Daigou sales
— literally translated as ‘buying on behalf of’— is a channel of commerce where overseas shoppers buy on behalf of mainland Chinese buyers.
A daigou sales can be anyone based overseas who shops for goods on a customer’s list and ships the goods back to China. In the context of Australia & New Zealand, daigou’s are typically Chinese students who while studying abroad look to make some extra income buy purchasing goods then sending back to friends or selling via platforms like Taobao (C2C).
The daigou sales phenomena has emerged over recent years as the Chinese demand for luxury goods grows and as the fears within China of food safety issues and as fake/counterfeit goods become less appealing to Chinese consumers.
Chinese buyers living in China can find daigou through personal referrals from other happy buyers; often through their WeChat network or search Taobao for particular products/categories of interest. They then either provide their shopping list, make a down payment and pay in full on receipt of the goods or shop via the eCommerce platforms (i.e., Taobao) or official daigou websites and purchase items right away — much like ordinary online shopping. Chinese buyers often prefer daigou websites over regular eCommerce sites because they prefer reading in Chinese and given the trust is often low with online sites, a Daigou gives a level of assuraiety about the nature of the goods being purchased.
Over the past year or so, various media outlets have written much about daigou buying up various products like infant milk formula, Weetbix, vitamins & supplements, skin & health products and even clothing. The extent of this buying has created issues in the supply chain for local consumers and has resulted in some markets restricting the number of products brought, for example, the number of cans of milk formula that can be purchased at one time from a supermarket.
Moreover, given the daigou has such purchasing power it is no wonder that Brands are starting to address them as a completely new segment and target them. Local Brands are creating Chinese language marketing and social media programs that specifically talk to the daigou and their needs. At Digital Jungle, we have seen a 130% increase over the past year in Brands wanting Chinese websites and Chinese social media (Weibo/WeChat) targeting Chinese consumers (often daigou) in their local markets rather than Chinese in China. A clear indicator of the awareness being placed on this group.
There is a number of implications for Brands that have both a domestic and existing China business, such as the price differentials that commonly exist between markets and product ranges/ingredient/formulations. This requires some refinement of the marketing and communications strategies but does not preclude running a domestic Chinese marketing program. Should you want to know more then please reach out.
