International students working as daigou, selling Australian products at inflated prices overseas

International students are buying baby formula, skincare products and vitamins in bulk at Melbourne chemists and then making big money by exporting the items overseas.

Chinese personal shoppers are making big profits reselling coveted Australian baby formula, vitamins and skincare in asian markets.

Australia’s sought-after baby formula, skincare products and vitamins are proving big business for international students with close connections in Asia.

Many are making thousands of dollars after clearing them from Australian shelves and reselling them at hige profits overseas.

The Sunday Herald Sun spoke to several international students working as daigou — personal shoppers — who make huge profits sending milk powder and other coveted items to China.

Daigou have found a lucrative business in clearing Australian shelves of formula to sell overseas.

After clearing Melbourne shelves of baby formula, buyers often then resell them at exorbitant prices — more than $90 per can — on popular Chinese app WeChat and job website and forum yeeyi.com.

Last month, a supermarket at Chadstone shopping centre came under fire for allowing dozens of shoppers, believed to be syndicated exporters, queue up to snare tins of baby formula, flouting the two-tin per customer policy.

Shoppers, believed to be daigou, lining up outside a Chadstone supermarket in July.

Bella, from Melbourne, who did not want her surname published, worked as a daigou for almost a year, and said students could earn big bucks working as personal shoppers.

“If students have the right connections then it is possible to make more than a $1000 a week,” she said.

Bella said she previously set up her business online and marketed herself through apps including WeChat, adding about 20 per cent commission to the total cost of each order.

“China trusts Australian brands and that’s why there has been such a demand for it. It’s also much cheaper to purchase from Australia then on the shelves there.”

Melbourne University student Jingwen Tan, said she began working as a daigou because there was a high demand for health products and milk powder in China.

“China’s demand for Australian products is large, and the domestic market price is relatively high, giving daigou a living space. Therefore, more and more students make money by doing it,” Ms Tan told the Sunday Herald Sun.

She said she often sold health products and made a profit of up to $10 per item.

“The income is not fixed and calculated on a weekly basis — some of the students who come here will try to do daigou, but if they can’t earn any money or have no customers, they will give up.”

Ms Tan said China had recently cracked down on exporting goods including baby formula.

“China is very strict with daigou inspections. I no longer advertise on WeChat. I will do it when acquaintances come to me to buy things.”

Dr Gary Mortimer, from QUT’s business school, said daigou shoppers were often international students or tourists visiting Australia.

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“Students doing this have found a viable market, which could be selling into a small regional town in China — this would be a better alternative in their view than working a legitimate job and paying income tax,” Dr Mortimer said.

Monash University senior lecturer Dr Alice De Jonge, who specialises in Asian business law, said while China was regulating the daigou market, there was little incentive to limit expenditure in the Australian economy and markets.

“Rather, the incentive for Australian regulators is to allow as much foreign money as possible to exert its buying power in order to boost a stagnating retail sector,” Dr De Jonge said.

Belinda Jennings, founder of national mums network Mum Central, said she could understand why parents were frustrated when formula shortages occurred.

“I really empathise with Chinese parents who are sceptical about the quality of milk in China after the crisis in 2008, but something does need to be done to meet the demands to help mothers here,” Ms Jennings said.