• Ernie Diaz

Daigou Another Day

With the profusion of European luxury cosmetics in the Chinese market, it's hard to believe they're technically banned. Why? Because rabbits don't take makeup tests in Europe. In China, they have to, for imported products. No animal testing, no legitimate channel.

Until now, that is. The animal testing requirement for most imported products will be dropped. Also dropping: the incomes of professional "personal use" purchasers, know in China as daigou (die-go). It pays, and it's semi-honest work. About the only use for post-WeChat-Weibo nowadays is for daigou to sell those "extra" imported bags and cosmetics they bought duty free in Hong Kong, or at the airport.

"In China, cosmetics are a $65 billion industry," says Edward Lehman. "Now that more legitimate channels are available for foreign brands, still in much more demand than domestic, there are going to be great opportunities for cooperation with both online and offline channels."

"Global brands used to daigou getting their products to mainland customers must now reposition. It means a rebalancing of market share, and chances to pull ahead, or fall behind."

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