Inside the Jeju airport in South Korea, a designated “repackaging area” where many Mainland Chinese rip open their duty free purchases and take off their packaging. Jeju is a 90 minute flight from Shanghai and a key destination for daigou sellers.

The global luxury rush was stopped at the Chinese border on Thursday — or at least it was held up momentarily, giving investors a chance to contemplate how long the sector’s red-hot growth will continue.

Shares of high-end brands fell sharply in Europe and Asia as Chinese officials stepped up efforts to crack down on daigou shoppers during the Golden Week holiday, which runs through Sunday and was seen as a prime time for those intent on bringing home goods from abroad for resale.

China has been trying to encourage consumption at home — where brands are building their own stores or selling online through Alibaba’s Tmall or JD.com — but the spending by travelers remains key, so any crackdown would spook investors. The political climate has also grown more fraught and even though the U.S.-China trade war is separate from the issue of daigou shoppers, markets are on the watch for any sign that China is going to continue to look more inward to develop its consumer market.

Among the stocks getting hit the hardest in Europe were Mulberry Group, down 7.1 percent to 3.29 pounds; Burberry Group, 5.7 percent to 19.13 pounds; Kering, 5.4 percent to 437.80 euros; LVMH Moët Hennessy Louis Vuitton, 4.9 percent to 287.95 euros, and Hermès International, 3.1 percent to 540 euros. In Japan, Shiseido Co.’s stock fell 4.7 percent to 8,375 yen.

In the U.S., where markets fell after a sell-off in government bonds, the decliners included Tapestry Inc., down 3.4 percent to $48.43; PVH Corp., 3.3 percent to $134.15; Tiffany & Co., 2.9 percent to $120.75, and Michael Kors Holdings, 2.2 percent to $66.60.

Equity markets, however, are known for knee-jerk reactions and the impulse to bolster more legitimate markets in China could ultimately help brands, which are trying to look beyond sheer volume to building more direct relationships with Chinese consumers.

Erwan Rambourg, global co-head of consumer and retail research at HSBC, said: “Increased scrutiny is nothing new — it started more than two years ago in May 2016 — and would not be surprising during an important holiday period like the current Golden Week/Mid-Autumn Festival/National Holiday.

“In any case, there is a clear willingness from the Chinese administration to repatriate luxury consumption at home — import duties on luxury goods were lowered in July,” Rambourg said. “Higher scrutiny could decrease daigou activity…which is actually not bad for brands in terms of keeping the relationship with consumers tight.”

Multiple media reports in China described serious losses for gray market sellers. The uptick in enforcement was covered by Xinhua, the state’s official media outlet, giving the action a quasi-official stamp and elevating it to a warning of sorts.

The extra scrutiny came as the country celebrates National Day, China’s key overseas shopping opportunity, where the country has a week off to travel. This year, it arrived just a few days after the Mid-Autumn festival, effectively giving people an extra-long double holiday.

Creating the most noise was a Sept. 28 crackdown that preceded the start of Golden Week on Monday. Over 100 people from one flight at Shanghai’s Pudong Airport Terminal 2 were detained and made to open their bags, said one report.

According to Chinese regulations, products with a value over $5,000 must be declared. But daigou sellers often flout those rules, flying to nearby destinations, such as Jeju Island in South Korea, to buy products, removing the tags and packaging before bringing it into the country undeclared.

Screenshots published by local media appeared to show resellers discussing the situation.

“Lining up to pay the fines,” one message read.

“Not even one product left. It was all skincare and was fined over ten thousand renminbi,” another message showed.

One photo showed a man kneeling in front of uniformed staff.

A reseller commented: “It’s all real humans doing daigou. It’s really not easy, so please value it. This is so pitiful. If it wasn’t to make a living, nobody would risk this.”

Another wrote: “I’ve had enough of daigou, I feel like it’s about to end. I’ve really witnessed it…Customs were counting each face mask and fining 20 renminbi per mask.”

In a recent research, Jefferies analyst Stephanie Wissink noted that about 70 percent of global dollar growth in travel retail sales is tied directly to the Chinese traveler.

“Beauty is the number-one purchased category by outbound Chinese travelers worldwide, as more than 50 percent make beauty purchases while outside of China,” Wissink said.

However, there are signs that the category is slowing — both inside and outside China. Wissink noted that beauty retail spending in China grew at 7.8 percent in July and August, down from growth of 22.7 percent in March.

“This has tracked toward a more moderate rate of growth alongside China traveler data to Pan-Asian countries also slowing,” Wissink said. “Data from Japan, Hong Kong, Macau, and Korea points to China passenger traffic growth moderating quite significantly in recent months. We would have expected a corresponding pick-up in mainland/in market purchasing, but it too has slowed across channels.”

And that can only add to any unease around the Chinese consumption machine.

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