retail trends: leveraging the Chinese 'daigou' shopper opportunity
by: Sarah Kneebone
“It’s happening everywhere at the moment, it’s a real movement. Companies like Bellamy’s, a2, Swisse and Blackmores are absolutely cleaning up." (Simon Hansford, Milk Powder Australia)
What exactly is happening here?
“The Chinese have always had blind adoration for foreign things. So rather than paying for expensive, made-in-China products that might lack safety, why wouldn’t they buy high-quality Australian ones at lower prices?” (Uki Shao)
You may be thinking: “Hold on, why are these big brands not skipping out the middle man and selling directly to China?”
Big Problem 1: Trust.
How can Aussie businesses benefit?
SBS recently cited Livia Wang (a marketing expert from AccessCN), in saying that
Connect with the Chinese consumer
(Damien Gance, Chemist Warehouse).
Use technology to open the door
Australian trade as a whole
Of course, with any relatively unchartered territoriy, there are risks.
Some daigous are evading tax and chinese import duties, and on a student visa in Australia, they should technically only be working for 20 hours a week.
There is also the fact that Australian locals have been getting frustrated with out-of-stock products as purchasing agents come into stores and scoop up all the infant milk powder to sell on.
However, this is starting to be combatted by new 'daigou stores' that are popping up to serve the demand from these specific consumers.
The new retail model?
Daigou stores sell a smaller range of products at a much higher price than the supermarkets - and they're making millions.
One public relation agency estimated there are between 1,200 to 1,600 small daigou stores that offer "pack and send" services in Australia.
"The model provides a regulated channel to the Chinese consumer and circumnavigates the need for individual daigou shoppers." ABC News.
This could be a fantastic opportunity for Australian brands moving forward.
However, if Chinese entrepreneurs saturate the market and individual, trusted daigou relationships are replaced, could mass commercialisation undermine the whole business model?Over to you