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.
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.