Spotlight on the Chinese e-commerce channel: Daigou
20 July 2017 / Published in BusinessWhat do you do when you can’t buy something yourself? Get someone to do it for you, of course.
A few years ago, the Chinese middle class had a problem. It wanted premium foreign food, health, beauty and fashion items that either sold in China for higher prices than what they sold for overseas, or couldn’t be bought in China at all.
Then came rising concern about food safety, product counterfeiting and a desire for premium consumer items as wages increased.
The “daigou” (pronounced die-goo) was born.
What is a Daigou?
Literally translated daigou means “buying on behalf of” which is exactly what a daigou does.
Daigous are shopping agents who seek out products overseas for buyers in mainland China. They purchase the items and send them back to their buyers in China in exchange for a commission on the purchase. Often the trades occur through WeChat — a Chinese messaging service that is similar to FaceBook or Weibo — similar to Twitter.
The daigou channel is a particularly personal shopping method and builds on trust. A lot of daigou customers know their buyers personally or through word of mouth. This is important as there is a big problem with brand trust in China.
New Zealand has strong provenance culture and secure supply chain, which together with our clean green image deliver the attributes that Chinese customers desire. They enjoy an authentic and reliable experience; hence the growing demand for New Zealand brands in China.
“Daigous have become an important channel for New Zealand businesses to enter the Chinese market,” says Greg Beehre, GM Global Transaction Banking.”
There are approximately 350 daigou stores in New Zealand that stock around 20 to 30 key brands in predominately the vitamin, infant formula and skin care categories. The stores offer competitive pricing with many even shipping purchases directly to China.
“We recently held our inaugural Daigou luncheon here at North Wharf to provide some of our business customers with the opportunity to meet and connect with Daigous, and of course to showcase their products to them,” Greg adds.
Greg says the beauty of daigous is that they come with their own networks.
If you want to know more contact our Trade Finance team for more information.