A black market for mooncakes in China

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    Mooncakes from downtown Shanghai for China's mid-Autumn festival.

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    Haagen Dazs made 1.5 million boxes of mooncakes this year to meet a growing demand for their product.

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    A box of Haagen Dazs mooncakes ranges from 40 USD to 100 USD.

    - Rob Schmitz/Marketplace

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    This is a sign in Chinese posted on the Haagen Dazs redemption tent. It warns people not to eat, touch, etc., the dry ice that accompanies each box of Haagen Dazs mooncakes. It basically instructs people how to properly dispose of dry ice.

    - Rob Schmitz/Marketplace

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    Haagen Dazs mooncakes.

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    Inside the Haagen Dazs redemption center in downtown Shanghai.

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    Haagen Dazs redemption centers in downtown Shanghai. Behind the tents is Jing'an temple, one of China's most famous Buddhist temples.

    - Rob Schmitz/Marketplace


Kai Ryssdal: There's a big festival coming up on the Chinese calendar tomorrow: It's called the mid-Autumn festival. For the past week or so, stores over there have been stocking up on the traditional gift of the season: Mooncakes. They're pastries, small but rich, with a flaky crust and a sweet filling, usually made of lotus paste.

More than a billion people wanting the same thing on the same day? Smells like a business opportunity to me.

Our Shanghai Correspondent Rob Schmitz takes us inside the mooncake economy.

Rob Schmitz: Mooncakes have been likened to pastry hockey pucks. At around a thousand calories, they're almost as dense. This helps explain why the Chinese don't buy mooncakes for themselves. They gift them.

Shaun Rein is a strategy consultant in Shanghai.

Shaun Rein: It's a way of showing respect to business partners and people you want to be close to, and it's also a way to give them outright bribes.

Yes, bribes -- and we're not talking about briefcases full of mooncakes, but their paper representations, mooncake vouchers.

Here's how it works: Buy a voucher from a company that makes mooncakes. Give it to your friend, client, local government official. And they, in theory, redeem the voucher for mooncakes. What most people do, though, is sell the vouchers on the black market for cash.

Rein: There's no embarrassment about saying, "We don't want this mooncake." Let's be pragmatic and get some money out of it.

And when a fifth of the world is in on this, that money becomes an underground economy worth billions.

Dozens of workers pack boxes of mooncakes at a Haagen-Dazs redemption center in Shanghai. Thirteen years ago, the company had an epiphany: They realized the Chinese give mooncakes, but many don't eat them. It's like the Christmas fruitcake dilemma in the West. So they thought: Why not make ice cream mooncakes? The ice cream mooncake was born.

Gary Chu manages the company's China operation.

Gary Chu: It's huge business. It's a very important business for us. It's growing at double digits every year.

Soon after, Starbucks, Nestle and Dairy Queen got into the business. This year, Haagen-Dazs sold 1.5 million boxes. To buy one, you'll need $50 to $100 worth of vouchers. Want an ice cream mooncake this year? Sorry. Vouchers are sold out. Your only option is the black market.

A back-alley vendor named Yin Jing wears a fanny pack full of Haagen-Dazs mooncake vouchers. They're made of thick paper; each one has a laser engraved hologram, just like currency. They float like currency, too. Last week, their price peaked. Now with just days to go before the festival, Mr. Yin is looking to unload.

Yin Jing: After the festival's over, all these vouchers will be expired. So I have no choice. I've got to start dropping the price.

This selling frenzy reaches the highest levels of society. Just blocks away, a vendor who only gives his surname -- Zhang -- just negotiated a deal on reams of vouchers.

Zhang: These are all from government officials. They get so many as gifts, and they feel too embarrassed to sell them to me in person, so they ask their wives to meet me in a coffee shop.

Fresh from his secret government rendezvous, Zhang's got his game face on, trying to sell all these vouchers before time runs out. If he fails? He'll be forced to succumb to the spirit of the season by giving away dozens of boxes of mooncakes and keeping a few for himself, at which point the giving will stop, and the losers of this annual game will be forced to eat.

In Shanghai, I'm Rob Schmitz for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.
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But but ....I LOVE Chinese moon cake ....it's what i live for when i go down town.

While riding our tandem through western Sichuan Province last year, we lucked into mooncakes as a major source of fuel. Now we know why, at 1000 calories a cake, that's what powered us over those 15,000 foot passes. Little did we know we were only supposed to eat one eighth at a time; we ate several a day.

psst... wanna hedge against risk in the Chinese Mooncake market? Well do I have a derivative for you ;-) what, no mooncakes... no problem.

Hmmmm. If non-traditional mooncakes are popular then the next stage in the evolving secondary mooncake market would be vouchers for mooncakes that could also be used to purchase other items from a corporate catalog. It might even be possible to create a system where a company that sells vouchers for mooncakes doesn't actually ever manufacture any mooncakes at all.

I just had a moon cake and I can understand why there is a black market.

Are the voucher counterfeit or otherwise illegally acquired?

I understand the editorial and emotional appeal, but why label this a black market? It's merely a second-hand market.

When you say "like the Christmas fruitcake dilemma in the West" I suspect you mean "like [...] in the US".

Because in the UK fruitcakes are things we cook and eat, if we like them, or have no contact with if we don't.

I am Vietnamese-American and we took celebrate mid-Autumn Festival aka Tet Trung Thu with moon cakes. Although your article was very intriguing to learn how modernizing and capitalistic this moon cake business is, I was somewhat bothered by the emphasis of calories. Yes, depending on the ingredients, the whole moon cake itself is from 800 to 1,000 calories. What you forgot to mention is that NO ONE/RARELY do they eat the whole thing. It's not even customary. Normally, you eat amongst friends and family and the customary way of cutting it is in 1/8(s). Even the serving size on the package is in 1/8(s). It's about 100 calories for 1/8.

Thanks for a very entertaining article - I'm probably one of the few that actually enjoys eating mooncakes! (the traditional variety)

Wow! Good article. I now know how corrupt China is. I don't remember Taiwan was that corrupt back when I lived there twenty years ago. China is really advanced in corruption.


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