A sense of an ending
Nov 23, 2018 (WiC 433)

While Alibaba celebrated record sales on Single’s Day this year, a lot of daigou were overwhelmed by a sense of their own demise. Literally meaning “buying on behalf of”, daigou is a uniquely Chinese occupation that capitalises on delivering to locals quality foreign goods (and bypassing heavy import duties if the same are purchased in China). It started with amateurish, part-time personal shoppers – mainly expatriate students and housewives looking to make extra income – and gradually blossomed into a minor industry that led to dedicated cross-border e-commerce platforms such as Little Red Book (see WiC413). To cater to daigou Australia Post even opened stores solely tasked with shipping health and beauty products to China.

So what is killing the flourishing trade? Apparently China’s new e-commerce law set to kick in on January 1. It requires facilitators of overseas shopping – be it companies or individuals – to register in both the source and selling countries and pay taxes accordingly. Nor is the new rule just window dressing: the Guangdong provincial government this month sentenced a daigou – who operated a fashion store on Taobao – to 10 years in jail for tax evasion and smuggling. The seemingly draconian law has contributed to the declines in the share prices of luxury brand owners such as LVMH and Kering in recent weeks.

Leaving their mark
Nov 16, 2018 (WiC 432)

Relations between Beijing and Washington have darkened because of the trade war. Yet the sour mood has not affected the business interests of Donald Trump’s daughter Ivanka in China. According to CNN, she has been granted approval for 16 trademarks in her name for consumer goods like shoes and handbags.

Ivanka’s success is a rare one. Foreign brands have typically struggled to protect their intellectual property rights, particularly when it comes to the Chinese versions of their brand names. Former NBA superstar Michael Jordan and sportswear firm New Balance, for example, have both been mired in legal tussles with firms that operate under their Chinese identifiers.

Added to the list recently was Japanese retail chain Muji. Its Chinese name wuyinliangpin, ironically meaning “good products with no trademark”, is one of the best known Japanese brands in China. The problem is that local firm Beijing Miantian registered the wuyinliangpin characters almost 15 years ago, long before Muji opened its first store in the country.

Miantian now sells household goods with a minimalist style similar to Muji and a court ruling in Beijing late last month ruled in favour of the local firm, meaning that Muji can no longer identify itself under the Chinese characters of its Japanese brand name (unless it buys Miantian, of course).

Some of the Chinese media outlets were surprised to see Muji losing out, although there have been plenty of other cases in which international firms have been too slow to protect their trademarks from local applicants. Over in Taipei newspapers took a different view, speculating that Muji did itself no favours this year by listing Taiwan as a country in its company literature…

Ice on the runway
Nov 9, 2018 (WiC 431)

China is building eight new airports annually and according to the World Economic Forum that will take its total to 260 by 2020. However, the trickiest and most unusual airport the country is building is not in China itself. Instead it is situated at the South Pole.

Last week a Chinese expeditionary team took off on its special Antarctic plane the Snow Dragon to begin work on a permanent airport 28km from China’s Zhongshan Station scientific facility. China uses the site in Antarctica for meteorigical research and has said the new airport will make it easier for personnel to get to and from the station. “The new airport allows medium and large transport aircraft, like Boeing planes, to take off and land in the South Pole, shortening transport time as well as enhancing efficiency,” Zhang Xia, director of the Polar Strategy Centre at the Polar Research Institute of China, told the Global Times.

Building a suitable runway in Antarctica is not without its engineering challenges, but the Global Times points out that China is not the first to build an aiport at the South Pole. It says there are more than 50 air fields in the Antarctic continent, 10 of which have runways longer than 3,000 metres. The US owns 13 of them, with Russia ranking second with eight, according to the newspaper.