China is cracking down on undeclared imports of consumer goods by personal shoppers traveling overseas – otherwise known as “daigou,” meaning “buy on behalf.”
A new law restricting the daigou gray market, which analysts estimate is worth tens of billions of dollars, will go into effect in January, the Financial Times reports. The new rules will hold e-commerce platforms responsible for fraudulent goods sold by vendors on their sites and require all daigou who advertise online to register with the government and pay full import taxes
FT reports that, in recent months, customs have stepped up airport checks, while Chinese courts have jailed merchants for up to 10 years for tax evasion. The goal of the regulation is to allow foreign brands to unseat the bootleg industry with taxable premium imports, though the move could drive customers towards cross-border ecommerce platforms with lower tax rates.