australian supermarket in Sydney, Australia, on Aug. 2.

  Photo: Reuters

  “People in China just love Australian products,” said Wang, boxing up an order of Maca Plus, a powder said to boost libido, and detox treatment Fatblaster Coconut.

  “They like the quality,” said Wang, an economics graduate from Shandong Province still studying English as she looks for a job. “Nothing is expensive for them.”

  It is not all plain sailing for daigou, in China or in Australia. In April, Beijing tightened rules on cross-border online shopping, though in Australia shoppers like Wang say orders have not been hit.

  Meanwhile, at the height of a boom last year in demand for milk formula from China, triggered by a food safety scandal, daigou attracted criticism in some Australian media for vacuuming up supply and leaving domestic shoppers empty-handed.

  However, the scale of the new trade has alerted retail brands to potential new sales via daigou tie-ups that might otherwise be beyond the reach of mid-tier consumer goods makers.

  “Everyone’s working on it [daigou tie-ups] now, including all the big brands,” ThinkChina director Benjamin Sun (孫浩志) said. “If you think about global markets, what Australia can offer to Chinese online consumers is food, supplements and dairy, not so much fashion and luxury goods.”

  Daigou — meaning “on behalf of” in Chinese — establish a network of prospective customers on popular online messaging app WeChat (微信), owned by Internet giant Tencent Holdings Ltd (騰訊).

  Some, like Wang, even broadcast their shopping live via WeChat’s video service to show buyers the products are genuinely from stores in Australia, not counterfeit Chinese goods.

  Wang and her daigou competitors typically charge premiums of about 50 percent above the sticker price on Australian store shelves, but even allowing for shipping fees, that still means the buyer pays much less for the same product in a Chinese store — assuming it is available.

  A bottle of 200 capsules of Blackmores Ltd’s Fish Oil is available in Chinese stores at three times the Australian retail price of A$26.50 (US$20.27).

  Blackmores said about 40 percent of sales came from China — both direct exports and via daigou — but declined to comment on dealings with daigou.

  Waiting for shipments are buyers like Lu Jiwei, a 30-something software worker from Dalian, China. Lu buys about once a month from three or four daigou suppliers, stocking up on Australian dairy, wine and nutrition products.

  “It’s a bit more expensive, but not too much more to buy through daigou versus buying Chinese products,” Lu said. “Mainly it’s to do with food safety concerns. Food safety standards here are perhaps a bit lower and then you have got the source of milk because in China it is more likely that it will be affected by air pollution.”

  The difficulty of doing business in China for smaller would-be exporters has led consultants specializing in Chinese markets to increasingly advise Australian companies to team up with daigou.

  Peter Nathan, chief executive of A2 Milk, a New Zealand infant formula maker that also produces in Australia, said the firm was looking at ways to work more closely with daigou.
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