The Chinese market is huge and there’s a big demand for good-quality foreign goods. Customers in China want good quality products while having a special preference for branded items.
In recent years, the popularity of Australian-made items has increased by a considerable margin. This is largely because of the “daigou” who sell authentic Australian items to people in China.
What is a Daigou?
Daigou started out simple. Members of the local Chinese community took results from friends or family and bought Australian-made products in Australia on their behalf. They would then ship these items back to friends or family, sometimes for a small commission. As demand for good-quality branded products grew, this daigou industry grew as well. It is currently estimated to be worth around $850 million with over 60,000 Australians of Chinese origin participating in it.
This is a very lucrative trade with many people personally invested. Some daigou companies with great international reputations have emerged over time. They have earned customer trust and av substantial influence over buyer behavior. All of these factors have made some daigous big influencers in the market.
Why Australian Brands Can’t Remove these Middlemen
Australian brands are aware of the potential for profits in this market. They have attempted to market products directly to Chinese customers instead of relying on these middlemen for profits but that hasn’t worked. There are many factors to consider in this situation, and some of are described below:
• Many Chinese shoppers have become wary of counterfeit or poorly made branded products. This has created a need for high-quality, authentic items sourced directly from Western markets like the US and UK, as well as from Australia.
• As customers don’t trust good solid directly in China, breaking the bond of trust between them and daigous aren’t easy. These middlemen have spent years cultivating their market and earning customer confidence so they have an already established base.
• Earning similar levels of trust in the Chinese market, after dealing with initial resistance can take years. It’s easier and more affordable to go through a daigou. Products sell quickly and brands earn profits without facing unnecessary problems.
• Many Australian brands like Suisse, Blackmores, and Jurlique sell well in China. They have been establishing a good reputation in a tough foreign market through daigous instead of operating independently with great success.
Powerful influencers like daigous are great partners, so brands should consider collaborating with them instead of trying to move around them. That can help with marketing down the line. Companies can use a daigou’s knowledge of Chinese market to create campaigns or products suitable for this new space.
Education is Vital
Most daigous want to foster a good relationship with brands. This can be done through education and exchange of knowledge. Just likedaigous can teach companies about Chinese buyers, brands can teach them about different products. This will help the middlemen market products more efficiently and complete sales. During this education process, brands can develop long-term partnerships with middlemen. If daigous trust a brand, they’ll be more committed to sales.
Developing a partnership with daigous will take some time and effort, but the impact on company reputation as well as revenue is worth it. A carefully planned, reasonable approach can help a brand develop a long-term strategy for this new market with the assistance of people who know it well.
ConnectX has launched the Daigou Connection Program, which helps brands to distribute their products to 230 Daigou shops, 40 Taobao stores, and 100 tour guides (Influential Daigou shoppers). Send an inquiry to firstname.lastname@example.org for a quotation.