Is China Really Cracking Down on 'Luxury Smuggling'?

A daigou seller was recently caught trying to smuggle five Prada bags into China, but can the government crack down on a mass scale? (Shutterstock) Amid all of the news of Chinese shoppers making somewhere in the neighborhood of 70 percent of their luxury purchases abroad, one question often asked is whether China will ever crack down on those bringing luxury goods back into China. Despite occasional claims of enforcement, overseas buyers continue to bring items back largely without worry, with the exception of the rare iPhone smuggler who tries to saunter past guards on the Hong Kong border. Despite this lax enforcement, there are signs that the government is getting somewhat more serious in cracking down on gray-market dealers. This week, a gray-market seller in Ningbo was fined 550,000 yuan (US$88,689) and sentenced to 18 months in prison for smuggling 1.2 million yuan ($193,500) worth of handbags into the city and evading more than 350,000 yuan ($56,470) in taxes over the past two years. According to the SCMP, the man hired around 10 frequent travelers, among them businesspeople and overseas students, as daigou agents. The buyers mailed or carried the handbags back to mainland China without declaring at customs. Authorities caught one of his buyers trying to bring in five Prada bags worth tens of thousands of RMB. Although this particular case in Ningbo received some attention, it’s unlikely that China will be able to go beyond the occasional cursory crackdown to address “luxury smuggling.” There are, quite simply, too many travelers returning from abroad—well over a hundred million per year—to check every bit of luggage for accessories, watches, and handbags. More likely, the country will just increase fines for those caught in the act, and expect less gutsy travelers or daigou agents to cut back on their undeclared entries. For overseas daigou sellers, however, there’s no real incentive to cut back on their sales, regardless of government crackdowns (either real or just in name). As one seller, surnamed Li, told CNN of his reaction to another crackdown last summer, “You can say this is smuggling but you can't prove it. The products were purchased in a legal way.”

Is China Really Cracking Down on 'Luxury Smuggling'?

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Published June 03, 2015

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Is China Really Cracking Down on 'Luxury Smuggling'?