Chinese consumers are the significant driving force to boost the global prestige beauty market growth. ASEAN countries like Singapore, Malaysia and Thailand are important markets for Chinese daigou shoppers to buy prestige beauty products for their customers in mainland China. These countries are traditional key markets for almost all the prestige beauty brands in the world, having the most complete brand and product choices with relatively low price compared with the market price in mainland China. On the other hand, Singapore, Malaysia and Thailand all have a big and sophisticated overseas Chinese community which has deep connection with a wider customer network in mainland China. And these three countries are also key travelling destination for Chinese tourists, who’re also an important component of Chinese daigou shoppers.
Today Chinese consumers have many different ways to purchase prestige beauty products, not just limited to official channels in mainland China. They can buy these products when they’re travelling overseas, or buy from cross border ecommerce platform like TMall, or C2C online stores on Taobao.com, or any friends who are living or travelling in overseas markets. From this you can see there’s a huge grey market for prestige beauty products outside China. As tracked and estimated by Think China, in 2018, the sales value of prestige beauty products by Chinese consumers outside China in APAC is about 16 billion euros which is twice of the sales from official channels in China. Among which, we estimated that 7.5 billion is purchase through daigou shoppers in 5 key APAC markets: Japan, Korea, Malaysia, Hong Kong and Australia. If we zoom into Malaysia, the sales value of prestige beauty products by Chinese daigou shoppers in Malaysia travel retail channels is about 100 million euros. This definitely is a huge market that no brands should ignore.
To understand this potential market, we need to have a clear picture of how overseas daigou operate and what’re the channels for them to sell the products in China. First, the daigou shoppers are not a simple type of demographic group. There’re four levels of daigou in the overseas market: