For the West, China's Daigou market is an 81 billion dollar problem

The "daigou" phenomenon, which involves agents buying luxury goods abroad to avoid taxes and reselling them in China, has grown into an 81 billion dollar business, marking a 40 percent increase from 2019.

Luxury brands face a persistent challenge from this parallel commercial system. LVMH Chairman Bernard Arnault back in January said in no uncertain terms: “For your image, there is nothing worse (in reference to daigou).

A report called The Daigou Index 2.0 by Shanghai-based consultancy firm Re-Hub and cited by Jing Daily newspaper, underscores the “typical Daigou now is more than likely a large organisation with significant buying power rather than your average Chinese international student making a bit extra on the side.”

Concerns about daigou's impact have frequently been voiced, with industry experts stating that the parallel market in China could present a significant threat to luxury brands in the coming years.

Despite efforts to combat it, the daigou market continues to thrive. The Chinese middle class is becoming more cost-conscious in their luxury purchases, preferring discounted products from daigou. Additionally, this system aids in introducing lesser-known luxury brands to a broader Asian audience, Jing Daily said.