Foreigners buy Chinese Products Online
As online shopping became rather popular in China, many Chinese online shoppers also reached out to the international market. Thus, the term foreign purchasing agency appeared on major online shopping sites like Taobao.com and many online luxury shops. But recently another kind of website which helps overseas customers reach the Chinese online shops also appeared. Many of these purchasing agencies were transformed from foreign trade corporations and oversea study agencies in China.
Overseas Chinese Want Hometown Goods
Gotodaigou.com is one website that takes part in this purchasing agency business. Its customers mainly lie in Chinese people in America, Australia and New Zealand. The marketing director Robert said that they first found on the overseas students BBS that many Chinese overseas students expressed how much they missed their hometown products. But the purchasing and mailing procedures were rather complicated so they wished for some kinds of companies to realize this. In February 2011, Gotodaigou.com was founded, helping overseas customers purchase products from Chinese online shopping sites and mailing them altogether abroad.
10 Percent Commission for Oversea Purchases
Robert said that overseas customers purchase from China mainly for the sake of the low price. For example, an iphone case priced 20RMB from a Chinese shopping site will cost a customer in the US 40RMB to buy after shipping cost and commission is added. However, the same looking case may cost 200RMB even if he/she buys it on ebay. Apparently it is much cheaper to buy it from China. In addition, some buyers want products that only can be found in China, such as Chinese books or national decorations which are not exported. Many buyers purchases together with their friends or relatives to save shipping cost. One way to make a profit for these purchasing agency sites is commission. It usually takes up 10 percent of the total purchase. If the total purchase is too small, there will be a minimum amount of commission. Another way is to find long-term suppliers and to negotiate a lower price so that they can earn the price difference.
The Worldwide Economic Downturn Gave Rise to Purchasing Agencies
According to industry insider, countries in the Middle East, European Union and ASEAN can be the potential market for overseas purchase agencies. Because countries in these areas either have higher price in their light industry or have incomplete industry chain. However, when it comes to practical operations, agencies still face a lot of challenges. They need good partners in other countries to better solve problems such as currency exchange, customs related problems and after sale services.