Cross-border shopping: A study of the Daigou business model
Creators: name: Ding, Han
Publisher: name: University of Tasmania
Year: 2024
Subjects: classificationCode: 3506
subject: Marketing
subject: FOS: Economics and business

description: ‘Daigou’ has a literal translation of ‘buying on one’s behalf’. Specifically, Daigou shopping refers to an informal customer-to-customer (C2C) global personal shopping activity whereby Chinese personal shoppers fill small private orders by purchasing non-Chinese branded products from countries including Australia, Canada, New Zealand, France, Japan, South Korea and the United States. These products are then sent to individual Chinese customers via mail or a courier service. Over the last decade, the Daigou industry has grown significantly, and despite the impact of COVID-19, the industry remains robust with a global value estimated between US$40 billion and US$100 billion, and with concomitant nascent scholarly interest. The emergence of various individual actors, and specialist stores, agents, and large online retail platforms, has extended the notion of the individual Daigou shopper and the broader Daigou industry, and the impact of Daigou on local economies as well as driving demand and sales of locally manufactured products. In this way, Daigou shoppers satisfy customers’ needs, drive demand and sales of various brands and products, and facilitate the entrance of international brands into the Chinese market.Despite the influence of Daigou activities on driving demand for brands and sales, there are few studies examining individual Daigou shoppers, and their important role in the Daigou ‘ecosystem’, which is a unique combination of C2C and cross-border commerce. Additionally, although both cross-border business transactions and C2C commerce have been widely discussed in the academic literature (with research on cross-border commerce tending to focus on the B2C context), there is a dearth of marketing research examining Daigou activities. The small number of studies examining the Daigou phenomenon focus on tourism, mobility, digital labour, and parallel importation.Using the lens of social commerce, customer trust and loyalty, this study aims to address the gap in the literature to explore how individual Daigou shoppers market brands and products and promote their shopping services, as well as the strategies they use to manage the customer-shopper relationship. The study also examines various strategies at different stages in the life cycle of trust, investigates the development of customer loyalty, and the impact of ‘deviant’ shopper behaviour on the customer-shopper relationship.The research questions posed are:RQ1. How do Daigou shoppers promote and market their services and products?RQ2. How do Daigou shoppers establish and maintain trust and loyalty with customers?RQ3. How does deviant behaviour affect the relationship between the Daigou shopper and customer?To address the research questions, the study used a qualitative methodology. Data were collected via semi-structured interviews with 30 individual Daigou shoppers, in the state of Tasmania, Australia. Interviews were recorded and transcribed. Thematic analysis was conducted on the interview transcripts, supplemented by further analysis using computer-generated qualitative data analysis software – Leximancer – to draw out relevant themes and concepts.The findings show referral plays a critical role in Daigou shoppers’ acquisition of new customers. Daigou shoppers predominantly use four strategies for marketing and promoting products and services: a product strategy, a social media marketing strategy, a word-of-mouth marketing strategy, and a pricing strategy. They also use two additional tactical approaches, referral marketing and content marketing. In terms of developing customer trust, it was found that initiating trust mainly relies on two mechanisms: the process of trust transfer, and the reputation mechanism represented by customer comments or reviews. In addition, the demonstration of evidence of product authenticity and interaction between parties were found to be critical to building trust. In this regard, credible information provided by a Daigou shopper, combined with a positive purchase experience, promotes trust between the shopper and their customer, to such an extent that experienced Daigou shoppers tended not to consciously work on building and maintaining trust with their customers.The research further showed individual Daigou shoppers establish and maintain loyalty in three ways, via an emotional pathway, trust, and an objective pathway. Three specific emotional pathways were revealed: making customers perceive that Daigou shoppers are thinking about them; developing a friend-like relationship with customers, and making customers feel good. The objective pathway referred to the price set, and the limited choice of purchasing channels that customers have. It was also found that deviant behaviour (for example, not disclosing the correct information about where a product has been purchased) was common among Daigou shoppers. Through exploring the causes of such behaviour, deviance was found to be related to primary factors: product authenticity, place of purchase, and price. Deviant behaviour had a detrimental impact on customers’ trust in Daigou shoppers and a single breach of trust on the part of a Daigou shopper (as perceived by a customer) could lead to the permanent loss of patronage.The findings have both theoretical and practical implications. As one of the few known marketing studies on Daigou, this research contributes to the emerging literature on how Daigou shoppers market and promote their services and products in the context of C2C social commerce. This study also contributes to the extant research on trust development in a marketing context by providing a comprehensive demonstration of the life cycle of trust, being composed of five stages: initiating, building, maintaining, declining, and regaining (repairing). The study also showed how different forms of trust evolution can be built into the stage of building trust. The study also makes a scholarly contribution by highlighting how individual Daigou shoppers establish and maintain customer loyalty, as well as showing the impact of deviant behaviour on the customer-shopper relationship. From a practical perspective, the findings have important implications for the Daigou industry by presenting recommendations for individual Daigou shoppers about how to best market products and services, as well as managing the customer-shopper relationships in terms of trust and loyalty. The findings are also valuable for local brands and retailers in understanding the Daigou process, and the impact of individual Daigou shoppers on promoting and driving demand for products.