WeChat Seller Fined 1 million and Sentenced to 4 Years in Prison

On the morning of March 27, a man in Zhoushan, Zhejiang province, was sentenced to four years in prison and fined one million yuan for "daigou".

What the heck is daiou?

Daigou (代购 dàigòu) is a personal shopper who purchases commodities for customers outside mainland China due to the price 30-40% price increase in China.

Here’s the scoop:

Li, from Zhoushan, Zhejiang province, wanted to buy a famous watch for a long time. He learned from a friend that there’s a man, Gao, with a very good reputation for selling this famous brand for very low prices.

With the referral from his friend, Li added Gao on WeChat and after a short conversation, put a down payment on his favorite watch. A few weeks later, Li receive his watch. Very satisfied with the quality and pricing of the watch, Li made several more transactions with Gao.

Photo credit: nipic.com

News quickly spread that Gao was the go-to guy for buying brand name watches for low prices. To facilitate the purchase, Gao established a partnership with Lin, a local in Hong Kong.

The two men agreed that Gao would be responsible for customer relationships and collecting payments via WeChat while Lin would take care of the watch purchases in Hong Kong and delivery. Most often, Lin would arrange for the watches to go to Shenzhen and from there directly send to customers or to Gao.

The pricing exchange rate advantage between domestic and Hong Kong dollar, plus the avoidance of tariffs made their business extremely prosperous. 

However, as with most “good things”, it quickly ended. Lin was seized by Nanjing customs anti-smuggling bureau in 2018 and later in August, Gao was arrested by Zhoushan customs office.

From December 2016 to May 2018, Gao and Lin brought a total of 100 pieces of brand names from Rolex, Cartier, and Vacheron Constantin watches from Hong Kong into mainland China.

Zhoushan customs released information that the total tax price of the 100 brand watches was 5,518,545 RMB and the total tax evaded was 3,449,561 RMB.

On the morning of March 27, the Zhoushan intermediate people's court sentenced Gao to four years in prison and fined him 1 million RMB for smuggling ordinary goods. Gao served his sentence without appeal.

The Daigou industry is still very popular now, however, the strict new e-commerce law has raised the entry threshold for daigou. It requires business licenses and taxes in accordance with the law.

Click to review the new e-commerce laws which took effect on January 1st, 2019: 

Editor: Crystal Huang

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