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Huaqiangbei trades computer chips for lipsticks

By Zhao Yimeng | China Daily | Updated: 2021-02-03 09:41
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High profits

Huang, who owns businesses in the United States and Hong Kong, used to buy electronics in the US to sell in Hong Kong and Shenzhen.

"During the best times-2015 and 2016-my profit ranged from 2 to 3 million yuan a year," he said.

He recalled how traders clutched bags of electronic wares in the bustling malls, customers haggled with vendors over new gadgets and merchants, inventors and entrepreneurs jostled in the hallways to shop for components to make new products.

In 2007 and'08, when the dealers only accepted cash, there were usually five or six people waiting in line at each ATM to withdraw money, sometimes extremely large sums.

In early 2019, Huaqiangbei's flagging smartphone market forced Huang to adapt his business strategy, and the situation remained uncertain last year in the light of demonstrations in Hong Kong and trade frictions between China and the US.

"The electronic products we bought from the US, especially iPhones, were seized by US customs as 'sophisticated instruments' (a focus of US complaints)," Huang said, adding that stricter border controls resulting from the COVID-19 epidemic have blocked supplies.

Despite the problems, Huaqiangbei's merchants are proud of their ability to spot opportunities and their fast reactions to ensure they grab every one.

Huang's wife has been a daigou, or freelance retail consultant, for 10 years. As a former outbound tourism guide, she is familiar with overseas duty-free shops and the market price of cosmetics.

"We decided to take advantage of our professional knowledge of cosmetics products to advance within the sector," Huang said.

The couple bulk-purchase profitable goods from duty-free shops at a wholesale discount and sell them far more cheaply than dealers at shopping malls on the Chinese mainland.

For example, a Lancome lipstick that costs 285 yuan at most cosmetics counters sells for 140 yuan at their stall in Huaqiangbei, irrespective of whether the buyer is an individual or a wholesaler. Several of their competitors can match that price, too.

In response, China's cosmetics' market has dramatically scaled up in recent years. According to figures from the National Bureau of Statistics, cosmetics sales from January to October totaled 256.9 billion yuan, a year-on-year rise of 5.9 percent. Overall, retail sales fell 5.9 percent over the same period.

"As Chinese people pursue high-quality lives, the demand for beauty products is booming," Huang said.

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