Online retail the wave of the future for Asia-Pacific region

Studies reveal that e-commerce in Asia will soon be a bigger business than in the Western world, with Forrester Research, a global market research company, predicting that combined internet sales from the Asia-Pacific region will reach $768bn by 2017, making them bigger than those in Europe and North America combined.

Chinese situation​

The boom in e-commerce is increasingly being driven by China. Laurie Du, a Mintel beauty analyst, recently told CosmeticsDesign-Asia.com that innovative digital marketing will now be a requirement for companies to take advantage of the countries’ “fragmented” ​use of traditional media and growing internet use.

Shanghai-based digital marketing company Marketing China advises the increased use of social media campaigns on popular platforms such as Weibo, in addition to taking advantage of word-of mouth on the internet- stating “​In many areas, especially in the cosmetics, consumers in China are mostly attracted by the products via the word of mouth.”​

China’s top site for online makeup is Jumei, an e-commerce behemoth which has mushroomed since its founding in 2012. The firm is now on track to earn a profit of $100m off sales of $1-1.6bn in 2013.

E-commerce allows South Korea “Gangham Style” breakout​

E-commerce also allows trade to easily cross international boundaries. In November, the South Korean Seoul Business Agency found that out of 239 respondents from China, 26% preferred to shop for South Korean cosmetics online.

SK is a trend setter for the Asia-Pacific region and, increasingly, the rest of the world, with cosmetics, fashion and music from the country becoming highly popular in overseas market- as evidenced by the runaway success of artist Psy in the West.

Chinese online consumers are increasingly eager to purchase Korean cosmetics, with tie-ins with K-pop bands such as Girl’s Generation and Exo being used as marketing tools by brands such as Nature Republic.

Growing population and disposable incomes​

According to a Euromonitor report on cosmetic markets in 2012, ‘Beauty and Personal Care in China,’ these big players are increasingly prioritizing e-commerce thanks to an increasing number of internet surfers in the region and China’s large population with growing disposable income.

In general, major global companies such as L’Oreal, P&G and Shiseido are still the market leaders in this region, particularly China, with local players tending to be targeted at marginal or niche markets.