Daigou

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Daigou smuggler
Occupation
NamesDaigou, "overseas personal shopper",[1] "professional shopper"[1]
SynonymsHaiwai daigou
Occupation type
Profession
Description
Fields of
employment
Self-employed

Daigou (Chinese: 代购[2]; pinyin: dàigòu; lit. 'Surrogate Shopping')[1][3][4] is a term for an emerging form of cross-border exporting[5][6][7][2] in which an individual or a syndicated group of exporters[6] outside China purchases commodities (mainly luxury goods, but sometimes also groceries such as infant formulas) for customers in China.[1][8] Daigou shoppers typically purchase the desired goods in a region outside China, after which they post the goods to China or carry them in their luggage when they return to China. The goods are then sold for profit in China.

Daigou activities can be conducted illegally,[9][10] or legally,[11] using loopholes to circumvent import tariffs imposed on overseas goods.[12]

Sales[edit]

Daigou sales across sectors total $15 billion annually.[13] In 2014 the value of the daigou business just in luxury goods increased from CN¥55 billion to CN¥75 billion yuan (US$8.8 billion to $12 billion).[10]

Daigou purchases are often made in luxury brand boutiques in major fashion cities like London, New York City, Paris, Hong Kong, Singapore, Seoul and Tokyo. Some daigou operators use Weibo and WeChat to communicate with their clients.[14] The large demand for daigou service is due to perceived high import tariffs on luxury goods[14] and concern over unsafe products, especially food safety problems,[15] Daigou shoppers can provide assurance that the products which consumers in China order are genuine and safe to use. Shoppers often have personal connections with the people in China who order from them.[16]

A 2015 survey of Chinese online luxury shoppers found that 35% have used daigou to purchase luxury goods online, while only 7% used the website of the brand they are buying, or think they are buying.[17] Approximately 80% of Chinese luxury purchases are made abroad.[18]

Negative impacts[edit]

Daigou syndicates can be involved in hoarding and stockpiling of goods in large quantities, often infuriating local customers for the shortage of goods and disruption incurred to the markets.[19][20] This has also prompted several governments to take actions against Daigou smuggling and hoarding. Starting from 2012, the New Zealand government has been regularly cracking down and sometimes outright banning unauthorized export of consumer goods through unregistered channels.[21] Australian retailers have imposed multiple restrictions on Daigou purchases of baby formula.[22][23]

Some Daigou service providers fraudulently sell counterfeit products that have been altered to appear purchased abroad from legitimate sources.[24]

Responses from China[edit]

On January 1, 2019, China officially rolled out a new e-commerce law, the first of its kind to directly regulate Daigou activities. Under the new law, all Daigou participants will be legally required to register as e-commerce operators and acquire licenses in both China and the country where they shop, making their business subject to taxation in both China and the region where they purchased goods. Any e-commerce platform and seller could be fined 2 million yuan and 500,000 yuan respectively, and possibly face criminal charges, if they are found guilty of smuggling, tax evasion and willful violation of the new e-commerce law.[25]

See also[edit]

References[edit]

  1. ^ a b c d Parker, Pamela (16 March 2018). "How to become a professional shopper". BBC.com.
  2. ^ a b Hunt, Katie (August 19, 2014). "Shoppers or smugglers? China cracks down on 'daigou' boom". CNN. Retrieved August 29, 2014.
  3. ^ Owens, Susan (July 1, 2015). "FROM DAIGOU TO DIGITAL: LUXURY EXECUTIVES WEIGH IN ON BIGGEST CHINA CHALLENGES". Jing Daily (精日传媒). Retrieved 28 October 2016.
  4. ^ Lee, Terence (November 16, 2012). "Daigou, a novel e-commerce business model, is an intriguing Chinese export". businessoffashion.com. Retrieved October 28, 2016.
  5. ^ "Six arrested in Australia over baby formula smuggling ring". The Irish Times. January 22, 2019.
  6. ^ a b "Melbourne baby formula syndicate smashed as police seize tins worth $300,000". The Sydney Morning Herald. November 30, 2017.
  7. ^ "'Baby formula ring' leads to six arrests in Australia". BBC. January 21, 2019.
  8. ^ Chitrakorn, Kati (9 April 2014). "'Daigou' Agents Help Chinese Get Luxury Goods for Less". businessoffashion.com. Retrieved 28 October 2016.
  9. ^ "23 arrested in crackdown on milk-powder smuggling ring run in US". South China Morning Post. April 12, 2017.
  10. ^ a b Chitrakorn, Kati (February 5, 2016). "Can China End the Illicit 'Daigou' Trade?". businessoffashion.com. Retrieved October 28, 2016.
  11. ^ Hawkins, Amy; Thorpe, James (8 October 2019). "China ecommerce rules force personal shoppers to be creative". Financial Times. Retrieved 25 June 2021.
  12. ^ Menendez, Enrique (February 18, 2016). "Missed Opportunity: China's Neglected Domestic Travellers". businessoffashion.com. Retrieved 28 October 2016.
  13. ^ Buchwald, Brian; Neckes, Joshua (August 15, 2014). "Op-Ed | Alibaba's Catch-22". businessoffashion.com. Retrieved 28 October 2016.
  14. ^ a b Zhu, Julie (February 23, 2014). "Online agents cut luxury bills for Chinese buyers". Financial Times. Retrieved 2014-08-17.
  15. ^ "中国食品安全问题现状、原因及对策 中国食品安全现状" [The phenomenon, reasons and solutions of food safety problems in China]. Baidu (in Chinese). August 26, 2013.
  16. ^ Xiao, Bang; Mantesso, Sean (31 July 2019). "The daigou channel — how a handful of Chinese shoppers turned into a billion-dollar industry". ABC News. Retrieved 25 June 2021.
  17. ^ Solca, Luca (16 April 2015). "Digital China Leaving Ostrich Brands Behind". businessoffashion.com. Retrieved 28 October 2016.
  18. ^ Denis, Pascale; Wendlandt, Astrid (6 April 2016). Holmes, David (ed.). "Luxury Market Growth Will Hit Low Point in 2016, Forecasts Bain". businessoffashion.com. Retrieved 28 October 2016.
  19. ^ "'Desperate' mum's plea after catching baby formula hoarders emptying shelves". Yahoo7 News. August 3, 2017.
  20. ^ "Parents fume after watching shoppers hoard milk formula". The Chronicle. September 13, 2017.
  21. ^ "新西兰"禁奶"引上海妈妈囤货" (in Chinese). Oriental Morning Post. Retrieved February 16, 2019.
  22. ^ "Australian limit baby formula as China demand hits stocks". The Strait Times. May 16, 2018.
  23. ^ "Retailers crack down on baby formula limits amid parent pressure". news.com.au. October 26, 2018.
  24. ^ Sim, Shuan (April 8, 2014). "China's Sketchy 'Daigou' Luxury Market Is A Hotbed For Fakes". jingdaily.com. Retrieved August 29, 2014.
  25. ^ "What a New Law Could Mean for China's 'Daigou'". Sixth tone. December 21, 2018.

External links[edit]