By Li Hongmei
Parallel importers are expected to continue "doing good business" in China, thanks to the lower prices they offer, posting growth of over 30% in 2013, largely owing to Chinese shoppers' love of luxury goods, Chinese-language newspaper Beijing Business Today reported.
The business of parallel imports in China was expected to reach 74.4 billion yuan (US$12.31 billion) in 2013, and over 100 billion yuan in 2014, according to a market report published by the China e-Business Research Center.
China's consumption of luxury goods in 2013 was estimated to be worth US$116 billion, according to global consulting firm Bain & Company, which can be compared with the sales figure reported by luxury brands' stores in mainland China of US$28 billion, up just 3% from a year earlier, showing the crucial role that parallel importers play.
The buoyant business of parallel importers was also a result of the great price disparity between goods sold in China and overseas, as prices abroad could be about a half or a third of those within China, the newspaper said.
Price disparities were a result of the high import tariffs imposed by the Chinese government, according to the newspaper. The import tax on cosmetics, for example - the most popular items Chinese consumers buy through parallel importers - was 50%.
The rise of e-commerce in China has also helped provide a platform for parallel importers to conduct their business more easily, the newspaper added. The business suffered a setback in 2012, however, following a court case, in which a former flight attendant was sentenced to 11 years in prison for smuggling, after not paying any import tax on items she bought overseas as a parallel importer, the newspaper pointed out, although her sentence was subsequently reduced to three years during a recent appeal against the verdict.
Lawyer Tian Feng stated that parallel imports are not illegal, but avoidance of import tax is punishable under law.
Consumers should be careful when choosing vendors in the parallel importing business they deal with, experts said, as the quality of after-sales service varies.
