Wuhan Local is Exporting Products from Australia via WeChat

In Sydney, a multi-million dollar export industry starts with a simple trip to the shops.

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Laden with plastic bags that are almost too heavy to carry, we meet Rika Wenjing, a 24-year-old accountancy graduate from Wuhan, the capital of Hubei province.

She labours with tins of infant food, supplements and skin lotions from a discount chemist to sell to customers back home in China.

Rika has worked part-time for the past two years as a daigou, a freelance retail consultant.

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Ugg boots are popular with Chinese shoppers

 

She is glued to her phone and tablet, using the messaging app WeChat to build a network of 300 clients who aren’t afraid to pay premium prices for trustworthy Australian goods.

“In the beginning I just had my friends and my aunty to buy baby formula or unique brands from Australia, like Ugg boots. Then I wanted to build a platform to show more products to them,” she told the BBC. “I don’t want just to earn money, I want to provide products to my friends.”

In Australia, it’s estimated there are 40,000 daigou, which means “on behalf of” in Mandarin.

The online shopping agents are almost exclusively from mainland China, and are young migrants or international students looking for flexible ways to help cover their rent and university fees.

The epicentre of the trade is in Sydney, a city with a growing Chinese community and frequent direct flights to China, which makes doing business quicker and smoother.

Earlier this year, Beijing tightened regulations on cross-border online shopping, but there is still money to be made, especially in baby milk formula, known as “white gold”.

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Shoppers in China cannot always find the brands of baby milk formula they want locally

 

In 2008, at least half a dozen children died and as many as 300,000 fell ill in China after consuming milk products contaminated by melamine, a chemical used in plastics and adhesives. Since then, imported milk has become highly prized by sections of China’s affluent and health-conscious middle classes.

“Everyone cannot buy the good quality or the reliable formula in China, so they want to buy from Australia. Maybe it is more expensive, they don’t care [about] the price but they do care about the quality,” Rika explains.

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As demand peaked last year some shops limited the amount of formula customers could buy

 

At the height of a boom last year in demand in China for milk formula, a buying surge from daigou attracted criticism in sections of the Australian media for leaving domestic shoppers empty-handed.

Daigou came to prominence in Europe by shipping luxury goods such as Gucci handbags to China. In Australia, the trade revolves around everyday items including food, beauty products, wine and clothes.

“There are smaller daigou, so mum doing a home business and ship the product to China. There are also those which open up their own shop and try to do a bigger-scale business,” says Benjamin Sun, the co-founder of Think China, a digital marketing company in Sydney.

“Some of the daigou… establish their own logistics, own e-commerce website and try to formally distribute the products. It is all about trust, that is what daigou is doing – building trust between their clients. They are small but they are a lot of people. If you add them together, they are huge.”

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Benjamin Sun says the work of a daigou is all about building trust with clients

 

Daigou typically charge premiums of about 50% above the retail price in Australia. But even allowing for transport fees, buyers in China invariably pay much less for the same product in a local shop – assuming it is available.

The industry with its home-spun roots does have its challenges. Customers must be convinced the goods they receive are genuine, and not fake, and that the supplier is reliable.

Consultants often livestream their visits to supermarkets and chemists to prove the authenticity of the goods they send. It is an industry founded on trust.

In the Sydney suburb of Yagoona, Bob Sun, originally from the city of Dalian but now studying accountancy at Macquarie University, is renting a warehouse with three Chinese friends for their expanding business.

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Bob Sun packs boxes to send to his clients in China

 

They pack their products – again mostly milk powder, vitamins and skin creams – with Australian magazines to help prove their provenance.

“The income from daigou is reasonable compared to other working opportunities like working in a restaurant and that sort of thing. The profit is really enough to cover your rent. It is easy to do that,” the 24-year-old student told the BBC.

“The biggest reason for me to do daigou is to not work in some company or to work in a restaurant. It is flexible.”

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Bob Sun (centre) and colleagues process orders for Australian goods

 

These freelance exporters have created thousands of trading routes both small and big into China, a market that can be almost impenetrable for some Australian companies, and others from New Zealand. Increasingly firms are collaborating with specialist consultants to harness their contacts and expertise.

“We think daigou are good for both the local economy… and they are very good for our business,” says Peter Nathan, chief executive of A2 Milk, a New Zealand baby formula manufacturer that also operates in Australia.

“We clearly believe they are a positive force and it’s fair to say that it is something we are assessing.”

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