(Source: https://pltfrm.com.cn)
Introduction
The rise of daigou and parallel imports poses a major threat to overseas brands in China, diverting revenue and diluting prestige through unauthorized lower-priced channels. Proactive pricing controls, enhanced experiences, and digital enforcement are vital to reclaim control and protect domestic market share. Learn actionable tactics to combat grey market erosion effectively.
- Controlling Wholesale and Distribution Channels
1.1 Global Supply Oversight Wholesale Caps: Limit volumes to authorized partners worldwide to prevent excess stock entering daigou networks. Regular audits ensure compliance. Selective Partnerships: Prioritize direct-to-consumer models on Tmall and JD to bypass risky intermediaries.
1.2 Traceability Enhancements Digital Authentication: Implement blockchain or NFC tags for easy verification, deterring grey resales. Promote via WeChat for consumer confidence. - Pricing Controls and Anti-Daigou Measures
2.1 Purchase Limits and Monitoring Quantity Restrictions: Enforce per-customer caps in high-risk markets like Korea or Japan. Real-Time Tracking: Use AI to flag suspicious patterns and adjust availability.
2.2 Competitive Mainland Incentives Price Matching Initiatives: Offer occasional alignments or rebates for domestic buys to close gaps. - Elevating Domestic Client Experience
3.1 Exclusive Perks VIP Prioritization: Provide mainland-only services like personalized engraving or events to outweigh grey savings. After-Sales Superiority: Faster repairs and warranties encourage official channels.
3.2 Community Building Platform Engagement: Foster loyalty through Red groups and live interactions, emphasizing authentic experiences. - Digital and Legal Enforcement
4.1 Platform Collaborations Takedown Partnerships: Work with Alibaba and Tencent to remove unauthorized listings swiftly. Consumer Education: Campaigns highlighting risks of fakes in grey channels. - Case Study:
A Swiss Watchmaker’s Grey Market Reversal Facing 25% revenue loss to daigou, a renowned overseas watch brand tightened global wholesale, introduced purchase limits in Asia, and launched mainland-exclusive complications with enhanced VIP programs on Tmall Luxury. Combined with blockchain authentication promoted via Douyin, these steps reduced grey market impact by 50%, lifting domestic sales 30% as consumers shifted to official channels for assured value and service.
Conclusion
Overseas brands can effectively neutralize grey market threats by integrating tight controls, irresistible domestic advantages, and collaborative enforcement, securing long-term profitability in China.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
