This was the third pharmacy I’d been to and finally someone in charge was willing to speak to me. She is the manager of a major pharmacy in Sydney, who would not be identified. And by “willing” I mean being wary and skeptical the entire time and wore a worried frown throughout our talk as if I had an ulterior motive up my sleeve.
All I wanted to talk about, as a journalist and as a curious customer, was why two specific products of Swisse – Ultiboost High Strenghth Cranberry and Ultiboost Hair Skin Nails Liquid – was out of stock everywhere I checked, both at pharmacies and Swisse’s online store.
My suspicion is that Chinese “daigou” (loosely translated as “overseas shopping agents”) play a major part in it. They are a group of people whose job is mainly to purchase luxury goods like handbags and jewelry overseas and then smuggle or mail them back to China to avoid tariffs. They also buy and sell goods that are not available in Mainland China like quality baby formula and vitamins.
As I brought this idea up to her, she gave me a short but clear answer “definitely”.
I was grateful to her frankness despite her unfriendly attitude. One of the other pharmacy managers I was trying to get in touch through a friend actually said it was “unethical” to talk about what customers do with the goods they bought and therefore refused to answer any of my questions.
The fishy business
Apparently they are aware that there is something fishy about daigou business and that it’s a complex issue for them to talk about.
And it’s true. The Economist calls the business a “grey market” because there are no established laws to regulate their activities.
In fact, daigou agents who actually bought the genuine goods and mail them back to China is only a small part of the problem. A series of bigger problems such as cheating and the existence of counterfeit products are where the true worries are.
According to news.china.com.au, empty Swisse bottles are being collected online in China at a price of 10 CNY each. The bottles will reportedly be filled with fake tablets to be sold as genuine Swisse products in a much lower price to attract customers.
Terry Zhang is a student of The University of Sydney and a daigou agent himself. He only sells real products but a few months ago he was contacted by someone in China who offered him steady supplies of Swisse Cranberry at a price of 30 CNY (about 6 AUD) per bottle.
“It’s definitely fake,” he said. “Swisse Cranberry is sold at Chemist for 10 AUD each.”
He also told me that a friend’s aunt is working at a small workshop in Guangzhou province, China. The job of the workers there is making fake Swisse Cranberry tablets.
“I heard that the main ingredient they use is flour, so it won’t do any harm to human body, but it won’t work the way the product is meant to either.”
Supplements are not medicine and are not bound to cure or heal, which is why it’s hard to make the conclusion that a certain product is fake simply because your body is not responding to it expectedly.
And this is the tricky part: because it’s difficult to authenticate the goods purchased from daigou agents or those who claim to be daigou agents, it’s almost impossible for customers to ask for a refund since they can’t actually provide the evidence to prove the product is fake.
What’s driving it?
One of the reasons for this Swisse frenzy is that China has strict rules for the import of drugs and supplements. When people need certain drugs but don’t have legal access they’re likely to turn to daigou agents.
One of the most recent cases caught the public’s eyes when Lu Yong, a 46-year-old leukemia patient was arrested last year because he had been purchasing “unapproved” cancer drugs from India both for himself and for hundreds of fellow patients.
He wouldn’t have done it if it hadn’t been because Glivec – a patented drug made by Novartis International AG in Switzerland and has been approved by Chinese government – costs 23,500 CNY (4,700 AUD) a month while a much cheaper but “illegal” version made in India costs only 200 CNY. Most importantly, they are equally effective.
The other reason that Swisse, instead of other similar products, was swept by daigou agents is Chinese people’s obsession with brands – Swisse has been advertised a lot on Wechat and that’s why people tend to believe it’s the best brand of supplements in Australia and everything else is second best.
By contrast, when asked how it had affected local Australians, the manager said they would simply switch to other brands, such as Good Health and Blackmores.
“If you need cranberry, you just buy cranberry. It doesn’t matter what brand it is.”
According to her, something advertised on Wechat is not true and people are being misguided.
“For example, the Hair Skin Nails Liquid is advertised as collagen drink. But they’re actually collagen boost drink and don’t contain any collagen in them. But it’s hard to educate people on Wechat.”
The grey market of daigou activities has proven to be difficult to regulate. But it’s undeniable that they are acting like a bridge linking Mainland China and the external world. As long as the gap is there, the demand will continue to exist and the problem will certainly not disappear any time soon.
A few shopping tips
- Choose reliable daigou agents: friends or family instead of strangers on Taobao or Wechat.
- Don’t be attracted by low prices. They are usually cheap for a reason.
- Most foreign merchants have online stores. Purchase directly from their sites is a good way to avoid fakes.