Overseas purchasing agents target niche market but face grim prospect

Updated 2017-02-15 11:33:46 CGTN

Millions of WeChat users in China are not immune to the excessive advertisements pushed by purchasing agents on the messaging app, which indicates the popularity of such shopping apps. But how do they survive amid cut-throat competition with numerous similar apps providing overseas products?

Because of tax and limited choices in domestic market, many Chinese people buy overseas products from the Internet for better quality and lower prices.

With preferential policies to overseas e-commerce platforms, the industry has seen rapid development. An estimated 41 million people in China shopped online for overseas products last year, 78.3 percent higher compared to a year ago, according to a report by iiMediaResearch, a Hong Kong-based global leading mobile internet organization.

Lin Yumeng is an avid user of such apps.

"I used to buy from agents, but since I downloaded Little Red Book, an app that is based on community operation system, where I can discuss and share with other users, I've found it more helpful and convenient. It is hard to refund if you buy from an agent, but apps usually apply seven-day return policy."

But Li Jie, an experienced online shopper, has never used any apps to buy overseas products.

"I like some small brands from Seoul, while apps usually sell popular and big names products. I cannot find what I want in those apps, so turning to purchasing agent is the best choice for me."

Bao Xiao has been an agent for seven months and is willing to do business as long as she can. The 26-year-old flies to South Korea mainly for luxury brands and cosmetics.

"I enlarge my customer network by starting from my friend, then my friend's friends," she shared her experience as a purchasing agent. "I am a VIP for a lot of brands because I have shopped a lot. Besides members' price, there are discounts for festivals and holidays, so I can buy products at more favorable prices."

"I always ask Bao Xiao to buy overseas products for me, and I introduce her to my friends," said Liu Jiajia, her friend and customer. "There are many apps now, but it is hard to tell whether they sell authentic products. My friend is more reliable."

However, being a purchasing agent is not easy in China nowadays, which is greatly affected by currency exchange rates. Meanwhile, Chinese authorities are taking tough stance on tax evasions.

In 2013, a former flight attendant was sentenced three years in prison for smuggling duty-free cosmetics and selling them online. By doing so, she evaded 1.1 million yuan (about 160,000 US dollars) in taxes. On top of that, China has cut consumption tax on various goods to boost growth.

Yu Peili, researcher with China's Northeastern University, said "purchasing agents pressure e-commerce platforms to develop their own advantages, which has added vigor to the market."

"But with the development of domestic companies and brands, especially with the expansion of free trade zones in China, purchasing agents may fade out sooner or later."

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