Buy Them Back To China
A New Form of e-commerce
On September 20, a day after the new iPhone 6 and iPhone 6 Plus hit stores across the world, NYC based filmmaker Casey Neistat posted a video on YouTube called “Black Market Takes Over the iPhone 6 Lines.” The six-minute video focused on showing the Chinese line sitters, who would wait outside of an Apple store for days, sleeping in garbage bags and facing the threats from NYPD just to be in the front of the line. They weren’t the only ones waiting in line, but unlike those Apple fans in the line who showed their excitement for the new Apple’s products, they seemed to lack all the enthusiasm.
So why were they there if they weren’t really so hyped by the new iPhones?
In Chinese, they are called “Daigou”, which stands for the people who buy stuff for others. What they do isn’t for free. In turn, customers that make the requests need to pay an extra amount of money to them.
On my WeChat Moments, a Chinese social media platform that has millions of users, a friend of mine posted a photo showing a cardboard box filled with iPhone 6s without Apple’s packaging, with text below it saying: “Ad: In stock. Limited quantity. Ask if you’re interested.” At the time he posted the picture, Apple hadn’t announced the date that it would bring its new iPhones to the Chinese market. The contents of that cardboard box are worth thousands of dollars and apparently they were brought to China by other illegal methods.
Since Apple didn’t make clear the release date of the new iPhones for customers from China, the ones that they are able to buy now were all previously sold in other parts of the world. And the price tags they put on these phones are mind-boggling. The iPhone 6 is sold from $1,430, and the iPhone 6 Plus from more than $2,400. These are more than 2 and 3 times of the U.S. price, yet demand seems off the hook.
It is in the last years, shopping overseas without actually traveling abroad became a possibility and then a trend in China as e-commerce continues to grow. The whole process works like this. Online sellers from China look for buyers in countries like America, where products are normally sold first and comparably cheaper. They make orders from them. These buyers then go to buy the requested products themselves or pay people to get the products for them, people like those shown in Neistat’s video. If it’s a small order, they ship the products through services like USPS or FedEx. When the quantity is large, they look for companies that will help them bring those goods to China. In other words, they smuggle them to China.
Sun is a 24 years old Boston University student from China. As a huge basketball lover, Sun also loves collecting shoes. It became easier for him to buy the shoes he wants since moving to Boston a year ago. Not only can he find more designs either online or from chain stores like Footlocker, Champ or Bodega, they are also much cheaper. He then came up with the idea of collaborating with some of the biggest online shoe sellers on Taobao, China’s biggest e-commerce platform.
Every week, Sun first go through the websites and social media accounts of some major shoe brands. He then provide Taobao sellers with information including discounts and new arrivals of these brands. Based on the information from Sun and customers’ demands,sellers then make orders from Sun. And within two days after Sun receives an order, he needs to get the shoes and ship them to China.
A pair of Air Jordan usually costs Sun $170. In China, these shoes are sold at $40 or $50 more, and you won’t find all those designs that are available in America in Chinese shopping malls. Customers then needs to pay $400 or 500$ more to get those shoes from online sellers. The revenue for them is huge.
Unlike Sun, Tang, a student from Worcester Polytechnic Institute is managing her own online store. Her motivation isn’t about money. “I just enjoy shopping. I love buying things,” said Tang.
Tang’s store, called “A House of Wishes”, sells cosmetics and women’s handbags. These products are sold at prices that are 60 percent lower than what they can find from authorized merchants, which is what drives shoppers to her store.
As a seller herself, buying things isn’t the only part of her job every week. Selling them is the harder part. Tang spends at least 8 hours a week on her store, and a big part of the time is spent on chatting with shoppers and doing customer service. “It can be really annoying. They keep bargaining with you and you just have to get used to that.”
Besides this, Tang also need to think of ideas to promote her store and the products she sells. From what she knows, there’re hundreds of other students in the U.S. doing the same business. The competition is quite steep and she admits her store isn’t that profitable. “You need to have a lot of cash to generate big revenue,” said Tang. In most cases, Tang makes 10% of the budget she put into each order and it demands a lot of efforts.
Whether it’s iPhone, Nike shoes or cosmetics, more and more Chinese today are willing to take the risk, the time and the money to buy products from overseas. What causes this are mainly insane import taxes and a strict product screening system. Since the taxes are high, manufacturers are forced to raise the prices of their products if they want to enter the Chinese market and make a fortune from it. And even when they decide to bring their products to China, they have to wait for Chinese government’s approval, which can take from months to years.
It’s a weird thing when you think that most of these merchandise come from Chinese factories, yet it is so hard for Chinese customers to buy them with reasonable prices. It’s also under this circumstance, we have iPhone line sitters sleeping in a garbage bag on the street, and students like Sun and Tang. In Neistat’s video, those Chinese look like both criminal and victims. Maybe that’s just how the market works.
