The Daigou Route to China
White Paper
Jun 05, 2018

The Australian wholesaler and retailer environment is in a period of major and rapid change. Driven by mass demand from Chinese consumers, sales channels are shifting, new players are emerging and old business models must adapt to gain advantage in an evolving ecosystem.

Driving demand is Australia’s reputation as a land of unspoilt natural wilderness and beauty, where the air is clean, the food nutritious, and the population healthy. According to interviews with 2,000 crossborder shoppers, the Chinese are 1.6 times more likely to associate Australia with health and nutrition than the US, Germany, Japan and South Korea .

Consequently Australia, with a population of 24 million, is gaining increasing market access to China’s 1.4 billion residents. The recent free trade agreement signed between Australia and China also signals a green light for this growth to continue. At the opening of a new complimentary medicine plant in Eastern Creek Sydney, Prime Minister Malcom Turnbull said in Nov 2017 “Manufacturing in Australia has a great future and arguably nowhere more so than in pharmaceuticals, in foods, where our clean, green reputation is so valuable.” As products break national borders, Brand Australia has never been stronger.

This whitepaper reports our findings on how rising Chinese demand is driving purchasing behavior, shifting sales channels, and changing the Australian business ecosystem. A data driven approach is used to assess the magnitude of the growing Daigou phenomena, and the categories impacted are identified through our algorithms. Common threads to achieving success in the Chinese market are also drawn out through this paper.

 

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