Why Daigou wipe out Australia market?

Name: Xuan Guo

SID: 440411668

Major: Master Degree of Media Practice

According to the report of Sydney Morning Herald, an Australian oversea student earned 40,000 dollars by Daigou milk powder in a year. This similar incident happened frequently, and more Chinese oversea students have operated their Daigou career successfully in Australia. Although Daigou makes local people lacks of milk powder indirectly and leads to the controversy in Australia, but some of them expressed they had difficulties to do Daigou and compared with the store of Daigou, they just earned little money to feed themselves.

High-quality and High-profit of the products

Daigou, is to find people to purchase the products which are not sold in consumer’s location or more expensive than other countries, so they ask others to buy it and deliver to them by express or bringing it to them directly.

Australia is famous for its baby formula, milk powder and health care products thanks to its high quality. Since “milk scandal” happened in China, Chinese people were worried about domestic milk, so they began to target at international market and use varieties ways to import baby formula. Also, Australia has many Chinese oversea students and immigrations and they have found Daigou seemed like a good chance to earn profit. Thus, Daigou have become more popular among Chinese.

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Image from interviewee

“I have begun my Daigou since two months later after I studied in the University. At first, my friends and relatives ask me to buy something and express to them, but I found Daigou consumed my time and labor, so I began to collect extra money to feed myself, then I found Daigou could earn more money than I thought and some of my friends also did Daigou, so when I had spare time, I did Daigou to earn profits”, Jenny Liu, a business student who have done Daigou for more than years said.

Comparing with China, the product price of Sydney is much more expensive, so in the store of Daigou, Chinese restaurant and Chinese market, Chinese oversea students are everywhere. In fact, although Daigou is tried, but the work time Daigou is free and the consumers are settled, so basically, there have not so much problems during Daigou.

“The price in Sydney is much more expensive than my hometown, although my parents can support me, I don’t want to use so much money. Furthermore, I usually have many assignments and presentations to do, so I have no stable time to do part-time in the restaurant or market. Daigou can satisfy the conditions and also earn considerable money, so that’s why I want to do Daigou,” Jenny said, “I’m not saying doing Daigou is a good thing, but sometimes the high price and life pressure push me try to think how to earn more money to support myself”.

All blame on Chinese people is right or wrong?

Contraposing Daigou, lots of Australian mom have complained on the local website and social media and doubted Australian retailers, suppliers and managers need to do more actions to stop Daigou. Local people complained they could not tolerate this behavior and blamed Chinese to stop Daigou. Costy Williams is a mother who is living in Sydney, she published a post on the Facebook and said she could not find any Bellamy milk power in Coles around 20 kilometers. Some Australians rebuked Chinese ‘Daigou’ and buyers bought all the milk powder from supermarkets, even some people posted several pictures about Chinese people ‘wiped out’ Bellamy and Aptamil milk powder in the supermarket.

“When I access to the area of milk powder in Coles or Woolworth, I can feel some strange sight from local people, but I think they can not blame us totally. I have heard from my boss that some local people, even Woolworth staffs will convey many milk powders to Chinese people who are operating the store of Daigou with high prices, in order to earn more money. Thus, sometimes they are willing to do this”, said Lily Yang, a student who is doing part-time job in the store of Daigou.

Sometimes, Chinese students can not buy the products from supermarket or chemistry, so they come to the store of Daigou to buy what they need to purchase. In Australia, the store of Daigou is everywhere, especially in the city or the suburb where Chinese people live in. Jackson Wang, a boss of the store of Daigou, has opened several sub branches in Sydney.

“The supply of the milk powder and baby formula is from local retailers which can guarantee their qualification in my store, and most of my customers always buy a box of milk powders and baby formulas. We have cooperated with express companies, so we can get some of the goods from those companies,” Jackson said, “as for our health care products, sometimes I pay money to local people and ask them to buy lots of health products from many chemistry store, and we sell them with higher price.”

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Image from interviewee’s mobile

Making rules is not enough

Recognizing the serious situation of Daigou, Australian Government stipulated that small exports of baby formula are legal but those over 10kg must be sourced from registered export establishments, have a health certificate and meet all of China’s import requirements. Failure to meet these standards can incur penalties of up to 12 months’ jail, while providing false information can result in five years in jail. With the alteration of Australian law, express firms also change their stipulation of delivering milk products and health care products. In supermarket, one person can just buy two baby formulas. However, Lily indicated that she can ask her friends to help her buy the milk products, so the regulation could not restrict her.

In conclusion, Daigou in Australia is not acknowledged by local government, but some of them do Daigou is to earn extra money to support their daily life, but some of them do Daigou as a normal career. The development of Daigou also let local people see the chance to earn more profits, so local retailers are willing to cooperate with Daigou store to gain more money. In another aspect, the rule that Australian government established can not solve this question totally, local people still appeal government to pay attention to Daigou.

Word count: 1010

Related news, you can see from

http://www.smh.com.au/business/retail/chinas-daigou-army-plan-fresh-assault-on-our-stores–and-this-time-theyre-coming-for-our-cherries-20160126-gme8ec.html

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Why Daigou wipe out Australia market?

Costy Williams is a mother who is living in Sydney, she published a post on the Facebook and said she could not find any Bellamy milk power in Coles around 20 kilometers. Some Australians complained Chinese ‘Daigou’ and buyers bought all the milk powder from supermarkets, even some people posted several pictures about Chinese people ‘wiped out’ Bellamy and Aptamil milk powder in the supermarket.

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Generally, for buyers, Daigou is to find other people who lives in other countries or cities to buy the products that they need. For sellers, they buy the products with cheap price and sell to buyers with high price to earn profits, especially for the sellers who are living in foreign countries.

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Australia is famous for their milk industries, and the price is not very expensive, so it is popular in China. With the rise of Chinese population, the demand of milk powder also increases rapidly. After the melamine-contamination scandal was reported, it has shaken Chinese people’s faith in the safety of the nation’s food supply. Thus, they target at foreign markets. Thus, Chinese people began to earn the profits by bulk-buying baby formula.

More and more local people reflect the lack of milk powder has impacted their daily life, Australian Government began to recognize this serious situation, so they stipulated that small exports of baby formula are legal but those over 10kg must be sourced from registered export establishments, have a health certificate and meet all of China’s import requirements. Failure to meet these standards can incur penalties of up to 12 months’ jail, while providing false information can result in five years in jail.

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Among the Daigo people, Chinese students in Sydney occupy a huge part in it. You can always see lots of Chinese students bring many baby milk powder to Daigou store and post to China. In Daigou stores, the customers always students. In Sydney, the price is higher than China, so in their spare time, some students may find part-time jobs to earn money, but comparing with other jobs, Daigou Australia products seems like it is a good and fast way to earn more money to support their life.

The feature mainly focuses on why they want to do Daigou under the high-risk, what people treat Daigou, is all Chinese people’s fault about laking of baby formula and is the regular really work for Daigou?

I plan to interview some students who are doing Daigou and telling what they are thinking about Daigou. Besides, I also want to interview the boss of Daigou store to find out who are providing baby formula to them. Also, if it is possible, interviewing the staff of Coles and Woolworth is a good way to know how they treat about lacking of milk powder.

The story target at local people and Chinese students, maybe government staffs can be interested in this report to know more about Daigou. Therefore, target online publication could be the newspapers which have high circulation, such as the Sydney Morning Herald and ABC news.

Xuan Guo

SID: 440411668

Word count: 504

Reference:

Liz Burke (2016).Trade secrets: The inside story of the baby formula grey market. Retreived from http://www.news.com.au/finance/business/retail/trade-secrets-the-inside-story-of-the-baby-formula-grey-market/news-story/b2c022dd26522e051e5c56ee61b3a58a

Commonwealth Department of Health and Ageing (2003). Marketing in Australia of Infant Formulas: Manufacturers and Importers Agreement – The MAIF Agreement.