CHINA CRAVES FOREIGN GOODS. STUDENTS IN AUSTRALIA SUPPLY THEM.
Cottage industry in Australia of Chinese students selling to China
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…
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?”
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.
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.”
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.