The daigou phenomenon: 'Unofficial' exports of Aussie supplements to China estimated at $800m

By Gary Scattergood

- Last updated on GMT

The Australian industry has been buoyed by daigou shoppers for several years. ©Getty Images
The Australian industry has been buoyed by daigou shoppers for several years. ©Getty Images
Daigou shoppers are believed to have accounted for $800m of 'unofficial' supplement exports from Australia to China in the past year, dwarfing the $320m figure for official exports.

The numbers were crunched by Australian trade body Complementary Medicines Australia (CMA) for its 2018 industry audit.

Daigou are 'personal shoppers' who buy products overseas to ship back to China to sell, usually via e-commerce.

The Australian industry has been buoyed by such shoppers for several years, but until now, the scale of the financial benefits had been uncertain

To put it into context, CMA has valued the overall industry value to be worth $4.9bn, up from $4.2bn in 2017; daigou shoppers alone are responsible for around 17% of this value.

CMA will officially launch the audit findings in Shanghai next month, but NutraIngredients-Asia ​has been given a sneak preview.

The findings show that the industry has enjoyed $2bn growth over the past five years.

Vitamins and dietary supplements remain the largest category, accounting for $2.77bn, with sports nutrition now exceeding $1bn, herbal and traditional products responsible for $690m, and weight loss products accounting for $430m.

When it comes to the fastest growing ingredients, probiotics top the list at 10.2%, followed by propolis at 9.6%, calcium at 9.1%, chlorophyll at 7.4% and cranberry at 6.9%.

Furthermore, last year, 71 new ingredients were approved by Aussie regulator the Therapeutic Goods Administration (TGA), and 1587 new finished products were registered.

New health claims

Earlier this year, new rules governing the industry​ in Australia were approved.

The regulations, included in the Medicines and Medical Devices Review (MMDR), contain amendments to provide a new approval pathway for listing complementary medicines with higher therapeutic indications and health claims.

The new health claim classification sits between the current low-risk listed classification for complementary medicines, and the higher level classification for pharmaceuticals.

To qualify to make the new higher level claims, products must be supported by rigorous scientific evidence, and tested by the TGA for efficacy.

Under the new system, companies that invest in innovation and research will also enjoy a two-year period of market exclusivity for newly approved ingredients.

CMA CEO Carl Gibson said: "The goal is to encourage and reward greater investment in research and development by industry, and be an incentive to further expand the clinical research base for complementary medicines, enabling Australian companies to expand business opportunities.

"Achieving an appropriate regulatory regime — one that is supportive of innovation but that doesn't undermine the current high standards for Australian complementary medicines — will assist the complementary medicine industry to bring innovative new products to both the Australian and global markets."

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