More Chinese consumers are buying Australian milk formula and other grocery items. (Photo : Getty Images)
This is an opportunity that Chinese entrepreneurs in Australia are taking advantage of. There are currently 40,000 daigou in Australia.
Daigou is a term referring to Chinese entrepreneurs who are based overseas and who sell products online and ship them to China.
These online merchants started out with selling luxury items like Gucci handbags. Now, merchants are selling baby formula milk or what they call "white gold."
Consumers are now into buying everyday grocery items online because of the repeated incidents of tainted food being sold in stores. Other consumers are buying food supplements and diet pills.
ThinkChina predicted that this boost in cross-border trade will exceed $1 trillion this year.
Na Wang, a daigou in Australia, said that consumers are looking for quality products and do not mind if the products are expensive.
She said, "People in China just love Australian products. They like the quality. Nothing is too expensive for them."
During the height of the milk formula scandal in 2015, Australian consumers criticized the Chinese for exporting too much product and left local consumers scrambling for milk.
However, the government saw the potential of an increasing market. The government, through the Australian Trade and Investment Commission, launched the cross-border e-commerce, a channel for exporters to enjoy tariff exemptions.
According to a report released by McKinsey and Company, a global market consultancy group, cross-border trade was estimated at AUD50 billion or 254 billion yuan.
Australia is now the fourth biggest importer of goods to China. Other countries which ship to the country are U.S.A., South Korea, and Japan.
Peter Nathan, chief executive of A2 Milk, said, "We think daigou are good for both the local economy and they are very good for our business. We clearly believe they are a positive force and it's fair to say that it is something we are assessing."
