Asia

Enter the daigou

You hear so many BIG NUMBERS about China that it can get a bit tedious: the endless stats about growth and prosperity, the fawning speeches on the Great Opportunity, and the squillion dollar rhetoric around the benefits of CHAFTA, can leave you feeling sleepy and suspicious. But once in a while a story breaks of a local business done good and you have to stop and think: how did they do that? What’s their secret? It seems almost too good to be true.

The latest face-slapper of a stat came from Bellamy’s Australia, who have doubled their revenue and tripled their earnings in the last financial year.

What makes these numbers interesting is that while a quarter of their turnover, an impressive $62 million, came directly from China, it was the growth of their Australian business that really stuck out: a whopping $120 million in increased sales in the last financial year.

(Say that again?)

I said $120 million in additional Australian sales of baby formula in the last financial year. That’s 67% year-on-year growth in a country where births are declining and breastfeeding is increasing. So what’s the magic formula?

Bellamy’s cite a number of strategic decisions they’ve made to increase their supply and distribution but, according to their full year results presentation, one significant success factor is the rise of the daigou.

 

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Alibaba estimates there are 150,000 daigou shopping in Australia today. Their mission? To buy local produce and to ship it back to China. Their method? WeChat, Taobao or another sophisticated social channel that enables payments and performance reviews in the same way that Uber has democratised travel.

Through our work in bilingual design, I’ve met a few daigou and without fail they’ve been nice young people who spend too much time on their smartphones. They’re not the threatening leeches on the Australian economy some would depict, but friendly entrepreneurs working hard to keep their customers happy and paying fair price and taxes for local product.

I’m sure there are less scrupulous operations in action, just as I’m sure Bellamy’s have made countless other good decisions to triple their business. But for now I say 祝 贺 (congratulations) to Bellamy’s, 谢谢 (thank you) to the daigou, and I encourage other Aussie companies to embrace this dynamic new sales channel.

 


 

For further reading on this topic check out the Wonkblog at The Washington Post, ‘This is what happens to half of Australia’s baby formula