Shanghai customs warns Lady M cake contract buyers to ‘drop it’

Here’s some food for thought: what if someone in Shanghai offered you a tasty fee to buy a slice of cake in Hong Kong and bring it back across the mainland border for them?

Sound like a piece of cake?

Well, it was a relatively easy way to make a fast buck until the Shanghai border authorities stepped in and warned that this particular form of daigou – or contract buying – is strictly off limits.

Daigou is a Mandarin term (pronounced ‘dye-go’ in English) for the common Chinese practice of buying goods abroad “on somebody else’s behalf” and bringing them back into China in return for a fee. Normally, the advantage of the system is that buyers are getting a much lower price – even with the (often significant) daigou charge factored in – for products ranging from infant formula to designer handbags.

However, in this slightly unusual case, price wasn’t the issue.

The problem was the intolerable queues sweet-toothed Shanghai residents were faced with at their new branch of Lady M, the New York-based luxury cake maker. Unwilling to line up for hours at the hugely popular outlet in IFC Mall, but prepared to pay well over the odds for the much sought-after gateaux and pastries, they turned to daigou for help.

So keen were they to get their hands on – or teeth into – the famous patisserie’s produce, they would pay between 65 yuan (US$10) to 80 yuan per slice for the privilege of having their dessert brought over from Hong Kong. That’s roughly the cost of the cake itself.

Even with such a steep premium the daigou cake service was, for many, an attractive alternative to waiting in line for hours. Hong Kong has two Lady M outlets, one in Causeway Bay and one in Tsim Sha Tsui.

The tactic had become popular since Lady Ma opened in Shanghai in early September and became an instant hit, with eager throngs of customers jostling to be served. The shop even had to close on September 5 when the crowds were deemed a potential safety hazard, reopening the following day with more waiting areas available.

Although such claims are almost impossible to verify, there is a widespread belief that people operating the daigou schemes were deliberately increasing the size of the queues by lining up themselves or paying others to do so.

It didn’t take the Shanghai customs authority long to get wise to the scheme.

It used its official WeChat account later in September to warn that anyone bringing in cake from abroad must demonstrate that it is for their own consumption and not for commercial use.

“If you really want to enjoy it (the cake), be it in Hong Kong, Singapore or the United States, enjoy it there directly,” said the WeChat post. “As regards bringing it back, you’d better drop the idea.”

In reality of course, customs officials may find it difficult to tell whether a box of cake is for someone’s own use or part of a moneymaking scheme.

On September 20, the Shanghai Lady M shop changed its takeaway policy in an apparent attempt to deter daigou. Under the new system, those who win a “lottery” through its WeChat account booking system can buy a maximum of six slices of cake at any one time during three designated time slots for takeaway.

It is not the first time daigou have reportedly boosted the queues outside popular pastry or tea shops in Shanghai, seemingly in an attempt to create a sensation around a particular product and make their service seem an attractive option.