Intelligent Daigous Marketing for Australia; How To Drive Chinese Sales
The China-Australia Free Trade Agreement (ChAFTA) marked huge changes for Australian exporters to China. Selling online in China became far more straightforward, allowing the simple shipment of goods through logistics providers or the procurement center of an affiliated e-commerce market.
Despite these opportunities, the most popular Australian exporters to China aren’t brands, they’re buying agents or ‘Daigous’ (often translated as ‘Re-Sellers’).
Daigous is a Powerful Infrastructure
There are an estimated 50 000 Daigous now operating in China, they are essentially users who buy & source products to then re-sell to their personal networks. They are unauthorized, to purchase goods on behalf of consumers abroad & then often sell through their social media accounts on platforms such as Weibo & WeChat.
They then post products to their clients in China, they are entrepreneurs and powerful middle man for Australian businesses.
A Daigou Purchasing Goods from A Store in Melbourne.
Re-Sellers are Big Business in Australia
There are over 4,500 re-sellers based in Australia. On the largest C2C marketplace, ‘Taobao’ unauthorized re-sellers make up over 90% of all Australian products and services listed on this e-commerce platform. There is therefore a strong market for connecting with re-sellers to promote your product. We’ll explore a more effective strategy to do this later.
Daigous are Dominating Search Engines
There are more Chinese web searches looking for Australian buying agents than those directly searching for Australian products. The most-searched keyword associated with “Australia” was “Daigou”, according to data from the Chinese search engine Baidu, from January to July 2016.
Daigou reputations also dominate search engines, poor quality Daigous that have a poor reputation and may damage the brand should be avoided at all costs, with a Chinese review and feedback culture as strong as it is negative re-sellers will have a poor online reputation which could be transferred to your brand.. More on this later.
Why is Daigous so effective?
Daigous add a strong social element to sales, they sell into their own communities and networks. Quality Daigous have built up a strong reputation which is then associated with the product, a good method for branding.
In addition, they utilize Chinese networks to personally message and promote products on their news feeds on platforms such as WeChat & Weibo. They speak your consumer’s language and have pre-built connections, something that can take months if not years to build up. They also allow for direct Chinese payment and faster shipping if they are based in Mainland.
Brands from Down Under are turning to Re-Sellers
In 2016 only 58 Australian brands had flagship stores on China’s biggest e-marketplaces, with an additional 85 Australian brands sold through authorized Chinese online resellers on Alibaba-owned shopping platforms Tmall and Tmall Global.
Expensive retail prices, high set-up costs, and low trust in individual stores in China also encourage Chinese online shoppers to approach Australian Re-Sellers directly.
Are Daigous just a ‘magic bullet’… No.
Despite this powerful infrastructure turning to Re-Sellers for sales results is not necessarily enough, why? Because despite personal recommendations the Chinese BUY BRANDS, they are often searching for known brands with a reputation, Daigous is also, therefore, looking for well-established brands.
The Danger of Daigous
There are also a number of dangers when it comes to selecting Daigous. When using re-seller networks you are no longer in control of your brand, you outsource to the sales tactics of third parties you may know nothing about.
These Daigous can actually harm your brand, and your BRAND IS EVERYTHING in China.
There can be issues with inaccurate product information, ruthless sales tactics, poor customer service, no customer support network, and variations of product translations.
Attracting Quality Daigous
The answer then is you need to be selective, you need to source and build relations with a professional network of re-sellers. As a rule of thumb..
- Care about the product branding, they are seeking established brands in Mainland China and will not take on what they can’t sell or that which does not represent their professional image (they are businesses in essence).
- Will research online for your product, often using Baidu, China’s largest search engine, they will look at official websites, media exposure, and social media accounts, is this a product their networks will be able to trust that represents their own reputation?
- They will even look for e-commerce activity in China, is the product being sold with success, they can still offer the best prices and will not lose business to e-commerce platforms, especially if they have a trusted network but this also validates the brand.
Poor quality Daigous do not care about the brand and will ruthlessly attempt to re-sell but this can be dangerous, negative reviews on social media & in forums can be irreversible in an unforgiving market when it comes to e-reputation.
Yes, you have to balance the risk vs sales so our advice would be to select and build a consistent, quality network of Daigous that are in line with your brand values and will support a longer-term strategy for e-commerce in China.
Strategies to Build a Great Network of Sellers & Drive Direct Sales
Baidu Visibility & Reputation
Baidu is China’s largest search engine with 75% of all online research conducted here. A quality brand website that is visible in the search results carries a lot of weight. This can be SEO (so ranking in the natural search results) and also PPC (Pay Per Click) results.
Chinese consumers as well as Daigous research in Baidu for product reviews, information and to browse content, this is a content-rich market.
- Chinese Forums
Daigous are active in specific forums such as Tieba, Tianya, Zhidao, or Zhihu. These all have threads devoted to Re-Selling, you can ensure your brand is highly visible here. Posting covertly as other users & consumers is a very effective way of boosting e-reputation.
WeChat is the social pulse of China, it is the most important tool for branding. Business needs to set up an official account and then customize the account in HTML5 for a quality and smooth user experience. Creating a ‘micro-site’ promotes the brand aesthetic, you can always also link this directly to a WeChat store (10-15 SKUs) for sales via this social media platform.
WeChat is even known as the ‘WeChat Times’ simply because users research here for information, it is a closed network system however so traffic has to actively be driven to your account.
- Utilize Local Experts & Reputation
Local experts have built networks of Daigous, with a quality brand image, presence, and visibility online you can approach the best re-sellers that really drive results without the danger of harming your brand in the long run as described above, an intelligent & rounded strategy works best.
- Include Daigous as part of a Complete Strategy
Daigous is a great tool but does not obscure the more traditional cross-border approach, setting up the most effective e-commerce channels, driving qualified traffic for sales conversions, and branding on social networks such as WeChat & Weibo. Consider all your options carefully and ensure you speak with an expert.
Need an E-Commerce Partner in China?
We are a specialist e-commerce agency that focuses on helping brands grow in the lucrative Chinese market. We have worked with both Chinese and international names to grow their visibility, reputation, and sales. Contact our experts for more information.