Carol Lin is 25. She came to Sydney in July last year as a Chinese international student and is now studying English at an ELS language centre.
She also makes up to $3000 a week selling Blackmores and baby formula to people in China.
The business of selling Australian health products to China isn’t new. For many international students from the mainland, it’s an easy way to earn some extra cash on the side when studying in Australia. Or in this case, a lot of cash.
Lin says that before coming to Australia, she had already researched the market and found that selling Australian health products to China through WeChat was a lucrative business. Many of her Chinese friends here had already set up their own online shop on the messaging platform, sourcing well-known Australian goods such as a2 Platinum Formula and Bellamy’s Organic for friends and family back in their hometown.
The growth of these businesses has been spurred by two things: counterfeit products and fake brands being sold in China and the increasing number of Chinese international students in Australia who have tapped into this demand for high quality health goods.
Not only can these online stores operate as an unregistered business without paying taxes but they also have the potential to reap in an insane amount of money.
In a good week, Lin earns $2000 to $3000 — a far cry from the $23 an hour wage that regular university students in Australia earn.
Maggie Ma, a 26-year-old international student who recent completed her Master of Accounting at the University of Sydney, says she started her WeChat business after bringing back Australian health products to China during a visit to her family. She realised it would turn into a profitable business when her relatives gradually began asking her to bring back more with every visit.
Both Lin and Ma say that given its flexibility and profitability, working as online resellers has been a popular alternative to seeking a part-time job.
And as China’s demand for Australia-made products continues to soar, it seems there’s no shortage of students who are slowly turning themselves into savvy wholesalers and entrepreneurs.
But first, what’s with the obsession behind Australian products?
China is currently Australia’s second largest market for pharmaceuticals such as vitamins and health products with exports amounting to $381 million in 2013-14, according to a report by The University of Sydney.
And as living standards rise and people become more conscious of their health and wellbeing, Chinese consumers have been turning their focus to offshore products. Most notably, Australia’s baby formula and multivitamins.
“China is facing a host of new health challenges, including an ageing population, changing diets, increasing prevalence of obesity and environmental problems,” says professor John Knight, at the George Institute for Global Health.
“The demand for high quality health care is a constant, unlike the boom and bust cycles of many other industries such as the resources sector.”
This comes as no surprise. Over the past years, there have been multiple reports of people in China selling counterfeit products including powder packaged in A2 Platinum Formula and Bellamy’s Organic milk tins.
Lin says there’s a real desire for Chinese consumers to look for products that are of better quality especially with so many fake brands now on the market.
According to estimates by Austrade, between 5 and 10% of retail food, including health products and baby formula, are now sold online on e-commerce platforms such as Taobao and Alibaba.
And while Chinese authorities have tried to clamp down on unregulated imports by levying import taxes in a bid to save local businesses, this hasn’t affected those who are sending products by post.
How it works
The process of setting up shop is extremely easy.
WeChat users can open a store through their personal messaging account without having to create the separate account that Instagram users have to. It makes everything more manageable and can also mean direct marketing to their existing contact list.
For many Chinese people, WeChat is seen as a substitute for Facebook. But instead of having a newsfeed, they have something called “Moments”. This is essentially your timeline where you can post status updates, photos, links or videos.
It’s also where Chinese international students can post “ads” for their products with all the details and pricing.
Here’s a look at some examples.
You can then browse through their timeline or 'Moments'. Swisse and Blackmores products are some of the most sought after products.
These 'ads' always give an overview on what they are -- but prices are rarely disclosed because they can vary between customers.
It doesn’t require too much work. Compare this to a traditional online website where you might need to get a web designer, this is more of a snap and go process.
Interested buyers can then leave a comment inquiring about the product or send a personal message.
What’s made the whole buying process even easier is that WeChat lets you connect your bank account to the social media platform. This means you can easily transfer money to someone by clicking on “Bank” in the options without having to open up your personal banking app.
Lin says that after people have messaged her what they want, she writes it all down and sources the products before shipping it off. Most of her customers are parents of her friends back home.
Best of all, the whole process eliminates the need for marketing — her customer base is completely built via word-of-mouth and the recommendations of her regular customers.
Products and pricing
It’s no secret that the Chinese are big consumers of Australia’s baby milk powder and vitamins.
As Business Insider reported earlier this year, many locals were cashing in on China’s love of Aussie infant formula, specifically a2 Platinum Formula and Bellamy’s Organic. While these can go for more than $80 in China, the retail price here is $25.
Lin says that along with Blackmores and baby formula, multivitamin brand Swisse is hugely popular, selling everything from high strength cranberry pills and vitamin C through to liver detox tablets.
Her first sale on WeChat were Swisse multivitamins, which retailed for $17, in September last year. She sold them for $29.
Lin says that the prices for products vary but that she’ll usually sell Blackmores products for around $10 above the retail price. She says she never advertises the price on her profile because different customers get different prices.
Other things such as the hugely popular pawpaw cream, which retails for $5 in stores, can be sold for up to twice the amount at $10.
Lin explains: “If I buy something here for $30 here, then the delivery fee could be $7 meaning that it adds up to $37. But since I’m the one who’s getting the stock and selling it to China, I can’t sell it for this price. I need to increase the price because people in China don’t know how much I am buying it for. So if I sell it for $47, I can make $10.”
But she doesn’t always make $10 off each sale. Sometimes it could be less, around $5 or $6.
She admits that while baby formula was extremely popular at the start, it’s been getting progressively harder with so many competitors forcing prices to be reduced.
Ma says her customers are also a big fan of manuka honey and pawpaw cream. Her biggest sale to date took place over the Chinese New Year where many friends and family were stocking up on Aussie goods to give as gifts. One sale alone was $2000.
But it’s not as easy as it looks
While it may seem like easy money, Lin says that not everyone can be a successful online retailer.
“It’s a lot [of time]. It’s very troublesome. It’s hard work,” she says.
But the hardest part has been finding new customers. With so many students opting to set up their own store on WeChat, competition has been fierce with people tending to stick with the same seller for a long time.
And although she buys most of her products from Chemist Warehouse, which markets itself as Australia’s cheapest chemist, she says that it can take up a lot of time sourcing everything.
“You WeChat and tell me what you want. Then I have to write it down, for example if a customer buys five things, but all five things aren’t available at the same place,” she says.
“For example, it could be from the supermarket, Chemist Warehouse. I need to go to a lot of differences places to buy everything and then afterwards, I have to send the stock and pack it up.”
She says the minimum purchase requirement for her customers is 1 kilogram otherwise it would be too expensive to ship.
Lin says she has to regularly check her phone to catch up on orders and deliveries. Sometimes, this will mean checking her phone constantly while out at dinner with friends. And if she’s not running around buying the products, she’ll be packing them or sending it off at the post office.
Some days, she’ll work 10 hours starting at 11am and finishing up at 9pm.
And weekends? “We don’t have weekends,” says Lin.
“But we do have a lot of freedom, so if we don’t want to work that day we can just tell them. If I’m really busy one day, then I can just decide to not work.”
Lin considers herself to be “successful” because her business is going well and she makes more than the average reseller. When business is going well, she will usually spend the money shopping and buying designer goods.
“It depends on each person’s preferences,” says Lin who spends most of the money on living expenses.
“Some people will save but some people will go shopping. We both go shopping because our family backgrounds are already quite good.”
Down the track
While owning a WeChat business is a convenient source of passive income for many Chinese international students, it’s not something that many tend to stick with in the long-run.
Lin, who will start college in October, hopes to continue her business for the next few years until she moves back to China to help with her family’s business.
She says that people usually end up looking for a regular full-time job after a while or if they do stick it out, they expand by opening up a physical health goods store.
Of her friends, she says that half of them are pursuing a WeChat business while the other half are working a part-time job.
“That’s because there are some types of people who are not suited to doing business,” Lin says.
“And if people have decided that they will stay and live in Australia for the long-run, a lot of them will try a find a job because it’s stable — doing this [WeChat business] isn’t stable.”
But for now, it seems that both Lin and Ma are happy to continue their online business with no plans to be employed anytime soon.
“If you’re a waiter, you are like a robot. When people tell you to do something, you just do it. But doing this, you need a lot of ideas and approaches,” says Lin.
The interview was conducted in Chinese and translated into English.