The Chinese luxury economy is booming. Chinese consumers now account for one in three luxury purchases and will make up 50 per cent of all luxury spending within the next decade. Yet many Chinese people still rely on third-party buyers to make their purchases. Today, one of the most secretive — and lucrative jobs — in fashion is that of the daigou. The word, which means “buying on behalf of”, refers to those Chinese agents who buy products in the west, taking advantage of cost or favourable exchange rates, in order to sell them on to clients back home. In 2016, Bain estimated daigou accounted for £5bn of sales. And if what they do is not precisely illegal, it’s definitely grey: the sales are generally off the books and, as they pretend to be regular customers, they blur the line between what is being bought for personal or commercial use. The “tips” they pay to shop assistants to ease transactions are equally debatable. On the one hand, the tips are a legitimate part of China’s gift-giving culture; on the other, it’s bribery. Here, two agents tell their stories.
Chelly (not her real name), 24, has worked full-time as a daigou in London for three years
Altogether there must be about 1,000 daigou agents in London. I have about 4,000 to 5,000 clients. Some of them live in the US, Canada and Australia, but 98 per cent of my regular clients are from mainland China. When business is good, I can earn between £35,000-£46,000 a month.
My clients are rich housewives who buy luxury products for their husbands and children. I try not to buy things for middle-class customers. They are always suspicious about whether items are real, even if they only spend a few hundred pounds. Wealthy housewives spend hundreds of thousands without any questions.
My relationship with shop assistants in London is one of mutual benefit. They all know I’m a daigou agent. Nice sales assistants allow me to purchase many items, which benefits their commission in return. Nasty sales assistants ask me to offer “tips”. A sales assistant at one of the top French houses asked me to pay £100 extra to buy their latest handbags; if I buy three bags, I pay £300 cash in tips. At another leading French luxury store, they asked me to pay an extra £2,000 cash on top of the original prices. But I wouldn’t report them — if I did, I would be blacklisted by sales assistants from other stores.
Chinese sales assistants are easier to negotiate but they don’t have any power. One of them once told me, “We Chinese can never be a store manager for luxury brands.” European sales assistants are less flexible, but I’m quite an outgoing and sociable person. I’ve built up good relationships with the sales assistants, store managers and brand PRs by taking them out for dinner.
When business is good, I buy £10,000 worth of items a day, and £30,000 worth of items a month. I once bought 105 pairs of shoes from a store in one day
I don’t charge my clients higher than the original prices. Normally I get discounts from stores, at least 10 per cent. The more popular a brand is, the more difficult it is to get discounts. Chanel won’t give me discounts. In that case, I charge my clients about 10 per cent more than the original price.
Three years ago my clients were keen to buy classic items such as Burberry trenchcoats and scarves, the Louis Vuitton Speedy bag, the classic Chanel flap bag. Now they are more into niche products such as Goyard, Delvaux and Moynat. Gucci started booming last year.
I buy everything: make-up, jewellery, handbags, shoes, clothing, baby strollers and even baby powder, which is three times more expensive in China than in the UK. When business is good, I buy £10,000 worth of items a day, and £30,000 worth of items a month. I once bought 105 pairs of shoes from a store that was on sale in one day. Stores offer buyer discounts for me, which ordinary customers can’t have.
Some stores have refused to sell items to me. They prefer local customers to buy their hot products, rather than Chinese buyers. There are also many Korean buyers, Japanese buyers, and Thai buyers, and they buy a lot as well. Those people who queue to buy the brand’s latest items, 99 per cent of them are daigou. Ordinary customers wouldn’t know the date a new collection arrives in stores.
My clients don’t normally give me a difficult time. But I have been disappointed. One of my regular clients, who normally spends Rmb50,000-Rmb60,000 [£5,700-£6,700] a time, ordered a Fendi bag and then claimed the bag she received was fake. I showed her the receipt, and a sales assistant and store manager video-called her to prove the bag was genuine. She didn’t believe us. A £6,000 watch that I sent out was confiscated by the Chinese customs yesterday. I used to get parcels released from customs by using my connections in China, or by paying them. But this time it couldn’t be released at all. As more Chinese citizens travel abroad, they won’t need me any more. A career as a daigou won’t last, that’s for sure.
Lin (not her real name), 37, is a housewife and part-time daigou agent in London
In 2014, I realised I could earn my monthly living costs very easily by selling baby milk powder to clients in China. I personally didn’t like buying stuff for others, but when my friends asked me to, I felt embarrassed to say no. Back then I wasn’t ready to be a luxury shopper. I thought it too risky, and would cost too much to invest. But my friends encouraged me, and I gradually started my career in December 2016.
Years ago it was easy to make money as a daigou agent. Now the market is more competitive. Today, I have five different agents who introduce clients for me. I raise the original UK price by 3 to 5 per cent, then sell to clients in China. If products are not very expensive, I raise the price by 10 per cent. Although the price differences are not that much now between China and the UK, my clients are still keen to buy things from overseas. They reckon luxury products purchased abroad are “better”. They also have doubts about whether China’s flagship stores sell the real stuff or not.
My clients want to see what products look like in stores, rather than on official websites. I’ve learned to make a snapshot very quickly then walk away. I’ve been warned to not take any pictures at Gucci and Louis Vuitton and once, at the Chanel store in Harrods, the sales assistants told me to delete the pictures I took for my clients. I don’t like to shop in Bicester Village because I need to show products to my clients by live stream, which is exhausting.
I know some buying agents dress well, but I wear high-street brands. I don’t mind carrying a bag that costs less than £100. It’s up to them how they look at me. If they don’t want to sell things to me then I will walk away.
I don’t usually buy extremely expensive things, in order to reduce the risk of losing money. I bought a Gucci handbag on a client’s behalf, but then she changed her mind and I ended up losing £2,800 because the brand could only offer me a voucher, and I have no idea what to do with it.
My children always wonder, how come I am rich enough to buy so many luxury goods? It feels weird. When I was buying milk powder for my clients in China, my children asked me: “Why are you buying so much? What are children in this country going to have?” I can’t deny that they are right.
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