It used to be so simple for the Australian companies selling consumer goods into China, making full use of the reputation for Australia (and New Zealand) of producing clean, high-quality product.
Some of the biggest beneficiaries have been vitamin and supplements heavyweight Blackmores, which has seen up to one-third of its sales head to China, and the Australian stock market’s mini-sector of dairy infant formula makers, which experienced a sales boom in China after a deadly milk contamination scandal in 2008 eroded confidence in China’s baby formula industry.
Australian producers rode the phenomenon of the “daigou” – literally, “buy on behalf” – buyers, which is an informal market of intermediaries, who buy overseas goods for Chinese consumers, for a fee. The daigou trade is a mixture of e-commerce businesses and informal exports from Chinese tourists and students buying in Australia: reports of the shelves of supermarkets and chains like Chemist Warehouse being emptied by Chinese buyers have become commonplace. Daigou has been a wholesale channel with which Australian companies have had to engage.