CHINA CRAVES FOR­EIGN GOODS. STU­DENTS IN AUS­TRALIA SUP­PLY THEM.

Cot­tage in­dus­try in Aus­tralia of Chi­nese stu­dents sell­ing to China

Vocable (All English) - - Enjeux -

Aus­tralia is of­ten the coun­try of choice for univer­sity for Asians, de­spite be­ing one of the most ex­pen­sive in the world, on av­er­age about 42,000 dol­lars per year for for­eign stu­dents. It has the largest pop­u­la­tion of for­eign stu­dents any­where, pri­mar­ily from China. This com­mu­nity has de­vel­oped an in­dus­try based on ex­port­ing goods back home…

MEL­BOURNE,

Aus­tralia — Zhang Yuan’s busi­ness started with fa­vors for rel­a­tives: an aunt who wanted baby for­mula, a cousin look­ing for Ugg boots. She was a col­lege stu­dent here in Aus­tralia and ev­ery dol­lar helped, so she mailed the items back to China and charged a bit of a com­mis­sion.

2. But then, through word-of­mouth, her busi­ness just kept grow­ing. Be­tween classes, she would shop for what­ever was pop­u­lar that week: vi­ta­mins, brand-name jew­elry, a fake erec­tile dys­func­tion drug called Kan­ga­roo Essence. And when she could not find a more lu­cra­tive job after grad­u­a­tion, she stayed in Mel­bourne and in the boom­ing gray mar­ket for sell­ing Aus­tralian goods to Chi­nese con­sumers.

3. Her busi­ness now em­ploys two buy­ers, two pack­ers and two peo­ple in cus­tomer ser­vice, with of­fices in Mel­bourne and Hangzhou, her home­town in eastern China. Tak­ing or­ders on­line, she sells mainly to health-con­scious and well-to-do women and says she makes more than $300,000 a year.

4. “The Chi­nese have al­ways had blind ado­ra­tion for for­eign things,” said Zhang, 25. “So rather than pay­ing for ex­pen­sive, made-in-China prod­ucts that might lack safety, why wouldn’t they buy high-qual­ity Aus­tralian ones at lower prices?”

HOT STUFF

5. Even as the world has come to rely on Chi­nese prod­ucts, Aus­tralian goods have be­come hot com­modi­ties in China, and tens of thou­sands of young Chi­nese who are stu­dents at Aus­tralian uni­ver­si­ties or re­cent grad­u­ates have built a cot­tage in­dus­try to meet that de­mand.

8 in 10 of them are in­volved in the daigou busi­ness.

6. The thriv­ing trade — fu­eled by Chi­nese anx­i­ety over coun­ter­feit goods and prod­uct safety at home — re­flects the grow­ing eco­nomic in­ter­de­pen­dence be­tween China and Aus­tralia, with all the op­por­tu­ni­ties and chal­lenges that come with closer ties be­tween a wealth­ier na­tion of 24 mil­lion peo­ple and a ris­ing re­gional power of more than 1.3 bil­lion. China is Aus­tralia’s big­gest trad­ing part­ner, and Chi­nese in­vest­ment in Aus­tralia set a record last year.

7. The stu­dents, who call them­selves daigou, or pur­chas­ing agents, are highly at­tuned to Chi­nese tastes and move quickly, some­times cre­at­ing spikes in de­mand in Aus­tralia and clear­ing out stores of spe­cific prod­ucts be­fore

shop­keep­ers know what hit them. Some an­a­lysts es­ti­mate that daigou sent as much as $600 mil­lion in Aus­tralian prod­ucts to China last year. But their suc­cess has also drawn scru­tiny, with of­fi­cials in both China and Aus­tralia ex­am­in­ing whether they are pay­ing re­quired taxes and com­ply­ing with other reg­u­la­tions.

OLD STUFF, NEW STUFF

8. Chi­nese pur­chas­ing agents first ap­peared in Europe, buy­ing and ship­ping lux­ury goods like hand­bags for China’s grow­ing mid­dle class. But the trade has shifted to Aus­tralia in re­cent years as the Chi­nese stu­dent pop­u­la­tion in Aus­tralia has ex­panded and con­sumers in China have grown more anx­ious about food and prod­uct safety. 9. Chi­nese stu­dents in Aus­tralia say as many as 8 in 10 of them are in­volved in the daigou busi­ness. Some are just try­ing to make ends meet with oc­ca­sional sales. Oth­ers have man­aged to build sig­nif­i­cant ex­port busi­nesses. They mail their prod­ucts to cus­tomers in China or ship them to Hong Kong, where traders can carry them across the bor­der to avoid main­land tar­iffs.

10. “Shop­ping for oth­ers is like buy­ing for my­self. It gives me the same plea­sure,” said Uki Shao, 18, a busi­ness ma­jor in Mel­bourne who de­scribed her­self as the “best daigou at my col­lege.” She sells brand-name items like Pan­dora jew­elry, Michael Kors ac­ces­sories and Ae­sop lo­tions and said her main chal­lenge was con­vinc­ing cus­tomers that her prod­ucts are not fake. “Some­times, I have to take a video and post it on WeChat to show I’m in Aus­tralia,” she said, re­fer­ring to the dom­i­nant mes­sag­ing app in China, which the stu­dents also use to process pay­ments.

BIG BUCKS?

11. Be­cause most pay­ments are pro­cessed on WeChat and other Chi­nese plat­forms, the au­thor­i­ties in Aus­tralia rely on stu­dents to de­clare the in­come them­selves. Some daigou also of­fer lower prices by evad­ing Chi­nese im­port du­ties, and there are oc­ca­sional re­ports of ar­rests in China.

12. “There’s quite a few that have grown into quite sub­stan­tial op­er­a­tions, and there’d be quite a lot where they’re per­haps fly­ing un­der the radar,” said Paul Drum, the head of pol­icy at CPA Aus­tralia, the national as­so­ci­a­tion of ac­coun­tants.

13. But Zhang ex­pressed con­fi­dence that the mar­ket would con­tinue to ex­pand even as reg­u­la­tors caught up and Aus­tralian com­pa­nies es­tab­lished new chan­nels to sell di­rectly to Chi­nese cus­tomers. “Ev­ery­one’s got fam­ily and friends, and there­fore their own cus­tomers,” she said. “That’s why there are so many daigou around.”

Rat­nayake/ The New York Times)

Uki Shao, 18, a busi­ness ma­jor who de­scribes her­self as the "best daigou at my col­lege," at a Chemist Ware­house in Mel­bourne, Aus­tralia.the "best daigou at my col­lege," at a Chemist Ware­house in Mel­bourne, Aus­tralia.

(Asanka Bren­don

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