Read The Times Australia

Daily Bulletin

Chinese personal shoppers have created a new type of retail store in Australia

  • Written by: Gary Mortimer, Associate Professor, Queensland University of Technology

It might seem unlikely that there’s stores in Australia, selling only a small range of products, at prices significantly higher than supermarkets, yet turning over millions of dollars each year. But an increase in stores catering to personal shoppers, called daigou, are growing in the Australian retail scene.

As demand for Australian products increases, daigou stores allow Chinese shoppers to send goods to China. One public relation agency estimated there are between 1,200 to 1,600 small daigou stores that offer “pack and send” services in Australia. Until now, these businesses were fragmented and operated independently.

However, the first Daigou retailer recently listed on the ASX, AuMake. The retailer has seven stores in Sydney and plans for more.

Daigou stores are emerging in response to the demands of a burgeoning Chinese middle-class and their hunger for Australian brands. By 2022, 76% of China’s urban population will be considered middle-class.

Why Australian brands can’t ‘go it alone’

Poor quality Chinese products, food safety concerns combined with ongoing issues of counterfeiting have contributed to a deficit in trust of Chinese brands. This lack of trust is driving demand for authentic, high quality products – particularly from Western markets like Australia.

So, why don’t Australian business simply cut out the middleman and go straight to the consumer? It comes down to the establishment of trust between the consumer and the retailer, and the length of time it takes a foreign retail business to establish consumer trust in China. Australian-based brands like Suisse, Blackmores and Jurlique sell through Daigou retailers to quickly establish authenticity of the product and consumer trust.

Daigou businesses are quickly becoming market influencers, that can make or break brands in China. Case in point is Bellamy’s infant formula, Airwallex Founder Lucy Liu stated:

what Bellamy’s didn’t expect was that the daigous’ customers would be more loyal to their daigou, than to the Bellamy’s brand.

Chinese consultancies are now offering to connect Australian businesses with highly-influential Chinese bloggers and Chinese social media personalities to help promote your products and services

A viable market

Despite low domestic growth in food and groceries, an AFGC State of the Industry Report identified a real hunger for Australian manufactured brands internationally. In 2015-16 food and beverage exports grew by 11% to A$26 billion and grocery (non-food) exports up 32% to A$4 billion.

Notably, China has become Australia’s largest export market for the first time in 2016-17.

So lucrative is this daigou model, that the 2017 Australia-China Business Week Conference allocated an entire afternoon to a workshop on Chinese social media platform WeChat. The aim of the session was to demonstrate to marketers and business how WeChat could be utilised to connect, influence and sell to Chinese consumers.

Global consultancy firms like Nielsen are scrambling to advise entrepreneurs and brands on how they can leverage this new retail model for financial growth.

A final cautionary note

As these daigou stores open up around Australia and become the legitimate “go to” for Chinese consumers seeking quality, authentic Australian brands, it would appear the days of individual daigous striping supermarket shelves of infant formula may be numbered. The model provides a regulated channel to the Chinese consumer and circumnavigates the need for individual daigou shoppers.

While this new retail model presents a great opportunity for Australian products and brands, ultimately, the future remains uncertain. On one hand, Chinese entrepreneurs may increase the number of stores across Australia and small brands will compete for shelf space, in order to access the lucrative Chinese market. Alternatively, established daigou relationships based on trust may endue and the business model becomes irrelevant.

In the end, this retail model remains viable only as long as the Chinese government permit online shopping from international markets – they could close the door overnight. Chinese officials have already imposed bans on foreign books, movies and games being imported to China.

Authors: Gary Mortimer, Associate Professor, Queensland University of Technology

Read more http://theconversation.com/chinese-personal-shoppers-have-created-a-new-type-of-retail-store-in-australia-86844

Business News

Office Cleaning Melbourne: Choosing the Right Scope for Your Office

A well-planned office cleaning Melbourne arrangement starts with a clear understanding of the premises and the people who use it. An office may include private work areas, shared desks, reception, mee...

Daily Bulletin - avatar Daily Bulletin

How Businesses Can Prepare for Unexpected Power Outages

Power failures can occur quickly. The supply may be interrupted by bad weather, issues with the electricity network, damaged equipment or local construction work. This can be just a hassle for a fam...

Daily Bulletin - avatar Daily Bulletin

How Chatswood Tutoring Can Fit Into a Student’s Weekly Routine

Create a Predictable Weekly Structure A consistent weekly routine can make study easier to manage when students are balancing several subjects. Chatswood tutoring can provide a fixed learning point a...

Daily Bulletin - avatar Daily Bulletin

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Why a Safety Certified I/O Module Matters in Machine Design

Understanding Safety-Related I/O A safety certified I/O module is designed for use within an arch...

Transforming Your Backyard for a Sophisticated Milestone Celebration

Hosting a milestone event at home has become a deeply popular choice for Australians looking to cr...

Valentine's Day Gifts for Your Husband That He'll Actually Love

Valentine's Day tends to be built around flowers, chocolates and jewelry, which leaves a lot of wi...

Why European Vehicles Demand Specialised Maintenance on Australian Roads

European cars, encompassing premium brands like BMW, Audi, Mercedes, and Volkswagen, are highly soug...

How Melbourne Businesses Can Retain Top Talent Through Visa Sponsorship

Melbourne businesses are facing an increasingly complex hiring landscape. According to the Jobs and ...

Clever Ways to Combat Dampness and Maintain a Healthy Bathroom Environment

Australians currently spend more than 90 percent of their time indoors. This modern lifestyle heavil...

How Registering a Company in Singapore Can Support Business Growth

Choosing where to register a business can influence how easily it grows, attracts customers, and e...

What Business Owners Should Know About Company Registration in Hong Kong

Hong Kong is a popular location for entrepreneurs looking to establish businesses with internation...

What Entrepreneurs Should Know About the Benefits of Registering a Company in Australia

Starting a business involves more than finding customers and offering a good product or service.  ...