Chinese buyers that purchased Western products on behalf of their family and friends back in China, now better known by their Chinese name ‘daigou’, started to gain public attention in Australia a year or so ago when media highlighted the baby formula shortage and started to take notice if how Blackmores and Swisse had been driving their impressive domestic sales revenues.
Fast forward to 2017 and many of the leading consumer brands, especially in the cosmetics, health supplements and infant formula categories are fully aware and often fully engaged into this daigou channel. This leads the smaller, emerging brands wanting to understand more and try to emulate the success of this Chinese buying group.
From the brands, many questions arise.
Like, who are these ‘daigou’? Where can we find them? How can we engage them? Are they a benefit or danger to my brand? Where to start?
There is no simple answer and each brand needs to reflect on a wide range of issues (from pricing to distribution to brand equity). But at the end of the day, it is not the brands that engage with the daigou but the daigou seeking out specific brands because they have requests or interest from their buying agents or actual buyers back in China.
So it you are a a new or emerging brand (normally with small or non existing Chinese marketing budgets) you will have a very difficult time getting on the radar of Chinese consumers back in China and thus will by of little interest to the Daigou who are making these local product purchases. It is for this reason, Digital Jungle had to adopt some innovative Chinese marketing strategies and approaches to assist these brands with Daigou that were low cost, low risk but lead towards a Chinese market entry strategy should that path be chosen.
At the heart of the daigou marketing program is a Daigou buying eMarketplace called “DaigouSales” and this quickly became a community of Chinese daigou buyers looking for the cheapest wholesale products based on requests from their Chinese agents/buyers. Although a passive marketing channel for the brands (meaning they did not actively chase the daigou buyer) it offered the daigou with an easy to find, easy to buy, easy to ship solution that saved time and money. For the newer brands it gave them a chance to develop their brand awareness and test out their Chinese marcomms, pricing and even packaging designs. But when combined with a Daigou VIP Manager (a complimentary program) they had their own Chinese daigou brand advocate who represented them in the broader Chinese community, provided Chinese WeChat advertising for buyers/agents and actively pushed in offline seminars and training — an active selling program that gives smaller brands traction through reverse word of mouth. The daigou in effect became KOL (key opinion leaders) and their information/recommendations has started to draw interest and more importantly product requests back from their Chinese buyers.
Daigou are not for all brands but if you don’t thoughtfully consider this channel then be this at your peril.