Chinese E-commerce retailer rejects Australian daigou buyers

Daigou buyers from Australia – individuals and groups who buy infant formula and other consumables in offshore retail outlets, selling them at huge mark-up prices in China – have been locked out of one China’s fastest-growing online malls.

Aomaijia, which boasts more than 30 million registered customers, will not allow individuals or unauthorized distributors to set up online stores selling Australian products. The company instead offers a high level of back-end services to its suppliers, which it says is a far more sustainable business model.

“Daigou have filled a market need in China,” said Aomaijia Group CEO Maggie Liu; “while they actively promote Australian brands, in reality they operate a rather unsophisticated and inefficient distribution network. The Aomaijia platform was created to give suppliers, like those in Australia, better control of their branding in China but also control over supply chain, distribution, sales volumes and ultimately their profits.”

The company’s global chief was in Sydney for the official opening of its Australasian procurement and supply chain office. It is the fifth such international office, with other procurement centres in Paris, Los Angeles, Seoul and Tokyo.

Five Australian consumer product companies – Sukin, Kids Smart, Nestle Australia, B.box and Tasman Ugg – were at the Sydney event, where they signed supply agreements with Aomaijia. They will join a dozen other leading Australian brands, headed by Swisse and Blackmores, which are already available across the e-commerce platform.

In total Aomaijia sells more than 100,000 product lines across 3,000 individual brands mainly from the US, Europe, Japan, South Korea and Australia.

Aomaijia connects with its customers across three platforms – a mobile phone app, an online retail site (www.aomygod.com), and a mini sales program operated on the WeChat social media app, which has more than 1 billion users. The company has 14 physical stores in key locations across all of China’s major first-tier cities, with plans to open 100 more over the next year.

The physical stores give customers the chance to test products, reassuring them of authenticity – a key selling point in China where consumers are increasingly wary of fake products, particularly in supplements, vitamins and infant formulas where Australian and New Zealand brands are very highly regarded.

“Aomaijia does not just offer product displays,” said Nestle Australia’s head of cross border development Matthiew-Nicolas Quentin. “Chinese consumers are highly demanding, they want to know everything about our products and that’s the role this platform plays.”