Name: Chinese personal shoppers and Australian brands devastated by the impact of coronavirus - ABC News
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Chinese personal shoppers and Australian brands devastated by the impact of coronavirus - ABC News

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Print contentPrint with images and other mediaPrint text onlyPrintCancelChristine Liu has always resisted asking her parents for money, but when the coronavirus pandemic hit, she didn't have a choice."I felt guilty … even though I can hardly make ends meet, I didn't want to ask," Ms Liu said."I think the impact of the pandemic has been enormous, and it could be a devastating blow."After recently graduating from the Australian National University, the 28-year-old has found a waitress job at a restaurant while she continues her daigou — or personal shopper — side hustle.She buys and sends Australian-made products including baby formula, health supplements, make-up and occasionally luxury bags to Chinese consumers.But demand has been plummeting since early this year.She's gone from selling at least 300 tins of baby formula a month last year, to selling only 50 tins in September.Ms Liu's annual turnover has also halved from more than $200,000 last year when she earned about $20,000 in profit before tax."I was often overwhelmed by too many orders, but I've hardly had a message on my phone this year," Ms Liu said."I am missing those busy days so, so much."Daigou are disappearing, though it won't vanish completely."Australia's multi-billion dollar daigou industry has been upended by the pandemic, with the effects being felt not just by thousands of personal shoppers but by major Australian businesses as well.Empty baby formula shelves had become a regular phenomenon across Australia, but The a2 Milk Company — a popular brand among daigou clients in China — is now .While it's hard to know which single factor has contributed most to the disruption, one problem has been the decline in overseas arrivals, particularly international students.Before COVID-19, there were .While some like Ms Liu were professional daigou, many were temporary migrants or tourists working on a smaller scale supplying friends and family with products back home.About 1,000 brick-and-mortar specialty stores catering to this demand are dotted across Australia, but many are now closed.The director of Honeyroo, a consulting firm that connects Australian brands with daigou, Jerome Fu, said about 30 per cent of daigou specialty stores were now closed temporarily or permanently."Even the shops that are open in Sydney, less people are walking in to buy and ship back to China," he said.But it's not just the lack of travellers having an impact, Chinese consumer behaviour is changing in the wake of the pandemic too."For safety concerns, they prefer products produced or stored in China, because parcels may contract COVID-19 during delivery from overseas," Ms Liu said.According to official data released in April, China saw its economy shrink for the first time since 1992, which has impacted the buying abilities of Chinese people."Chinese consumers have less buying power to buy imported products … also because of the [disruptions to] logistics, people can't wait that long for products," Mr Fu said.Even before the pandemic, Chinese consumers were increasingly looking for cheaper and more efficient ways to connect with Australian products.Jeremy Hunt, a former business executive of Swisse, told the ABC that new online platforms had had an "overwhelming" impact on the daigou model."There are China-led initiatives that have added to this pressure," said Mr Hunt, who helped pioneer e-commerce trade for daigou between Australia and China."[New platforms] have offered Chinese consumers a real competitive option, in terms of pricing and delivery timing," he said, adding that the competition would be intense for businesses in China and overseas.The downturn in trade is having a ripple effect beyond daigou and their clients.One of the biggest logistic providers for daigou shoppers — Blue Sky International Express — went bankrupt in May.Dozens of Blue Sky Express clients in Sydney and Brisbane told the ABC they were trying to retrieve goods still with the company, while some in Melbourne said they were able to reclaim their products by paying extra fees.The clients — daigou and specialty shop owners — estimate $800,000 worth of products and nearly 7,000 parcels are still missing, but the real figure could be even higher.As daigou sales collapse the fallout could also force some major ASX-listed companies to restructure."It's a drop that is evident across ASX-listed companies that have China facing exposure, i.e. Blackmores or The a2 Milk, through to privately held businesses and brands that have let staff go, and pulled back in marketing spend and other consumer-driven activations," Mr Hunt said.The A2 Milk Company is one of Australia's leading producers of baby formula, and a major source of products for daigou and their customers.The company did not respond to the ABC's questions, but CEO Geoffrey Babidge said in a September that sales of its infant nutrition products in 2021 would continue to drop, due in part to "a contraction in the daigou channel"."This disruption in the daigou channel is impacting our September sales and it is currently anticipated that this will continue for the remainder of the first half of FY21," the report said.COVID-19 also caused a 16 per cent decrease in net sales in Australia and New Zealand for vitamin company Blackmores, according to the company's for the first half of this year.On the flip side, Mr Hunt said COVID-19 had forced companies to recognise the commercial value of daigou sales."This is a positive recognition of the power and success of the sector, albeit alarming in that its implications are very real — brands and people are suffering as a result."With no end in sight to the disruption caused by the coronavirus pandemic, daigou are looking for ways to adapt.Ms Liu has found a part-time job in a restaurant to make ends meet for now, but she is also considering using brand-promotion skills to transform herself into an influencer online.Others like Longlong Hua have already made the transition."My business has been falling since March, but I upgraded my warehouse into 10 live streaming studios," Ms Hua said.Ms Hua invites individual daigou to use her studios to connect with Chinese consumers and promote Australian brands."This is definitely an opportunity, as consumers in China love this type of interaction," she said.With the industry facing its biggest shake-up in years, Mr Hunt said this type of business model involving daigou acting as influencers and brand promoters was becoming more common."The era of social sharing and social e-commerce is here already," Mr Hunt said."The demand is still there, the consumers in China not only desire, but have become accustomed to the amazing brands, products and efficacy that Australia produces."Loading..., More on:

Print contentPrint with images and other mediaPrint text onlyPrintCancelChristine Liu has always resisted asking her parents for money, but when the coronavirus pandemic hit, she didn't have a choice."I felt guilty … even though I can hardly make ends meet, I didn't want to ask," Ms Liu said."I think the impact of the pandemic has been enormous, and it could be a devastating blow."After recently graduating from the Australian National University, the 28-year-old has found a waitress job at a restaurant while she continues her daigou — or personal shopper — side hustle.She buys and sends...

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Chinese personal shoppers and Australian brands devastated by the impact of coronavirus - ABC News

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