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Thursday 21 October 2021

Patchy recovery in China daigou demand – report

8th October 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

Chinese demand for New Zealand products through daigou trading is recovering following the outbreak of Covid-19, according to new research which also looks at the long-term viability of the channel.

A2 Milk used the daigou market to move product.

Plant & Food Research’s Chinese consumers’ perceptions and demand for New Zealand foods: a Post-Covid perspective of daigous report looked at the ‘buying on behalf’ trade, which uses expats to buy products and send them back to consumers in China.

The Covid-19 pandemic and resulting lockdowns caused widespread disruption to the channel, which was largely used for products such as milk powder and dietary supplements, with the impact of stunted sales documented by leading dairy companies such as A2 Milk.

“Many daigous stated that their business was gradually recovering from the pandemic, yet two thirds of them were still performing worse, and only 9% performing better than before Covid-19,” said the report lead, Dr Ivy Gan, a scientist from the Stakeholder & Consumer Intelligence Team at Plant & Food Research.

The majority of daigous reported orders decreasing post-Covid, while some saw an increase in orders for dietary supplements, milk powder, and honey.

Despite the drop in order amount, the report found that the majority of daigous believed that Chinese consumers’ trust, and their interest in, and demand for, New Zealand brands and products remained the same, if not increased.

“New Zealand brands are still appealing to Chinese consumers not only because of the ‘clean green’ image but also the ‘kind and trustworthy nature of kiwis’.”

While there was resilient demand for New Zealand foods, there was a perception that daigous might be squeezed by competition across channels, as more New Zealand brands sold direct to Chinese customers through online stores.

Where the daigou channel remained uniquely competitive was its strong trust-based relationships with customers. The three core values that Chinese consumers were seeking via the channel were high quality, authenticity, and cost-effectiveness.

“This study indicates that daigous play special roles between Chinese consumers and New Zealand food brands,” the report said.

“For brands, daigous collectively form a sales network which could penetrate the Chinese market to an extent that would not be achieved by regular marketing campaigns, in a more trusted and efficient manner.

“Daigous can also fill the information asymmetry between Chinese consumers and New Zealand brands by using themselves as the living ambassador to showcase a New Zealand food experience.

“Furthermore, trusted by their customers, daigous could become the gatekeepers who may have a great influence on consumers’ perceptions and preference for a specific brand or product, either positively or negatively.”

The research which interviewed and surveyed more than 200 daigous was backed by the Consumer Insights Programme of the High-Value Nutrition (HVN) Ko Ngā Kai Whai Painga National Science Challenge.

Read the Chinese consumers’ perceptions and demand for New Zealand foods: a Post-Covid perspective of daigous report here.

 

 


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