Season for the gifts that keep on giving

Take a walk in the streets outside a Beijing residential community and you will very likely run into cigarette and liquor shops decorated with advertisements reading 'high prices offered for branded cigarettes and liquor'.

Late March, right after the conclusion of the annual sessions of the National People's Congress and Chinese People's Political Consultative Conference in Beijing, is one of the best seasons for these shops. The attendees have been practising the much cherished Chinese tradition of 'exchanging reciprocal gifts' to make connections in the capital city during the meetings.

Shops or individuals buy gifts the recipients don't want or would prefer converted into cash, and then sell them at higher prices. These gifts are usually top-class cigarettes, liquor, tonics, jewellery, shopping cards, and other luxury items.

Luxury shops in Beijing, such as Hermes and Prada, see business soar every March, and a big part of the demand comes from NPC and CPPCC deputies, the Henan Business Daily reported.

Wealthy consumers complained the shops were running low on stocks of certain items, all of which cost at least 10,000 yuan (HK$12,200), the report said.

Many such items are resold to shops or individuals. In a cigarette shop on North Guorui Road in Beijing, the owner was offering 550 yuan for a carton of soft-pack Chunghwa, which sells for about 700 yuan at licensed retailers.

Besides branded cigarettes and liquor, the shop also buys gifts such as shopping cards and petrol service cards, said Pan Jinpeng, the owner.

Asked how lucrative this business was, he said: 'I certainly won't tell you how much money I can make from this, but this is the best season of the year.'

Advertisements for the purchase of unused high-end gifts are easily found on classified information websites such as ganji.com and 58.com. They mostly offer round-the-clock pick-up services and promise to keep the sellers' information confidential, as many of the gifts are believed to be bribes.

'Our company keeps promises. We sincerely offer hospitable services to customers and strictly keep your information secret,' one read.

The Lunar New Year is another peak season for the industry. Li Qiming, a white collar worker in Beijing, was among those owning useless but valuable gifts who sought to sell them for cash. He said his father got a carton of top-class Yuxi cigarettes from a rich relative during the Spring Festival, and they decided to sell them rather than smoke them.

'It's meaningless to smoke such expensive cigarettes for people neither rich nor powerful, like my family,' he said.

'Usually, people will only sell gifts if they have more than they need. For a regular family, it's rare for it to receive too many gifts. Such things only happen to the powerful or those who work in special occupations, like officials and doctors.'

'The tradition of paying New Year visits and sending gifts has given birth to the gift-recycling market. After the long holiday, wealthy and influential families will send the luxurious gifts they received to recycling shops for sale,' said Professor Qi Yudong, principal of the college of business administration of the Capital University of Economics and Business.

He joked that these families were only temporarily holding the gifts, with the recycling shops the actual destination.

It's been an open secret that many of these gifts are related to corruption. Gong Yi, former director of the Land Resources Bureau of Yiwu city in Zhejiang province, was dubbed 'cigarette coupon director' after he was charged with taking nearly a million yuan in bribes, including thousands of yuan in cigarette coupons.

He told procurators that he did not smoke, but some people would give him coupons for a hundred cartons of cigarettes as gifts.

These coupons can be cashed in at cigarettes shops. They are small in size and more convenient to accept than cash.

Zhu Lijun, who works at a central government department in Beijing, said there had been a surge in the number of posts seeking buyers of various cards on his employer's internal forum.

'Around the Lunar New Year, 40 per cent of the posts in the 'useful information' section were trying to transfer all kinds of cards, such as bread coupons, petrol-service coupons, and supermarket shopping cards. There are also different kinds of liquor and make-up,' he said.

He refused to name his employer due to the sensitivity of the issue.

There are no authoritative statistics about how much money mainland consumers spend on gifts every year because the market covers too many industries, and is - most of the time - operating in a covert way.

The China Economic Weekly cited the China Gift Industry Institute as saying that based on data from the National Bureau of Statistics, the Ministry of Commerce, and industry analyses, the gift market was worth some 770 billion yuan a year, with 35 per cent of the money spent by organisations and the rest by individuals.

According to commercial regulations, it's illegal for retailers or businesses to buy unused products from individuals for resale. The only things that can legally be resold or recycled are old cars, metal products, paper, edible oil, waste daily necessities and waste industrial material.

But without little intervention by the authorities, the industry is thriving.

In the square outside the Hualian Commercial Building in Beijing's Anzhenmen area, a man who buys shopping cards for department stores and supermarkets offered a price of 85 per cent of these cards' original value.

He said he and his 'companions' would classify the cards and then sell them to those in need. 'For example, I purchased a card worth 1,000 yuan at 850 yuan. I make 50 yuan by selling it at 900 yuan,' he said.