Are Grey Market Imports Refurbished?

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I am curious. Why can grey market imports be so much cheaper than local stock, to the point where in some cases one can be saving a substantial amount? Take for example the Canon 7D. One can be bought through grey market for as little as $AU1550, whereas in Australia with local warranty you would be looking at around $2300. That's $700 more! Even taking into account customs/Duties at say 20% the grey import would still come to $1860. Could some products that are sold as grey market be second hand/refurbished goods? Or is it that Australian's pay higher prices for most goods, and that if you walked into a shop in Hong Kong that the prices that local pay are the same as grey market imports for us? Inform me!