On November 30, 2014, Yang Gu, a Chinese student in California State University, Northridge, received a phone call from her cousin in China asking Gu to buy coach bags from the coach outlet store for her. When Gu headed to the retail store of Coach Factory in Citadel Outlet, Los Angeles, she found that the store was flooded with Chinese customers. Among them, except visitors coming to the U.S. for shopping, many are purchasers buying for others like Gu.<\/p>\n
According to 2013 China eCommerce Market Analysis Report published by China Research Center, 40 percent shoppers purchasing overseas via purchasing agent is motived by cheaper than local pricing of luxury brands.<\/p>\n
<\/a><\/a><\/p>\n Coach outlet online store, coach factory.com, opens to the public for several days per month with much lower price than regular market price. Realized that\u00a0the price of luxury goods is much cheaper abroad, sites like Coachfactory.com has been a popular online store for Chinese customers including Gu’s cuisine, Ming Zhu. This year the website closed Zhu’s account, because of her over purchasing history, according to Coach’s customer service.<\/p>\n <\/a><\/p>\n To sustain ability to control the distribution and pricing of products, brands tend to manage the amount of products to be sold online. This year, some Chinese buyers with China\u2019s IP or Chinese credit card payment methods were also blocked in the online store. To solve the problem, in Zhu\u2019s case, a relative studying in the U.S. enables her to buy bags without extra expense, while more often, customers like Zhu seek for overseas purchasing agents as alternative with extra service fee. Gradualy, a hidden market of purchasing agents (called “Daigou” in Chinese pinyin) is emerging.<\/p>\n Purchasing agents shop for “commissions.” Most of time, this “commission” means price difference between original price and offering price. In a overseas purchasing site\u00a0under Tmall (Alibaba), \u00a0an Armani shoulder bag with original price at\u00a0250 Euro is charged for 3,300 RMB. With exchange rate of 1:9.3, each bag comes with 973RMB profit.\u00a0<\/a><\/p>\n The scale overseas purchasing agency market is getting biger year to year, according to the 2013 Chinese E-Commerce Market Monitoring Report. In 2013 total transaction via overseas purchasing agent market is $12.30 billion, a 59 percent up from 2012. Analysts estimated that the scale would be doubled in 2014 to $24.84 billion. Popular goods are clothing, bags, cosmetics and beauty products, milk powder, and electronics.<\/p>\n