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Christine Liu has always resisted asking her parents for money, but when the coronavirus pandemic struck she had no choice
« I felt guilty… even though I can barely make ends meet, I didn’t want to ask, » Ms. Liu said
« I think the impact of the pandemic has been enormous, and it could be a devastating blow »
After recently graduating from Australian National University, the 28-year-old found a job as a waitress in a restaurant while she continues her agitation on the daigou – or personal shopper – side
She buys and ships products made in Australia, including infant formula, health supplements, makeup, and sometimes luxury bags to Chinese consumers
She went from selling at least 300 cans of formula per month last year to just 50 cans in September
Ms. Liu’s annual turnover also halved from over $ 200,000 last year, when she earned around $ 20,000 in pre-tax profits.
« I have often been overwhelmed with too many orders, but barely got a message on my phone this year, » Ms. Liu said
Australia’s multibillion dollar daigou industry has been shaken by the pandemic, with the effects being felt not only by thousands of personal buyers, but also by major Australian companies
Empty infant formula shelves had become a common occurrence across Australia, but The a2 Milk Company – a popular brand among Daigou customers in China – is now struggling with an oversupply of product
While it’s unclear which factor contributed the most to the disruption, one of the issues is the drop in overseas arrivals, especially international students
Whether it’s parents enraged at the infant formula shortage or military personnel loading boxes onto Chinese warships – there’s a good chance you’ve come across a phenomenon that has rocked business. across the country
While some, like Ms. Liu, were professional daigou, many were temporary migrants or tourists working on a smaller scale to provide goods for friends and family back home.
Around 1,000 traditional specialty stores meeting this demand are scattered across Australia, but many are now closed
The director of Honeyroo, a consultancy firm that connects Australian brands to daigou, Jerome Fu, said around 30% of specialized daigou stores are now closed either temporarily or permanently
“Even in the stores open in Sydney, fewer people are coming in to buy and send back to China,” he said
But it’s not just the lack of travelers that has an impact, Chinese consumer behavior is also changing in the wake of the pandemic
« For safety reasons, they prefer products made or stored in China, as packages can contract COVID-19 when delivered from overseas, » Ms. Liu said.
According to official data released in April, China saw its economy contract for the first time since 1992, which has impacted Chinese purchasing capacity
« Chinese consumers have less purchasing power to buy imported products … also because of [disruption] in logistics, people cannot wait that long for products, » M said. Fu
Even before the pandemic, Chinese consumers were increasingly looking for cheaper and more efficient ways to connect with Australian products
Jeremy Hunt, a former company executive at Swisse, told ABC that the new online platforms had had an « overwhelming » impact on the daigou model
« Some initiatives led by China have added to this pressure, » said Mr. Hunt, who helped pioneer e-commerce of daigou between Australia and China
« [The new platforms] have given Chinese consumers a real competitive option, in terms of price and delivery time, » he said, adding that competition would be intense for businesses in China. and abroad
One of the largest providers of logistics services for daigou buyers – Blue Sky International Express – went bankrupt in May
Dozens of Blue Sky Express customers in Sydney and Brisbane have told ABC they are trying to collect goods still with the company, while some in Melbourne have said they are able to collect their products by paying additional fees
Customers – daigou and owners of specialty shops – estimate that $ 800,000 worth of products and nearly 7,000 packages are still missing, but the real figure could be even higher
« It’s a drop that’s evident among ASX-listed companies that have exposure to China, ie Blackmores or The a2 Milk, to private companies and brands that have let staff go, and downsized their marketing spend and other consumer-focused activations, ”said Mr. Hunt
The A2 Milk Company is one of Australia’s leading producers of infant formula and a major source of products for daigou and its customers
The company did not respond to questions from the ABC’s, but CEO Geoffrey Babidge said in a September business update that sales of its infant nutrition products in 2021 will continue to decline, in part due to due to a « contraction of the daigou canal »
Tens of thousands of ‘daigou’ shoppers are buying products off Australian shelves to send to their customers on social media
« This disruption of the daigou channel is impacting our September sales and it is currently expected that this will continue for the remainder of the first half of FY21, » the report says.
COVID-19 also caused a 16% drop in net sales in Australia and New Zealand for vitamin company Blackmores, according to the company’s financial report for the first half of this year
On the other hand, M Hunt said COVID-19 forced companies to recognize the business value of daigou sales
« This is a positive recognition of the power and success of the industry, although alarming as its implications are very real – brands and people are suffering »
With no end in sight to the disruption caused by the coronavirus pandemic, Daigou is looking for ways to adapt
Ms. Liu has found a part-time job at a restaurant to make ends meet for now, but she is also considering using her branding skills to transform into an online influencer
« My business has been down since March, but I turned my warehouse into 10 live broadcast studios, » Ms. Hua said
Ms. Hua individually invites Daigou to use her studios to connect with Chinese consumers and promote Australian brands
« This is definitely an opportunity, because consumers in China love this kind of interaction, » she said
As the industry faces its biggest upheaval in years, Mr. Hunt said this type of business model involving daigou acting as influencers and brand promoters is becoming more and more common.
« The demand is still there, consumers in China not only desire, but have become accustomed to, the amazing brands, products and efficacy that Australia produces »
This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and BBC World Service which is copyrighted and may not be reproduced
AEST = Australian Eastern Standard Time, which is 10 hours ahead of GMT (Greenwich Mean Time)
Daigou
World News – AU – « Daigou is disappearing »: China’s economic decline devastates Australian buyers and businesses
