With a rising middle-class population and the ensuing high demand for higher quality products, China’s CBEC (Cross Border E-Commerce) market has maintained a fast and stable growth. Data from eMarket estimates that the retail sales value of the CBEC market in China will be over USD 150 billion with over a quarter of the Chinese population (292 million) will buy foreign products online by 2020.
C2C channel has been an important part in the total CBEC market. This channel is mainly driven by Daigou, a unique group of buyers who purchase products overseas and sell to customers in China. Daigou in ANZ is growing to be a huge market force that brands cannot ignore. The actual value of Chinese daigou sales in ANZ markets is hard to estimate due to lack of accurate data. But there are between 40,000 and 200,000 daigou shoppers operating in Australia and roughly 1200 dedicated daigou stores. And thinking of the over 300 million middle class consumers in China and their ever-growing demand for safer, healthier and higher quality products from developed markets like Australia and New Zealand, the future potential of daigou market is huge. Apart from the market size, daigou also offers a cost-efficient channel for ANZ brands and products to bypass China’s strict legal regulations and high cost to enter its market. The appeal is so obvious that lots of ANZ companies feel urged to harness daigou power.
Who are daigou shoppers? They can be any Chinese studying, working or living in Australia and New Zealand. According to the 2016 census in Australia, the total population with Chinese ancestry in Australia is 1,213,903, among which migrants who speak Chinese at home amount to 927,944. And migrants who were born in China reached 509,555. This is the population base of daigou shoppers. Most grassroot daigou shoppers are Chinese students and migrants living in Australia and New Zealand. They are fluent Chinese social media users and they all have a deep connection with mainland China, which forms their customer base.
The daigou community in ANZ market has been keeping evolving over the past 10 years and become so sophisticated that you cannot simply describe it from one perspective. ANZ brands need to pro-actively study, understand, educate and engage daigou shoppers to fully leverage their huge customer networks to drive growth in China market. Here are five tips for ANZ brands to engage Chinese daigou shoppers more effectively.
Make a long-term China strategy
For any brands that want to achieve sustainable growth in China market, you need to make a long-term plan at the very beginning and clearly define daigou’s role in your market-entry plan. For brands that have low awareness in China, daigou is a good channel to start. Brands can start working with daigou shoppers to promote the products among their customers. This can quickly build awareness and image for ANZ brands among Chinese consumers at a very low cost. However, after picking up on awareness and sales, brands need to establish presence on official CBEC channels for your long-term success. Always keep a balanced sales proportion between B2C and C2C channels. Our recommendation would be to use C2C (daigou networks) as a pioneering channel to cut through into China market and build B2C platforms to sustain growth.
Lead, feed, educate daigou shoppers on marketing content
Medium-sized daigou retail shop owners and small warehouse retailers are the key daigou groups brands need to leverage. Because they have a relatively large customer base, and they are keen to establish a direct connection with brands. They are like freelanced marketers who need first-hand product information and marketing ammunition to promote the brand that few Chinese consumers know. Brands need to pro-actively educate them about your brand history, the correct brand/product information, the product differentiator, and the right tone in communication to guide them to market your products in line with your brand positioning. Never leave daigou shoppers to explain the product benefit or even create a brand story for you, which might make your brand looks inconsistent and untrustworthy to Chinese consumers. Brands need to always have the control over the marketing content.
Offer a sense of privilege to engage daigou shoppers
Brand endorsement is crucial to daigou shoppers since it can help build their credibility among their customers. An exclusive offer or unique experience that allows daigou shoppers to build a connection with the manufacturer can often trigger daigou shoppers’ enthusiasm. Daigou conference or special events are effective ways to engage daigou community and fuel their passion about your brand. Brands can take an active role in these events to engage daigou shoppers and guide them to promote your products in an appropriate way.
Customize supply/sales channels for Daigou
Plot your supply or sales channels for Chinese daigou shoppers strategically in Chinese communities in big cities like Sydney, Melbourne, Auckland. Target the daigou retail shops in these areas to maximize the shelf display of your products. It is always good to have or outsource a field team to do regular visits in key daigou shops to know the market dynamics firsthand and adjust your product supply or pricing strategy accordingly.
Stay consistent and authentic in communications
When engaging daigou shoppers, you may need to customize supply or sales channel for them, but not your communication. On the contrary, you need to have a consistent narrative about your brand and product. Consistency in communication brings authenticity. Customers in China can find your communications through internet, or your China marketing campaigns, inconsistent communication messages through daigou shoppers will cause confusion and doubt about the product. And the key motivation for most Chinese customers choosing to buy through daigou shoppers is to get the 100% ANZ products, not some special version tailormade for Chinese market. An authentic ANZ image in communication is the proof of value. We won’t recommend ANZ brands to put on a Chinese face (e.g. using Chinese talents, Chinese slogan etc.) in communications in Australia and New Zealand market. You will most probably lose your authenticity and differentiator rather than building connection with Chinese audience.
Select the right mix of brands and products
In terms of which product to sell into China market, it’s another story. Because not all the products are equally appealing to Chinese consumers. Marketers do need to think strategically on what products in your portfolio and prioritize those have the biggest potential to be successful in China. What is your product’s differentiator compared with products are selling in China now? What is the best-selling product in the category in China market right now and why? These questions are worth considering before you engage with daigou shoppers. The principle is to offer what Chinese customers cannot get from their home market. Our past experience told us that the following features could often contribute to success in China market: 1) uniquely Australian; 2) advanced formula, novel ingredient; 3) representing a new aspirational lifestyle.
Think China has a specialized team and extensive working experience in engaging daigou shoppers in ANZ market. If you have a need to leverage daigou shoppers to build your brand in China market, just get in touch with us and we’ll show you how we can help to unlock the daigou power for your brand.