Hong Kong’s ‘Daigou’ Trade Is Back. But This Time, It Has Reversed.

Hong Kong’s ‘Daigou’ Trade Is Back. But This Time, It Has Reversed.

For years, Shenzhen resident Elaine Kong made money by ferrying goods from Hong Kong into the Chinese mainland. Each weekend, she would cross the border and buy up crates of infant formula, Lancôme eye cream, and other products that were pricey or hard to find on the mainland, and then sell them on at a profit after returning home.

Now, as China finally eases travel restrictions after three years of strict pandemic controls, Kong is making regular trips across the Hong Kong border once again. But this time, she is carrying products in the opposite direction.

For the past few weeks, the 30-year-old has been buying trendy snacks and bubble tea in Shenzhen, and then delivering them to clients in Hong Kong. The demand from Hong Kongers and mainland students in the city has been astonishing, Kong says. She has already made dozens of trips and handed over more than 100 items.

“In the past, I bought things from Hong Kong for mainlanders and made money from that,” Kong told Sixth Tone. “It’s funny how I’m now doing it the other way around.”

Many Chinese professional shoppers, or daigou, have jumped on this same trend since the Hong Kong border reopened in early 2023. Shuttling goods from Shenzhen into Hong Kong has become so common, the phrase “reverse daigou” has become a buzzword — and a symbol of how much has changed since the COVID-19 pandemic first erupted.

Before 2020, the daigou trade was a massive industry in China. Around 1 million Chinese were said to be employed as daigou, who primarily made money by bringing foreign products into China.

In some cases, daigou helped mainlanders avoid high import taxes on luxury goods. Other times, they helped them access products that weren’t available in mainland stores, such as certain foreign cosmetics or baby formula.

Chinese authorities passed a law to stymie this gray market in 2019, yet the daigou trade continued to grow. The daigou industry generated $40 billion that year, according to one estimate.

Then came COVID. As countries around the world imposed travel bans, shuttered shopping malls, and canceled international flights, the daigou trade went into a deep freeze.

It’s much more difficult to do now than before the pandemic … The border checks have become much stricter.

– Yang, Shenzhen-based “daigou”

The industry has never recovered. With China retaining travel restrictions for three years, mainland consumers found other ways to source overseas goods. More and more international and Hong Kong brands have set up stores on Chinese e-commerce platforms Tmall and JD.com.

Meanwhile, the tighter border checks that China introduced during the pandemic have remained in place. When Hong Kong fully relaxed travel restrictions in February, daigou found that their former business was no longer viable.

“It’s much more difficult to do now than before the pandemic,” a Shenzhen-based daigou, surnamed Yang, told Sixth Tone. “The orders have dropped, and the border checks have become much stricter.”

Until 2020, Yang made a living by buying up cosmetic products in Hong Kong to sell to customers on the mainland. It was usually possible to bring goods across the border unnoticed, allowing her to avoid paying expensive duties.

But now, she has to open her bags for inspection almost every time she crosses the border, Yang said, and declare the value of the goods she was carrying. Individuals are only allowed to carry 5,000 yuan ($730) of goods into the mainland every two weeks. 

It’s impossible to make a decent living by transporting such a small volume, according to Yang. “For goods worth 5,000 yuan, I can only earn around 600 yuan,” she said.

Kong delivers snacks from Shenzhen to customers in Hong Kong. Courtesy of Elaine Kong

For this reason, many Chinese are starting to explore the “reverse daigou” trade. Since late February, hundreds of reverse daigou ads have been posted on social platforms including Facebook and Xiaohongshu.

They appear to be attracting plenty of customers. There are a huge variety of trendy snacks in mainland China — known as wanghong meishi, or “viral cuisine” — that are hard to find across the border in Hong Kong.

Bubble tea from Yidiandian, Master Bao’s pastries, and specialty products from Alibaba’s Hema supermarkets or Walmart’s Sam’s Club stores are all reportedly popular choices for reverse daigou

The handover usually takes place at a station along the Hong Kong metro’s East Rail Line, which runs from the border to Hong Kong Island, so the daigou don’t have to exit the metro and pay for an extra ticket.

The profit margin for these reverse daigou deliveries is small: Customers often pay just 15 yuan per bubble tea delivery, three daigou involved in the trade told Sixth Tone. But the daigou say it also has a number of advantages compared with their former business.

First, the daigou can make use of the fast and super-cheap delivery services on the mainland. Whenever a client in Hong Kong makes an order, the daigou can quickly get the snack delivered to their homes in Shenzhen. This means they no longer have to run from one store to another, as they did when they were buying up goods in Hong Kong.

Second, daigou no longer have to make large upfront purchases of goods. Now, the clients place the order and pay for the delivery in advance.

“When I used to daigou Hong Kong goods to mainlanders, I once accidentally bought a fake product and lost a lot of money,” Kong said. “Reverse daigou doesn’t require bearing risks like that.”

Third, it is far easier to bring things from Shenzhen into Hong Kong than the other way around. Although Hong Kong restricts food imports, the border inspections are very lenient, Kong said.

Kong now works five hours a day delivering snacks, earning around 300 yuan. She considers it the perfect job for her at the moment, as she has two young children and doesn’t have time to work a full-time job.

“I want to try my best to see how far I can go, and whether I can optimize the logistics and do it better,” she said.

She has already invented a few tactics to save her time and energy. For example, she uses the real-time location sharing function on WeChat, a Chinese social app, to give her clients an idea when she will arrive at the station.

Kong is also thinking about developing a WeChat mini-program to coordinate orders, payments, and deliveries, just like some Chinese startups did to organize group-buying networks during the lockdowns of 2022.

But she is also worried that if the reverse daigou business becomes too big and formalized, it could create complex legal issues that will eat into her profits.

“I am sure making a platform compatible for both systems in Hong Kong and the Chinese mainland is very difficult,” Kong said. “The daigou industry is profitable precisely because it bypasses all these difficulties.”

Editor: Dominic Morgan.

(Header image: A group of women pose for a photo outside Luohu Port in Shenzhen, Guangdong province, Feb. 12, 2023. Shi Yan/IC)

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Author: Georgianna Buresh

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