Are Chinese ‘daigou’ hurting the Aussie economy?
In Chinese the word ‘daigou’ means ‘buy on behalf of’— and in the world of China’s booming middle class it also means ‘personal overseas shopper’.
Daigou in Australia pull in anywhere between AU $40,000 to $1000,000 selling Australian-bought goods in China.
The phenomenon exists worldwide, with the Financial Times recently estimating that daigou accounted for between US $5.1 billion and $7.5 billion of sales last year, or 12 percent of Chinese luxury spending. In Australia, Reuters report that daigou primarily purchase dairy, produce and health products for the health-conscious Chinese consumer.
Who loses out on Chinese spending?
Daigou purchases aren’t necessarily good news if you’re the taxman: Industry consultants have said that Australia could be missing out on as much as AU $1 billion in uncollected taxes when Chinese agents ship food products back home.
The vast majority of transactions are thought to occur offshore in daigou bank accounts, which makes it difficult for Australian tax authorities to monitor.
"The fact the fund flows might be going through a foreign bank account and never come into Australia doesn't alleviate the requirement to declare the income as taxable," Peter Janetzki, a partner in Ernst & Young's international tax services team, told Reuters.
Daigou spending is just another thorn in Australian Treasurer Scott Morrison’s side. Morrison is currently overseeing a national crackdown on tax avoidance by major corporations.
At the end of the day, daigou are the ones winning big in the shopping stakes. They communicate with clients back home via the messaging app WeChat and regularly charge premiums of 50 percent above an Australian shop’s marked price.
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Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.