Alibaba expects international and domestic cosmetics brands to open 1,000 stores this year on its Tmall platform to meet demand from Chinese consumers.

Seven international cosmetics companies, Tom Ford, Glamglow, P&G’s new beauty line Oriental Therapy, Cosme and d-program from Japan, Primera from Korea and Barnängen from Sweden, have signed agreements to launch flagship stores on Tmall this year at Tmall’s annual beauty summit.

Related: Tmall and JD had a combined market share of over 85% in China’s B2C e-commerce market in Q4 2018

Another five beauty companies signed New Retail partnerships with Tmall during the summit, including Maybelline, Kiehl’s, Innisfree from Korea and domestic brand WINONA. It gives them a complete view of their customer base by integrating insights from digitized offline promotion activities and storefront information with online information.

Catering to the needs of shoppers who want to enjoy a variety of Korean beauty products, the Korean Small & Medium Business Corp. (SBC) announced at the Tmall Beauty Summit that it plans to launch a flagship store to house 50 niche Korean brands.

The store openings and Tmall’s target to open 1,000 new cosmetics stores with brands are part of its drive to cement itself as the platform of choice for beauty brands to connect with Chinese shoppers.

With Alibaba’s extensive reach of nearly 700 million customers in China, its strong technical support and in-depth market knowledge, Tmall has become the most-effective platform for brands to manage the entire customer journey from product discovery, awareness building, engagement, transaction and delivery, to after-sales services, and offers consumers a seamless experience, both online and offline. Tmall physical goods GMV grew 29% year-over-year in Q4 2018.

We are honored to be trusted by 180,000 brands on our platform, empowering them to accelerate their digital transformation and grow their business in China. As China continues its consumption upgrade, more and more people from different age groups and geographic locations are willing to spend on high-quality beauty products. We are looking forward to working with more brands to address the opportunity

said Jet Jing, President of Tmall.

Tmall’s sales of beauty products jumped over 60% last year, surpassing the industry’s average growth rate. Online sales of cosmetics and personal care products grew 37% and 36% in China in 2018, respectively, which was also ahead of the whole fast-moving consumer goods sector average of 32%, according to a report jointly released by Tmall and retail market research firm Kantar during the summit.

The report also highlighted untapped potential in Generation Z. Aged between 15 to 19 years old, Generation Z female consumers are newcomers to the beauty market and are willing to spend more on high-end lipsticks than women in other age groups, representing an opportunity for cosmetics companies.

Tmall offers beauty brands an unparalleled edge in the launch of new products, including consumer insights based on data analytics, using live streaming to enhance shopping experiences and exclusive online offers, as well as leveraging offline and online integrated channels to provide customers with personalized shopping experiences.

In 2018, some 80% of Tmall brands chose the marketplace to launch new products, proof of the platform’s ability to identify new markets and demand. For example, two new emerging domestic beauty brands – Perfect Diary and Home Facial Pro – were among more than 30 beauty and personal care brands whose sales topped RMB100 million at the 2018 11.11 Global Shopping Festival, due largely to Tmall’s robust offerings. Check out Double 11 statistics of top retailers & top 50 Tmall stores in 2018 here.

Also at the summit, Tmall showcased a one-stop solution, the Alibaba Business Operating System, as part of a new effort to help beauty brands succeed in China. The Alibaba Business Operating System, officially unveiled by the group in January, is a one-stop solution that helps brands digitally transform themselves in sales, logistics and supply chain management, payment, marketing, cloud computing, and other supporting services.

Alibaba’s Tmall also announced plans earlier this year to incubate 100 new products for 10 billion yuan GMV in 2019.

71 brands exceeded 100 million yuan (US$14.37 million) in GMV in the pre-sale period of Double 11. Among that, 15 brands came from Tmall apparel, i.e. Nike, Adidas, Puma, Lining, Converse, Anta, Fila, Skechers, New Balance, Underarmour, Uniqlo, Eifini, Only, Vero Moda, and Bosideng. The same figure was only 40 in last year’s Double 11. 

14 brands were from consumer electronics, namely, Apple, Huawei, Xiaomi, Vivo, Honor, Haier, Midea, Siemens, Gree, Aux, Hisense, Fotile, Dyson, and Ecovcs.

The story of a Taobao celebrity who sold 300 million yuan products on Double 11

Three brands are from autos, namely, SAIC Volkswagen, Buike, and Lincoln.

17 brands came from makeups, personal care, and maternal & child, namely, Lancome, Estée Lauder, Olay, SK-II, L’Oreal, Pechoin, HomeFacialPro, Innisfree, Elizabeth Arden, Shiseido,  La Mer, Ya-Man, Whoo, Ssulwhasoo, MAC, P&G, and Purcotton.

20 brands were from home decoration, for instance, Linshimuye, KUKA, QUANU, CHEERS, Nabel, Sophia, tata, Shangpin Home Collection, and OPPEIN.

YA-MAN and MOONY were the only two brands in Tmall Global saw GMV hit 100 million yuan in pre-sale.

Consumer electronics: Apple, Huawei, and Haier all in the “100 million yuan club” On November 1st, total pre-sale GMV of Tmall consumer electronics increased by roughly 6 times year-on-year, which remained to be the top platform for smartphone and home appliances.

To be specific, GMV increased by 15 times for smartphones, 10 times for digital 3C, and 4 times for large home appliances.

Notably, Xiaomi’s flagship smartphone MIX3 was sold out at the moment the sale started, Honor’s Magic2 was sold out in the first 5 minutes, and nearly 10 thousand vivoZ3 sold out in 10 minutes.

16 thousand pieces of Haier 10KG tumbling-box washing machine sold out in two days. 20 thousand Dyson supersonic hairdryer and over 50 thousand vacuum cleaner were pre-sold accumulatively.

Apple, Huawei, Haier, Xiaomi, Midea, Siemens, GREE, Dyson, and ECOVACS had already marched to the “100 million yuan club” as of November 2nd. Among them, sales of hot items like iPhone X, iPhone XS Max, Huawei Mate 20 Pro, Apple iPad 128G, and Apple iPad 32G all exceeded 100 million yuan.

How the biggest shopping festival affects China e-commerce apps users growth, engagement, and loyalty

Top pre-sale brands as of November 2nd

Top smartphone brands were Apple, Xiaomi, Vivo, Huawei, honor, Oppo, Meizu, Samsung, Nokia, and Meitu.

Top home appliances brands were Midea, Supor, Joyoung, Ecovacs, Philips, Roborock, A. O. Smith, Flyco, Bear, and Haier.

Among them, hot items were Xiaomi Mijia Vacuum Robot Cleaner, Roborock S51 Smart Robot Vacuum Cleaner, Roborock S50 Smart Vacuum Robot Cleaner, Midea WH2202S induction cooker, A. O. Smith NL1200D Water Purifier, ECOVACS Cleaning Robots, Midea Simple301 electric cooker, ECOVACS Deebot  DT85G Robot Vacuum Cleaner, Midea Simple 101 electric pressure cooker, and OGAWA OG7508S massage sofa.

Tmall Double 11 has become the best timing for launching new consumer electronics products. iPhone XR, Huawei Mate 20 series, Xiaomi MIX3, honor Magic, Dyson Airwrap, and Beats Solo3 Mitch Limited Edition were all in a hurry to catch up with Tmall Double 11.

Apparel: sales of down jacket increased by 90%

It seems that consumers wanted to take advantage of Double 11 to buy everything they might need for a year round.

Over 60 thousand Newbalance565 and 50 thousand MiiOW long underwear suits for couples were pre-sold. Though the snow season had yet to come, 80 thousand snow boots were pre-sold. The sales of down jacket increased by 90%.

The youngest who is in pursuit of street fashion showed extraordinary consumption power. The sales of Edison Chen founded Clot grew by around 60% year-on-year; sales of celebrities Jerry Lee and Wilber Pan co-founded NPC increased by 55% year-on-year; sales of Aape that was under the brand of HK I.T group rose by 45% year-on-year.

Luxury or affordable luxury products were hot. Sales of fur were almost doubled compared with last year’s.  Limited-edition scarves by Burberry were sold out on the first day of pre-sale.

Cosmetics and toiletries: 50 thousand Philips electric toothbrush sold out

Pre-sale GMV of Lancome, olay, Estée Lauder, SK-II, L’Oréal, Sulwhasoo, Elizabeth Arden, and Procter & Gamble were all hit 100 million yuan.

Beauty apparatus generated double sales compared with the previous year. An eyeshadow that was co-branded by domestic brand Perfect Diary and the British Museum sold out at a fast speed of one in every 11.5 seconds. 100 thousand HomeFacialPro’s Hyaluronic Acid Stock Solution – last year’s most trending brand- were sold out.

140 thousand OLAY White Radiance Light Perfecting Essence 50ml sold out in just 4 days of the pre-sale period. Around 20 thousand Givenchy Le Rouge were sold in less than five days. MAC sold over 500 thousand lipsticks in the pre-sale period.

Philips sold 50 thousand electric toothbrushes in the first one minute. Crest sold 6 thousand and 80 thousand 3D White toothpaste in the first one minute and ten days, respectively. Lancome sold 10 thousand Tonique Confort in every minute.

Food & Beverage: sales of 1919 increased by ten times

Pre-sales of KFC increased by 70.4% year-on-year, 5 thousand KFC and Tmall co-branded card were sold out at the moment it launched.  1 million KFC Original Recipe were sold. Three Squirrels new product Trembling Noodle were sold 10 thousand buckets.

1919.cn, an online wine, and spirits shop that has recently received 2 billion yuan investment from Alibaba saw sales of its Tmall flagship store grew by 1,000% year-on-year.

Roughly 80 thousand cars were booked

Autos saw record sales in the pre-sale period. 90 Land Rover at a fixed price of 265.9 thousand yuan was sold out. Buick sold 7,000 cars in a week, over 1,000 consumers in rural areas placed orders through rural Taobao partners. Over 600 high-end Lincoln was booked in 5 days with 300 thousand new customers following its Tmall flagship store.

Users booked a total of 80 thousand cars on Tmall, equal to the entire years’ sales of 30 4S shops.

Alibaba Health: medical beauty services increased by 533% as of October 30th

Online celebrities played a role in the big sales of traditional tonic. The Internet celebrity Li Ziqi’s shop sold 13 thousand jars of Changbaishan honey. For the dietary supplement, BY-HEALTH sold 22 thousand cans of collagen powder, which was bundled with celebrity Cai Xukun-tailored gift.

Inspired by Chinese famous chili sauce Lao Gan Ma’  hoodies that were sold at the New York Fashion Show, several mind-blowing cooperation had sprung up in health care. For example, Durex and Cat’s Kitchen sold 8,000 items of their co-branded popping candy and ultra-thin condom gift box. TongDaoDaShu, a prominent social media influencer, and Omron sold 9 thousand pieces of their co-branded low-frequency massage device.

Fliggy: five-star hotels and business class tickets were the most popular

High-end hotels like Marriott, Hilton, Hyatt, and InterContinental sold 35o thousand night rooms. Airlines also sold 7.5 thousand business class tickets through Fliggy.

Over 200 thousand consumers paid attention to travel products about Hong Kong. Sales of Lao’s hot tourist route was increased by 4 times year-on-year. 16 thousand visas of top destinations Japan, Philippines, and Thailands were booked.

Marriott launched several hundred Double 11-tailored products. Its limited edition pass card for celebrating the coming new year was sold out in two days.

Several online travel agencies united with Tmall Double 11 to release more membership profits like shared membership system and exclusive discounts. For example, Singapore Airlines had shared its membership system with Fliggy on October 28th; the stock was running out in just half an hour after it opened the registration system.

With 180 thousand brands participating this year, which was only 27 brands in the first year of 2009, Tmall Double 11 had become the commercial Olympic for global brands, to a certain extent.

Find out Tmall Double 11 highlights or Double 11 statistics of top retailers & top 50 Tmall stores in 2018

The Chinese government announced on May 30 that it will significantly lower import tariff on many consumer goods. Among them, the average tariff rate for detergents, cosmetics such as skin care and hair care products, and some medicine and health products will be cut from 8.4% to 2.9%.

How will this affect brands’ fate in China?

This is apparently a good news for imported cosmetics products. According to Kantar Worldpanel data in recent years, imported cosmetics products have been enjoying very healthy growth: in 2017, the sales value growth of imported cosmetics products, mostly premium ones, reached 40%. Thanks to the new tariff cut, we expect this trend will continue and this sector will be able to maintain a growth between 30% – 40% in the next couple of years. Some typical brands are Lancôme, Estee Lauder, SK II, Dior, Saint Laurent and Shiseido.

From the origin country perspective, whether the actual products are produced in or outside of China, brand owners have to remember that many Chinese consumers have very consolidated opinion about cosmetics from this country. For example, Japanese products increased their sales in 2017 because Chinese consumers believe Japanese goods are meeting their need for health and professionalism. Japanese cosmetics are widely acknowledged for addictive-free features and outstanding functions.

The growth of European and US brands came against the backdrop that increasingly sophisticated Chinese consumers are entering into previously niche categories, such as essence and eye-cream. European and US brands have accumulated many signature formulae in these categories and have won the votes of many Chinese consumers.

Their usage of social key-opinion leaders (KOLs) has also contributed to their stellar performance because color cosmetics categories are high-involvement sectors and consumers are willing to spend a lot of time to learn from KOLs. South Korean brands went through a challenging period of time in China, but they weathered it by developing lower-tier and online channels as well as launching “fast beauty” hit products.

The macro trend of China’s cosmetics market is favorable to imported products. The rebound of China’s FMCG market was supported by premiumization. Personal care sector outperforms other categories with skin care and makeup products the biggest opportunity to grow.

If we look into the details, Kantar Worldpanel’s Beauty Panel has shown that young females in their 20’s are the market leader and growth driver. They are exposed to and become fans of cosmetics products on mobile APPs, creating numerous instant purchasing occasions. They’ve also formed a habit of making small but frequent purchases, which is a stark contrast with shopping patterns of 40 and above female buyers, who prefer to hoard up products in much fewer purchases to drive down per unit cost.

The rise of vertical e-commerce sites and mobile apps has also created rooms for lesser-known foreign brands to establish themselves. Thai brands, for example, became a surprise leader in sales growth because the humid and hot weather has fostered long-wearing products with outstanding oil-control functions. These are also pain points for many young Chinese consumers.

Geographically speaking, lower-tier cities experienced a big boom of consumer spending. A, B, C and D-tier cities have all posted per person spending growth rates more than doubled that of Key cities (Beijing, Shanghai, Guangzhou).

If a brand wants to make a decision on which products to bring to China first, we can share three latest trends of Chinese consumers’ pursuits for beauty products:

1. Healthier skins

Chinese consumers’ pursuit of healthy skin condition has blurred the definition of traditional functions. For example, new “anti-age” means repairing skin barrier; new “oil control” means improving water-oil balance; new “whitening” means healthy glowing skin.

2. More professional products

As Chinese consumers increase their knowledge about skin care and makeup, they are choosing more professional products more proactively. Kantar Worldpanel Beauty Panel data has shown that the once popular easy-to-use BB cream and CC cream kept losing in penetration rates, while more professional products, such as cushion and foundation have been bought by more consumers. They have also added more pre-steps to create a flawless look.

3. More personality

More Chinese women are now showing off their personality by using fragrant products and bold makeup colors. Brighter and bolder lip colors and eyeshadows have jumped in occasion index.

*Index calculation: occasion share of the period/of 14 fall/winter *100

To summarize, lower tariff definitely will make imported cosmetics more competitive in prices. But the more fundamental factor to decide a brand’s performance in China is their access to reliable market data and their understanding of real Chinese consumer needs. Data-based consumer insight is the ultimate short-cut to win in China.

How to use live streaming for successful marketing in China in 2018

This article was originally published on Kantar.com.

Amazon announced the results of China’s first Prime Day recently. Total number of orders on July 11 exceeded those on last year’s “black Friday.” Amazon China and Amazon overseas purchases and sales grew by almost 300% over last year, and the number of newly registered Prime users grew 60% over last year’s “Black Friday.”

Books, cosmetics, nursery, and toys were the most popular products during Prime Day. The Kindle Paperwhite e-book reader became Amazon China’s best-selling electronic device.

1. Sales amount: Sales during 2017 Prime Day grew 60% over that of 2016. The number of new Prime users globally reached a record, and the number of members participating in the 2017 Prime Day grew 50% over that of 2016.

2. Member discounts: Top sellers included Fisher Price sea horse dolls, Perrier natural spring soda water, Merries diapers, PHILIPS DiamondClean toothbrush heads, Human History and The History of the Future sets, and WMF pressure cookers.

3. Best-sellers: American Comotomo milk bottles, British New Era baseball caps, and Japanese Barrier Repair masks, all from overseas, were best sellers.

4. Fastest goods sold out: Among the many Prime member discounts, the fastest selling-out discounted products included Asics sports bras, Speedo swimming caps, BabyBjörn baby slings, and Penfolds Bin28 red wine.

5. Logistics: During the Prime Day peak, Amazon ensured that cross-border orders in 82 Chinese cities arrived in an average of 5 to 9 working days. The first batch of parcels for cross-border orders placed after 5 PM on June 10 had already arrived at the Amazon distribution site as of the early morning hours of the 14th, and were in the hands of customers that day.

6. Comparison with other shopping holidays: 2017 Amazon Prime Day surpassed “black Friday” and “Internet Monday” to become the highest grossing shopping holiday in Amazon’s history.

Highlights of Chinese sales

1. Wandeshi Technology: On Prime Day, DOSS brand sales reached 30 times those in a normal day in America. DOSS Touch Bluetooth speakers, which participated in a countdown promotion, sold out in an hour.

2. Liwei Electronics: During the 2017 Prime Day, Bluedio sales reached 100 times their volume for a normal day in America.

3. Ecovacs: Launched in August of last year, the Ecovacs online store participated in their first Prime Day promotion, reaching 80 times their sales in America on a normal day.

4. Kalamera Electronics: In the first three hours of Prime Day, sales of Kalamera wine cupboards reached 80% of last year’s sales for the whole day.

Vice President of Amazon Global and President of Amazon China Zhang Wenyi said, “Today is our first time to bring Amazon Prime Day to China, allowing Chinese Prime members to take part in an exclusive 46-hour ‘day-long’ shopping spree. The future will continue to bring more value-added services to Prime members.”

Recently, French beauty product retailer L’Occitane is opening the first Café in mainland China (Nanjing). As the brand competition becomes more and more fierce, skincare brands have to develop various by-businesses to attract and maintain more customers.

The L’Occitane Café in B1 floor of Nanjing Deji Plaza is still under decoration. The decoration enclosure plate has continued L’Occitane’s Provence style: share slow and leisure lifestyle in southern France.

The B1 floor of Nanjing Deji Plaza in Xinjiekou Metro Station has high passenger flow volume. Every passenger going by the L’Occitane Café is curious about this new shop. Not far away from the Café, you will find the L’Occitane store. The Café will open in early July. Among nearly 200 direct sales chain stores in Mainland China, the store in Deji Plaza has relatively high sales volume.

With many passengers coming and going here, Deji Plaza is committed to becoming a collection and distribution center of high-end cosmetics. The stores gathering here hardly need to worry about their sales volume. Maybe this helps us understand why Nanjing Deji Plaza is chosen as the site for the first L’Occitane Café in Mainland China.

Before this, L’Occitane Café has opened five stores in Tokyo, Macao, Taipei and Moscow. New types of Café and SPA services in luxury hotels have become highlights in many companies’ financial report. Both of them are designed for attracting customers to spend more time there. The financial report of the first quarter in 2017 shows that Chinese market has become the biggest growth engine for L’Occitane, accounting for 64.6% of contribution to the company’s sales growth.

In spite of stable sales volume, the brands in Deji Plaza still struggle to tell better stories in limited space with limited attention resource. In such situation, a Café where customers can spend more time seems a nice idea.

In fact, it is not surprising for cosmetic brands to open a Café. Innisfree flagship store on Nanjing East Road in Shanghai has also opened a DIY coffee shop where customers can not only enjoy coffee and desserts but also participated in some interactive activities such as skincare classes and DIY skincare products. Earlier on, some lady-oriented niche brands boasting their natural products with plant extracts also open coffee areas for customers to take a rest or have more interactive activities.

It has become a trend for natural skincare brands to open petty bourgeoisie coffee shops. Moreover, Chanel also opened a pop-up café before. Instead of selling coffee, these brands actually expect to create more opportunities to interact with their customers. Choosing and buying can be done in a flash, but the real driving force behind them has a lot to dig.

Yet, opening a café is not always the best choice for skincare brands. After all, not every brand is so rich like L’Occitane to open a café in Deji Plaza where the rent is extremely high. How to tell an appealing story? It is a question that all sorts of brands in Deji Plaza have to face every day.

A traditional trick is to invite a superstar. A cheaper and more common way is to invite a famous creative director such as Mr. Kevin to share his knowledge and experience on some popular and frequently asked questions like “are you removing your makeups correctly?” or “what are the basic steps for moisture retention before putting on makeups?” and so on. Now some brands also arrange for a live streaming hosted by an online beauty makeup celebrity at the same time.

The most economic and innovative way is to set up an interactive brand terminal machine. L’Occitane has set up a gift machine on which you can get a sample product by scanning the registration QR to become an L’Occitane member.

Under the background of real economic downturn, the cosmetics industry is one of the few varieties to keep a growth in sales. With the relatively lower unit price and high repurchase rate, cosmetic products prove giant market potential.

Source: 36Kr

Cross-border online shopping of South Korea products saw fast growth in 2016 with Chinese consumers the fastest.

Consumers in Greater China areas bought 584.2 billion won (US$5 billion) worth of products from South Korea via online shopping in 2016 with an increase of 74.8% compared to 2015 according to KOSTAT. Overall, foreign online shoppers bought 721.9 billion won (US$6.22 billion) products from South Korea.

South Korea cosmetics is the most attractive product category for foreign buyers. In the fourth quarter of 2016, foreign consumers spent 54.7 billion won (US$ 465 million) in the purchase of Korean cosmetics, accounting for 74.9% of South Korea’s cross-border online shopping sales.

The second most popular product category is fashion and accessories, contributing 10.8 billion won (US$86 million) to the South Korean economy.

South Korea’s total sales of retail e-commerce (excluding travel) will reach US$52.61 billion in 2017 according to eMarketer.

Also read: China cross-border e-commerce insights 2016/2017

In the past 12 months, the makeup industry search queries increased by 93% y-o-y; as of March 2016, the searches on mobile devices reached 86%.

Over 70% Chinese consumers search non-brand keyword on the internet; of the non-brand searches, 58% consumers search for non-product such as solutions and how-tos. Other highlights of the research:

• Nail and eyebrow become popular while consumers are looking for the makeup skills
• Many consumers cannot figure out the difference of BB, foundation, primer and cushion products
• Consumers are pursuing convenience so that products become more and more diversified
• ‘Look’ becomes more important
• Drama and celebrities lead the new fashion

Over 50% consumers search for methods and techniques of makeup no matter using desktop or mobile devices.

The top searching keywords are about make-up steps both on mobile and on the desktop.

41% Chinese consumers search for facial products, followed by eye products (26%) and lip products (16%).

For facial products, BB cream is most popular in consumers’ searching; cushion  foundation enjoys the highest searching growth rate.

85% Chinese consumers search for lipsticks.

Also read: Chinese women bought US$31.39 billion cosmetics in 2015

Retail sales in China’s skincare and cosmetics products market will grow at an average annual rate of 12.8% from 2016 to 2019, much higher than the global average of 6.0%, and will top RMB 287 billion (USD 44 billion) in 2019 according to Euromonitor International.

The proportion of young women who have the habit of making up (88%) is higher than that of mature women (83%) according to an HKTDC survey. 27% of the respondents said they would “make up every day”, the majority (59%) said they “only make up when the occasion requires” and 14% said they “do not wear any makeup”. And, the higher the monthly household income of respondents, the more likely they are to wear makeup every day according to the same survey.

Participants in the focus group discussions contended that usually three basic items are needed for putting on “light makeup”, while over 10 cosmetics products are required for putting on “full makeup”. Meanwhile, the types of cosmetics used also change according to different seasons and fashion trends.

Respondents said they use on average 4.7 different cosmetic products on average, with the most frequently used items being BB/CC cream (57%), makeup remover (46%), sunscreen/sunblock (44%), lipstick (37%) and foundation (34%). The proportion of young respondents using products such as BB/CC cream, makeup remover and sunscreen/sunblock is considerably higher than that of the more mature respondents.

The main reason for Chinese women wearing makeup is “to make oneself look prettier and boost confidence” according to the HKTDC survey. The higher the monthly household income, the higher the proportion of respondents who believe that putting on makeup can “express one’s personal image and taste” as well as “show respect for others”.

When it comes to buying and using cosmetics products, 52% of the respondents would stick to several specific brands. Among the young respondents, 34% said they would buy and try different brands of cosmetics, while the more mature respondents (28%) are less eager to try new brands.

Overall, respondents’ cosmetics brand loyalty is quite high. In light of this, when a new brand enters the mainland market, it has to offer innovative products or novel makeup themes before it can attract the attention of consumers.

The price of imported cosmetics brands is higher than that of mainland brands. Hence, the purchasing power of a consumer affects her product choice to a certain extent.

Also read: 88% China Tier-2 Consumers Buy Overseas Online in 2015

Tmall Global was officially launched on Feb 19 2014 by Alibaba which is designed for supplying imported goods for domestic consumers.

Tmall Global, now a leading retail cross-border e-commerce platform, has 12 national pavilions including Korea, the United States, Britain, France, Spain, Switzerland, Australia, New Zealand, Singapore, Thailand, Malaysia, and Turkey as of June 24 2015. Jingdong, or JD.com, launched a competing platform JD Worldwide last year.

Annual active buyers on Taobao (including Tmall.com) increased to 407 million with an increase of 21 million from the preceding quarter in Q4 2015 according to Alibaba. Consumers of Taobao and Tmall Global on baby foods have a high overlap ratio in terms of age group according to Tmall.

The number of Tmall Global consumers between 23 to 35 years old is more than the same age group of Taobao consumers on mother-care products which indicates that Tmall Global users have relatively high consumption concept and stronger consumption ability.

The number of Tmall Global users between 23 to 50 years old are 4.3% higher than Taobao 23 to 50-year-old consumers on cosmetics and perfume. Taobao users aged from 19 to 22 years old are more than Tmall Global same age group users.

Users from 23 to 50 years old are driving force of Taobao and Tmall Global. Personal-care products users from 29 to 50 years old on Tmall Global are obviously more than that of Taobao users.

Taobao tends to have more young clothes buyers which are aged from 19 to 28 years old. Users from 29 to 50 years old accounted for the majority of Tmall Global.

Shoes buyers from 19 to 28 years old make up nearly half of Taobao users and buyers from 36 to 50 years old make up 30%. Shoes buyers from 23 to 35-year-old make up 61% of Tmall Global users.

Similar with clothes and shoes buyers, Taobao bag buyers tend to be younger in age and Tmall Global buyers tend to take users from 29 to 50 years old as a major force.

Also read: China Cross-border Online Shopper Insights 2015

Total retail sales of cosmetics reached 204.9 billion yuan (US$31.39 billion) with an increase of 8.8% in 2015. This was the first time that the total annual retail sales of cosmetics topped 200 billion yuan (US$30.64 billion) in China.

China’s total retail sales of cosmetics were 182.5 billion yuan (US$27.96 billion) with an annual increase of 10.0% in 2014. The retail sales of cosmetics were 20.4 billion yuan (US$3.13 billion) with an increase of only 5.9% YoY in December 2015, much lower than overall consumer goods growth of 11.1% according to the National Bureau of Statistics.

The growth rate of total retails of cosmetics was slower than the growth rate of the total retail sales of consumer goods in 2015. The total retail sales of consumer goods were 30,093.1 billion yuan (US$4,609.92 billion) with an annual increase of 10.7% in 2015 according to the National Bureau of Statistics.

Total retail sales of China’s daily necessities reached 484.2 billion yuan (US$74.17 billion) with an increase of 12.3% in 2015.

Also read: China Retail V.S. Online Shopping 2015

Female consumers aged between 30 and 39 years old in metropolis cities such as Beijing and Shanghai are the driving force of China’s cross-border online shopping market this year according to a survey conducted by the Voice of China.

Consumers aged from 30 to 39 years old account for 50.7% of the total number of buyers and the group of female buyers account for 82.6% in metropolis cities like Beijing and Shanghai.

35% of China’s online shopping consumers bought cross-border products online in 2015; and, 73% considered the price as the main reason for cross-border shopping according to PayPal and Ipsos.

Retail sales via mobile devices in China are expected to increase by 85.1% annually to reach US$333.99 billion in 2015 according to eMarketer. Cross-border online shopping market on mobile end has exceeded PC this year. Peak shopping period is from 5pm to 6pm and 10pm to 11pm. Most shoppers purchase once or twice each month and spend between 500 yuan (US$78.23) and 1,000 yuan (US$156.46).

Pursuant to lower price, varieties of products, near in location and influenced by media and marketing, Chinese cross-border online shoppers are likely to buy cosmetics from South Korea, followed by mother care products, clothes, magazines as well as foods. However, the existing long delivery time may discourage consumers shopping desires.

Also read: China Annual Cross-border Consumption in 2015

About 53.6% of Chinese outbound tourists take shopping as primary objectives of free and easy trips in 2015, according to a research of Mafengwo and TouTiao. At least half of their travel budget will be spent on shopping.

China’s outbound tourism shopping market has reached 684.1 billion yuan (US$107.6 billion) in 2015 – far more than the market size of US$3.8 billion (estimated data by BigData) for China’s cross-border shopping market. Chinese tourists spend an average of 5,830 yuan (US$917.3) on outbound shopping, an increase of 16.3% compared to the same period last year.

Several factors have stimulated the growth of China outbound travel shopping:

• Popularity of Chinese online travel websites 
• Easier visa applications, increasing international air flights
• Increased evaluation of RMB exchange rate
• Food safety concerns in China

Since China is the largest outbound travel origin country in the world, more countries have tended to loosen visa policy and add more Chinese-oriented facilities to attract more Chinese tourists. Simple sceneries couldn’t satisfy Chinese tourists’ needs.

Hotel

66.7% of Chinese tourists prefer to stay in hotels located in the central business district. Research of Mafengwo shows that one out of five Chinese travelers wishes to stay in hotels next to shopping malls.

Catering

Travelers shopping needs also promote the development of tourism destinations catering services. The report also shows that 67% travel shoppers at the same time want to enjoy delicious foods in 2015, far more food lovers compared with 2013 and 2014.

Shopping

With the increase of outbound Chinese tourists, more tourists’ shopping focus turned from buying luxury products to cosmetics, clothes, and daily necessities which are more close to their daily lives. Duty-free shops at airports always gather a large number of Chinese tourists.

China National Tourism Administration expects over 120 million trips traveling abroad in 2015 and total expenditure of Chinese outbound tourists will reach 1.23 trillion yuan (US$0.2 trillion).

Also read: China Annual Cross-border Consumption in 2015

China’s personal care online shopping market included goods as oral hygiene products, hair care products, body care products, facial cleaning products, cosmetics, perfumes, etc. Transaction values of China’s personal care online shopping market was 206.88 billion yuan (US$32.60 billion) in H1 2015.

C2C sales accounted for 75.3% which still pioneered e-commerce models. Various subdivisions of personal care products and advantage in price gradually attracted more offline personal care consumers shopping online.

Tmall and Jingdong respectively accounted for 48.4% and 21.8% of B2C personal care online shopping market. As the largest domestic B2C platform, Tmall could attract more consumers with overwhelming advantages; Jingdong, the fourth largest internet company in China which was only next to Alibaba, Tencent and Baidu, gained returns after category expansion strategy and large advertising placement.

With the rapid development of China’s economy and rising living standards, China has become one of the world’s largest personal care market. Relying on the huge internet population and improving consciousness of health, personal care online shopping market would have better development opportunities.

Also read: China’s Mobile Market Analysis in Q2 2015

On August 6th, the Chinese largest shopping website taobao.com’s unit g.taobao.com published a report on its website, revealing the history of Chinese online shopping and preference of Chinese online shoppers through analyzing big data.

According to the Report, online shoppers in China have expanded their foothold to more than 100 countries and regions in the past decade while, in the meantime, the total number of online items has exceeded two million.

In the early years of online shopping overseas, Chinese buyers preferred shopping websites in Hong Kong and Macau. And now they have switched their attention to a wider range of areas, including Japan, South Korea, North America, Europe as well as South Africa.

To find out the shoppers favorite shopping areas, Taobao ranked these countries by the total number of transactions. The result shows that among all the regions, Japan, the United States and South Korea are the favorites, followed by Hong Kong, Germany, France, Taiwan, Australia, U.K. and Denmark.

Cross-border online shopping experienced a rapid growth in the year 2015, with new buyers taking up 28% of the overall buyers, which is much higher than the previous years.

The report also shows different preferences among new and experienced buyers. Newcomers prefer cosmetics while experienced shoppers are more of foodies. Among all the buyers, mothers are the most active ones, with baby formulas and baby products accounting for nearly half of the top 10 spots of the hottest items bought overseas online.

Another characteristic of these online shoppers is that they follow popular trends. For instance, the Russia-made cellphone Yota sold well after visiting Russian President Vladimir Putin gave it as a present to his Chinese counterpart Xi Jinping during the APEC meeting in Beijing in 2014.

The report also discovered regional differences among buyers.The data showed that shoppers from Shanghai and Beijing are the most active ones with total number of transactions accounting for 12% and 11% respectively; this followed by Hangzhou, Guangzhou, Shenzhen, Chengdu, Nanjing, Wuhan, Tianjin and Suzhou.

Interestingly, their preferences vary significantly. For example, those from Beijing prefer air purifiers primarily due to the severe pollution, while people in Shenzhen like to buy cookies.

Read more: China Online Shopping Accounted for over 10% of Total Retail in Q1 2015

In November 2014, the total retail sales of consumer goods reached RMB2,347.5 billion (US$381.7 billion), up by 11.7% year-on-year (nominal growth rate. The real growth rate was 11.2%). From January to November 2014, the total retail sales of consumer goods reached RMB23,659.3 billion, up by 12.0% year-on-year. 

Of which, the online retail sales of units above designated size was RMB385.8 billion (US$62.7 billion), increased 55.9%.

In terms of different areas, the retail sales of consumer goods in urban areas was 2,031.6 billion yuan in November, up by 11.6%, year-on-year; while that in rural areas was 315.9 billion yuan, up by 12.5%, year-on-year. From January to November, the retail sales of consumer goods in urban areas was 20,420.1 billion yuan, up by 11.8%, year-on-year; while that in rural areas was 3,239.1 billion yuan, up by 12.9%.

In terms of different consumption patterns, the catering services in November gained 254.1 billion yuan, up by 9.8%, year-on-year. The retail sales of goods gained 2,093.3 billion yuan, up by 12%. From January to November, the catering services gained 2,513.3 billion yuan, up by 9.7%, year-on-year; the retail sales of goods gained 21,146.0 billion yuan, up by 12.2%.

Month on Month Growth Rate:

Total Retail Sales of Consumer Goods in November:

Also read: E-commerce to Account for 18% of China’s Total Retail Sales in 2018

The total retail sales of consumer goods reached 2,396.7 billion yuan (US$390.15 billion) in China in October 2014, up by 11.5% year-on-year (nominal growth rate. The real growth rate was 10.8 percent). From January to October 2014, the total retail sales of consumer goods reached 21,311.8 billion yuan, up by 12% year-on-year.

China online retail sales exceeded 1.8 trillion Yuan, 9.64% of total retail from January to September 2014.

In terms of different geographic areas, the retail sales of consumer goods in urban areas was 2,075.4 billion yuan in October, up by 11.4%, year-on-year; while that in rural areas was 321.4 billion yuan, up by 12.4%, year-on-year. From January to October, the retail sales of consumer goods in urban areas was 18,388.6 billion yuan, up by 11.8 % year-on-year while that in rural areas was 2,923.2 billion yuan, up by 13%.

In terms of different consumption patterns, the catering services in October gained 265.7 billion yuan, up by 9.7%, year-on-year. The retail sales of goods gained 2,131.0 billion yuan, up by 11.7%. From January to October, the catering services gained 2,259.1 billion yuan, up by 9.7%, year-on-year; the retail sales of goods gained 19,052.7 billion yuan, up by 12.3%.

Month-on-Month Growth Rate:

Also read: China’s PMI in Oct 2014 Hits Five-month Low

In September 2014, total online display advertising spend of cosmetic brands exceeded RMB150 million (US$24.41 million) in China.

Among all the cosmetic brands, Olay spent RMB22.4 million ($3.65 million) in online display advertising in China in September 2014, ranking first by total ad spend, followed by L’Oreal and Marubi according to data from iResearch.

Online video, web portal platforms, and fashion website are the top three online advertising channels for cosmetic companies in China in September 2014. The advertising spend on online video exceeded RMB54.96 million (US$8.94 million), accounting for 37.3% of the total spend, followed by web portal (25.6%) and fashion website (17.5%).

Also read: Estee Lauder Tmall Sales in June Exceeded 10 Million

In August 2014, total online advertising spend of cosmetic brands exceeded RMB120 million (US$19.55 million) in China.

Among all the cosmetic brands, L’Oreal  spent RMB12.9 million ($2.1 million) in online advertising in August, ranking first by total ad spend, followed by Lancome and Estee Lauder according to data from iResearch.

Online video, web portal platforms, and fashion website are the top three online advertising channels for cosmetic companies in China in August 2014.

The advertising spend on online video exceeded RMB41.1 million (US$6.69 million), accounting for 35.58% of the total spend, followed by web portal (24.4%) and fashion website (19.9%).

Also read: China Top 10 Clothing Brands by Online Ad Spend in July 2014

For 18 out of the 22 categories, China sees the highest percentage of respondents who are willing to buy online compared with the remaining 59 countries and regions covered in a survey conducted by Nielsen.

It also found out that China sees the highest intent for both online-shopping and online-purchase for categories including clothing, cosmetics, personal care, toys and alcohol drinks.

By one account, China has more than 600 million Internet users and an annual E-commerce growth rate of 120% – making it the fastest growing, and soon to be the largest, E-commerce market in the world,

says Patrick Dodd, Managing Director of Nielsen China.

The deep penetration of smartphones and internet, combined with the comprehensive build-up of shipping logistics infrastructure, are quickly transforming the shopping habits and mindsets of Chinese consumers on E-commerce.

Related: Top 4 Trending in Chinese E-Commerce Market

Strong Intention for Online Purchase in China

More than half of Chinese respondents intend to make an online purchase within the next six months In 13 out of 22 different product categories surveyed by Nielsen. These categories are primarily durable and entertainment-related categories like clothing (74% vs. 64% in 2011), airline tickets (69% vs. 47% in 2011) and hardcopy books (64% vs. 50% in 2011).

Online purchase intention for categories like E-books (51% vs. 26% in 2011), computer software (38% vs. 11% in 2011), toys/dolls (54% vs. 21% in 2011), doubled or even tripled over the past three years.

Chinese online purchase intentions for baby supplies jumped 25 percentage points to 38% since 2011, and both cosmetic and food & beverage categories increased 14 percentage points  to 56% and 57% respectively, and alcoholic drinks rose to 34%.

Strong Growth for Online Sales in China Top-tier Cities

The top-tier cities are seeing stronger growth for online sales in China.

Online sales in food category grew by 37% during period from Nov 2013 to May 2014 compared with the same period in 2013. In contrast, offline channels achieved sales value of about RMB 60 billion (US$9.78 billion) while online sales was RMB 2.5 billion (US$410 million) by May 2014 in tier one cities.

Related: Top Shopping Keywords on Taobao in 2013

Online Buying Rates Exceed Browsing Rates

Chinese consumers are enthusiastic about both browsing and buying online. Electronics, mobile phones and sporting goods are examples of categories that Chinese consumers often purchase online, while many other consumers around the globe prefer to buy offline.

For more than half of the 22 categories surveyed by Nielsen, online buying rates among Chinese respondents well exceed browsing rates, especially in the categories like clothing (57% browse online vs. 74% buy online), airline tickets (48% browse online vs. 69% buy online), hardcopy books (45% browse online vs. 64% buy online) and even cosmetics (45% browse online vs. 56% buy online).

According to Nielsen, the category that sees the largest surplus of online browsing versus online purchasing is car, motorcycle and accessories. 30% of respondents said they would love to shop online, while only 24% plan to purchase online in the following six months.

Chinese Online Shoppers Spent Much Time Researching Products

Chinese online shoppers like to spend a considerable amount of time researching products before buying (72%), while 86% of online shoppers prefer  to read online reviews prior to purchase.

In a separate report by Nielsen on the online-shopping behaviors of Chinese consumers, social media (36%) is one of the Top 3 online information channels used by consumers to help make purchase decisions. Search engines (52%) and category specific websites (42%) were also within the Top 3.

Search engines, category specific websites, and social media are the top 3 channels to help Chinese consumers make purchase decisions according to a separate survey by Nielsen.

In order to increase digital engagement with Chinese online shoppers, retailers need to deliver on multiple shopper needs such as low price, wide selection, and high quality products. Moreover, consumers want to shop on easy-to-navigate websites that offer a number of unique products with plenty of images, accurate descriptions and a history of good e-reputation on social media. These points are a must for brands that hope to convert more Chinese online browsers in to online buyers.

Recommended by Nielsen.

Total transactions of China’s online shopping market, a combination of B2C and C2C markets, reached RMB6,28.76 billion (US$101.58 billion), 10.1% of total retail transactions in China, according to iResearch data.

Also read: Chinese Cross-border Online Shoppers Insights

China retail market of cosmetics product was RMB333.86 billion (USD54.32 billion) in 2013 and it is estimated to reach over RMB700 billion (USD113.9 billion) in 2017 according to iResearch.

Chinese cosmetics retail value was RMB333.86 billion (USD54.32 billion) in 2013 and it is estimated to reach over RMB700 billion (USD113.9 billion) in 2017 with annual growth rate of 20.8%. iResearch believes that the reasons for stable growth are well-developing online shopping market and established flagship stores for cosmetics brands online, which have strengthened consumers’ trust to online shopping in cosmetics products.

Total value of cosmetics online was RMB8.35 billion (USD1.35 billion) in April 2014, with C2C platforms accounting for 63.0% (USD856.1 million), and B2C platform accounting for 37.0% (USD502.9 million).

On B2C platform, Tmall, Jumei and JD.com are top three ones in online cosmetics market with value USD218.1 million, 91.2 million, 42.3 million respectively, which accounted for 83.3% of the total value in April 2014 in China.

Counting the volume or value of China online cosmetics sales, skin care is the major category in online cosmetics market, accounting for almost two-thirds, followed by make-up products with more than 20%.

Mask and face cream with per customer transaction USD13.6 and 21.7 respectively, are the best sellers among skin care cosmetics on B2C platform in April 2014. iResearch analyzed that since face is the most important part of the body skin, people use facial mask and cream more frequently; and the price of facial mask and cream online has little difference with price on traditional market, so consumers can make use of online market’s advantage.

Cosmetics products with RMB50-100 range was the best seller, accounting for 33.7% of the sales volume  of the cosmetics online in April 2014. Overall online sales value of cosmetics were driven by the middle and high-price cosmetics.

E-commerce sites, search engines and online community were the top three sources of cosmetics websites traffic. For vertical B2C and B2C with label brands, site navigation and web searching have the most powerful impact according to iResearch.

China’s top 20 cosmetics brands by total pageviews are:

1. Carslan
2. L’oreal
3. Pechoin
4. Meifubao
5. Inoherb
6. Maybelline
7. OLAY
8. Kans
9. PROYA
10. UN
11. Wetherm
12. Chcedo
13. EST
14. BE
15. Yunifang
16. Hanhoo
17. Laneige
18. Perfect
19. Nivea
20. Lancome

The top 20 accounted 21.3% of the total pageviews in China cosmetics market.