China loves our ugg boots and food

China loves our ugg boots and food


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The lure of the billion-strong Chinese market is enough to send any business owner into raptures, but some specific products are in hotter demand than others

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Organic skincare, infant formula, food and ugg boots are hot favourites among Chinese daigou shoppers who take suitcases and boxes loaded with purchases back home to China for resale.

Organic skincare, infant formula, food and ugg boots are hot favourites among Chinese daigou shoppers who take suitcases and boxes loaded with purchases back home to China for resale.

The lure of the billion-strong Chinese market is enough to send any business owner into raptures, but  specific products are in hotter demand than others, says one of China's best-connected businesswomen.

Livia Wang is the director of CN Access, a consultancy firm that connects Australian businesses with the staggeringly large Daigou –  the grey market that sees Chinese-speaking shoppers bring millions of Australian products back to the mainland in suitcases and cardboard boxes.

"It seems like China can't get enough of Australian Ugg boots," joked Ms Wang while speaking on a panel at The Australian Financial Review Business Summit in Sydney.

"But one of the hottest products in China, apart from organic skincare and infant formula, is definitely food.

If you want to send something to China that they really want, it is good-quality food products."

Australian-grown and made consumables are highly coveted in China, where the population fear their food or medicine could be fake or poisonous.

The likes of Swisse, Bellamy's and Blackmores have experienced astonishing growth in recent years thanks to off-the-shelf purchases by Daigou shoppers who transport the goods back to mainland China.

According to Ms Wang, Chinese consumers can't get enough organic skincare products, mother and baby goods and quality food.

These, as well as unique materials found in Australia, like wool and health industry supplements and weightloss products are in the hottest demand.

"These five categories definitely have the biggest potential in the growing Chinese market," said Ms Wang.

There are around 1200 stores in Australia who send 100 to 200 parcels a day back to China and around 40,000 shoppers who scour supermarkets and other outlets for hotly demanded products.

While the Australia-Chinastream is growing and particularly lucrative, it is dwarfed by the Chinese Daigou industry, which turns over about 500 billion renminbi a year ($96.4 billion).

But as more businesses plug into this "grey market" the notion of a parcel tax has been floated in various jurisdictions.

"I do see a parcel tax potentially coming," said Ms Wang.

"This is part of the process for the Daigou to evolve their businesses into a better format to comply with laws in different countries.

But overall it won't change the demand from Chinese to get better quality products from foreign countries."

Earlier in the year, Ms Wang held a conference in Sydney to bring together Australian businesses and Chinese Daigou shoppers.

Describing the need to block off streets in Sydney's CBD to accommodate the swell of people, Ms Wang points out the need to legitimise what is clearly an in-demand market.

"You don't see any of the products that have had huge success in China [that were not popular] in the Daigou market first," she said.

"You just can't do China without the Daigou market."

While China's 1.3 billion strong population certainly piques the interest of Australian exporters, interested parties must be aware of the cultural differences before jumping headlong into the world's second largest economy.

"The Asian business mentality is very high context and eastern is very low context," says Monika Tu, founder of Black Diamondz Property Concierge, a real estate business.

"That means if Western people give you facts and figures they expect an immediate result.

“But with the Chinese, they go around and around. It doesn't mean it's dishonest, it's just how they communicate."

  • This article first appeared in The Australian Financial Review
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