Importance of ‘daigou’ in cracking the Chinese market

A recent article on, The daigou channel — how a handful of Chinese shoppers turned into a billion-dollar industry, has highlighted this growing phenomenon in western countries such as Australia.

‘Daigou’ is Chinese for ‘buy on behalf of’. The daigou industry was accelerated by the 2008 baby formula scandal in China which caused the death of six infants, with another 300,000 falling ill. Chinese consumer confidence in locally-made products took a massive hit, and consumers looked overseas for trusted big-name brands.

Today, there are an estimated 150,000 daigou working in Australia. Most are Chinese students looking to support themselves while studying here. Their Chinese customers contact them via WeChat to order goods. Importantly, the daigou also promote and recommend certain products, so they have become significant influencers of what to buy.

The daigou market has since expanded to include a wide range of goods such as cosmetics, clothes, food, wine, vitamins and toys. It is estimated that as many as half a million packages are sent to China every week.

While governments and experts debate the pros and cons of this unregulated market, businesses looking to start or grow sales within China can learn a lot from the daigou phenomenon in terms of their sales and marketing activities:

  • In China, WeChat is king. You simply MUST have a WeChat presence if you want to crack the China market. As the Chinese love showcasing purchases and experiences to enhance their ‘face’, any Aussie business has the chance to go viral if you can provide unique, authentic and high-quality goods and services.
  • Chinese consumers prefer to buy based on trusted recommendations from people in their network of family and friends. Again, this makes it crucial that businesses facilitate social sharing of images and positive experiences on WeChat.
  • ‘Brand Australia’ is highly regarded in China, with a reputation for clean, high-quality goods that represent a healthy lifestyle. Businesses looking to sell more to Chinese customers – whether tourists, students or permanent residents in Australia, or back home in the lucrative Chinese market – should look to leverage Australia’s great reputation in order to position their goods favourably in the minds of Chinese consumers.
  • Don’t underestimate the influencing power of Chinese students and permanent Chinese residents in Australia; factor them into your sales and marketing activities in order to positively influence potential sales opportunities direct to China.