May Liu earns about $2,500 a month as an office worker in Hong Kong, but she spends about 10 to 15 times that on luxury goods, buying everything from Prada handbags to products from US cosmetic brand Fresh.
While Ms Liu loves shopping, she buys mostly for others in her role as a “daigou” agent – a growing breed of people who specialise in helping mainland Chinese consumers secure products from overseas.
She started her daigou business a year ago as a way to earn more money, but the young mainland Chinese was soon bringing in up to $10,000 a month. Ms Liu now has about 2,600 clients, who use Weibo, China’s equivalent of Twitter, and WeChat, a messaging app, to order goods.
“I didn’t know how much money I would make. I didn’t have any expectation of profits,” says Ms Liu, who asked to use a pseudonym. “I only knew it would be profitable.”
She has not given up her day job, realising that being a daigou agent, while highly profitable, can also be illegal.
Some agents focus on ferrying goods from Hong Kong to mainland China.
But the web-based phenomenon has spread to expatriate Chinese who are help compatriots back home buy brands from cities such as Paris, London, New York, Hong Kong, Tokyo and Seoul.
The daigou boom is an example of how ecommerce is rapidly transforming the Chinese retail market.
According to Chinese media, there are hundreds of thousands of people working in the daigou business. A search for the term on Alibaba’s Taobao, China’s largest online marketplace, produces more than 240,000 virtual stores and nearly 15m items from child car seats through air purifiers to pocket printers.
The China e-Commerce Research Centre says the daigou market grew 19-fold between 2008 and 2012 when it reached Rmb48bn, and reckons that it rose again in 2013 to Rmb74bn ($12bn). According to a recent study by Bain, about 60 per cent of the Chinese consumers who buy luxury goods have used daigou at some point.
The business is thriving for several reasons. Many Chinese believe the same product is better made when bought overseas because of the mainland’s uneven reputation for quality.
The rising strength of the renminbi, the growing purchasing power of Chinese consumers, and high-profile food safety scandals in China, have also spurred demand for safe and high-quality foreign products.
Mo Daiqing, an analyst at the e-commerce research centre, says the main reason Chinese are turning to daigou is because of hefty import tariffs on luxury goods. China levies a 50 per cent duty on cosmetics, one of the dominant daigou categories, and that is before the imposition of the standard 17 per cent value added tax that is added to imported luxury products.
“The same brands of milk powder, cosmetics and handbags are much cheaper in Hong Kong, the US, Japan and South Korea than in mainland China,” said Ms Mo.
But the industry is increasingly drawing attention from customs officials in mainland China and Hong Kong, particularly with the rising numbers of so-called parallel traders who take advantage of multi-entry visas to cross the border at the southern Chinese city of Shenzhen many times a day, carrying products for resale that they do not declare at customs.
Dong Yizhi, a lawyer who specialises in ecommerce, points out that the daigou business is not illegal if the agents pay import taxes, but says that if agents pay duties the premise of the business becomes moot.
“If they pay customs duties, the price disparities will be much smaller and they won’t make money,” said Mr Dong.
Chinese citizens can legally import Rmb5,000 ($823) of duty-free goods for personal use each time they return to the mainland. But Shenzhen customs officers are taking a tougher line on parallel traders who cross the border back into the mainland more than once a day with goods over the value of Rmb500.
Liu Lizhen, a Shenzhen customs official, said the move was aimed at clamping down on the abuse of the multiple re-entry system.
This has become a more serious issue in Hong Kong since 2009 when it started allowing Shenzhen permanent residents to enter the former British colony without restrictions.
“We once found a person who had crossed the border 26 times a day,” said Ms Liu.
According to the Shenzhen customs bureau, more than 20,000 parallel traders operate at the six land border checkpoints between Hong Kong and the southern Chinese city.
Hong Kong’s immigration department said just over a thousand parallel traders were arrested last year for breaching the terms of their stay in the territory.
Despite the crackdown, May Liu, the daigou agent, says she is not worried, and still travels to Shenzhen a few times a week.
“Carrying so much stuff across the border every time provides me with a lot of exercise. I don’t even have to go to the gym,” jokes Ms Liu.
‘Brands are much cheaper in Hong Kong, the US, Japan and South Korea than China’
中国电子商务研究中心(China e-Commerce Research Centre)表示，代购市场在2008至2012年间增长了19倍，规模达到了人民币480亿元，2013年代购市场继续增长，规模达到了人民币740亿元（合120亿美元）。贝恩公司(Bain & Company)近期进行的一项研究显示，约有60%的中国奢侈品消费者曾经使用过代购服务。