The once ‘Amazon-poof’ beauty sector is being challenged by the seismic shifts brought about by the COVID-19 pandemic, triggering a lasting change for beauty and its relationship with the online world.
According to research by McKinsey & Co, China alone has seen online revenues for beauty-industry players rise 20% to 30% during the outbreak.
Now that e-commerce is a part of daily life, consumers are not expected to move away even if they are able to go to stores again as they are now used to advantages like lower prices or greater convenience.
“In APAC, we know that even before the pandemic outbreak, we’ve seen an increased penetration rate in online shopping in most markets – and beauty and personal care was one of the top categories. In 2021, consumers have experienced the pandemic and have become more comfortable with the convenience and safety of online shopping. The beauty industry may rely a lot on offline experiences, but we must say that in the coming year, the APAC region will we more e-commerce,” said Laurie Du, senior beauty analyst at Mintel.
South Korean tech start-up AIONCO is a B2B firm that supplies K-beauty products in the global e-commerce market and has connections with the top e-commerce players in APAC, including Alibaba, Amazon and Lazada.
Even though the company operates primarily in the digital space, it still sees the importance of brick-and-mortar stores in the beauty ecosystem.
“Many opinions view that because of the rise of e-commerce, offline stores are at risk, but actually because of e-commerce, offline stores have better opportunities. Recent trend shows that when online and offline stores collaborate, and online sales will have a tremendous impact on offline stores,” said Saena Sim, founder of AIONCO.
She highlighted that brands are able to get closer with consumers in-store and can connect further with consumers through loyalty programs.
As such, the firm believes that it has become more important than ever for companies to develop an effective omnichannel strategy.
AIONCO, which a part of the NIVEA Accelerator (NX) program by German personal care major Beiersdorf, has been working with NX to develop an omnichannel environment to help market brands online and offline.
With more demanding consumers and the rise of new technologies, our experts believe we will continue to see drastic changes in the beauty retail space, both online and offline.
One of the most anticipated is the potential of 5G technology and the impact it would have on the beauty industry.
Jihee Shin, marketing manager of Yesbee (AIONCO), illustrated that 5G technology would push the beauty industry into the future of retail.
“5G technology will bring simultaneous live 8K interaction media and allow for a similar or better experience than in-person… If 5G-based AR/VR service is more active, non-face-to-face service will be much more widespread than current in-person experiences, providing more detailed online service advertisements and product diversity, thus enhancing current marketing methods.”
For more expert insight on the trends, challenges and 5G technology, check out the video above.