ZMUni Compliance Centre

The year 2020 is a remarkable year. The new normality after the epidemic has greatly overturned the consumer psychology and behavior of global consumers, also having further impact on the pattern of global retail. The complicated and mobile market environment will bring China cross border e-commerce industry to a new developing stage as well as lots of opportunities and challenges. Thus Google together with Deloitte again collaborate to issue 2021 Report on China cross border e-commerce development, aiming to bring the latest industry insight for their customers.

Over the past year, the online trend of global retail has accelerated, bringing dividends to many sub-categories of e-commerce such as women's wear, men's wear, shoes. More and more online consumers choose to shop on brand official website and are also fond of trying new brands. The brand official website ushers in a new round of development and reconstruction. While the consumer behaviors are changing, in the past year the competition pattern of e-commerce major categories has been changing a little bit too. A large number of rocketing DTC(Direct-to-Consumer) brands emerged in fashion clothing, beauty&personal care, having performed their great potential.

Trending insight of consumers

Accelerated development of e-commerce under the epidemic

In 2020, virus covid-19 spread all over the world. Plenty of consumers transferred to online consumption, stimulating the rapid development of the global e-commerce retail industry. From the perspective of e-commerce retail sales, from 2019 to 2020, The overall retail sales of e-commerce in major countries in Europe, America and the Asia Pacific region have experienced a rapid growth of more than 15%.

The online shopping behaviors of different type of consumers before and after the epidemic

According to the changes of the categories of product purchased online before and after the epidemic, the consumers interviewed can be divided into 3 categories. The online shopping behaviors of them present different features:

-Online shopping trainees 12%

Start online shopping for the first time in the past year

-Online shopping excellent students 55%

Extend online shopping categories in the past year

-Online shopping conservatives 33%

Continue to purchase the product categories before in the past year, among them 82% consumers maintain or increase the amount of online consumption during the epidemic.

From the perspective of age groups:

• Online shopping trainees, average age: 42, the age distribution is even. Brand official website is their main purchasing channel.
• Online shopping excellent students, younger, nearly half of them are under 35. They extensively use all kinds of purchasing channels.
• Online shopping conservatives, more persons are at mature age, and more than half of them are over 45. Except the official websites, the third shopping platform is a channel they often go to.

The brand official website ushers in a new round of development and reconstruction

With the trend that the epidemic accelerates the development of online consuming channel, consumers have constantly spent money on brand official websites which ushers in new developing chances. 75% of the interviewees maintain or increase the proportion of online consumption on brand official website during the epidemic, among them the increased proportion of high-income consuming group is higher. Between different countries, interviewees from Germany and the UK maintain or increase more proportion of consumption on brand official website during the epidemic.

It’s noteworthy that in proportion of consumers who try new brands during the epidemic, among consumption of Furnishings, Fashion and 3C categories, Beauty&Personal Care accounts for 22% in Fashion category, ranking the second, only 1% lower than Jewelry Accessories, the top one.

Facing a new round of dividend period and reconstruction period, the brand official websites shall actively build brand awareness through effective channels, continuously optimize the operation of official websites so that they attract the consumers and constantly enhance their trust in the brand.

To further attract and keep the consumers, the brand official websites shall give prior emphasis on product cost performance, reliable payment and return service, and simple shopping process compared to the third shopping platform. Between different countries, German consumers prefer plenty stock on brand official websites while French consumers are more attracted to shop on brand official websites because of the cost performance, and Spanish consumers come to brand official websites due to the greater uncertainties of the products purchased and services on the third platform.

The best way to build consumers’ trust for brand official websites is the clear return policy, detailed product information and reliable third-party payment platform, which is especially important for the middle aged and elderly people(Generation-Z and Baby boomers).

New characteristics of consumers’ online shopping knowledge&recognition

The epidemic brought many changes in people’s lives. Home quarantine and work at home have made people pick up new living habits and hobbies. These changes have given birth to new consumption scenario and demand, changed consumption pace and brought a series of changes to consumers’ knowledge&recognition, which are reflected in both shopping motivation and purchase considerations.

• On the one hand, consumers are more likely to be inspired by promotional information and advertising, which results in "impulse consumption" purchase.Between different countries, The proportion of American and French impulse buyers is higher while the influence of celebrities on impulse consumption has drooped. “wanting to change products” remains the primary reason for rational consumption of consumers from each country. Meanwhile the epidemic has resulted in the reduction of purchase demands under specific situations(like festivals) but has motivated more emotional encouraging consumption, for example rewarding oneself or picking gifts for others.
• In addition, affective factor plays an important role in the repurchase of consumers. We divide purchase considerations into 2 types, functional factor and affective factor: functional factor such as product cost performance, richness and if the products meet the needs. affective factor such as brand reputation and brand awareness. In their first purchase, consumers are mostly attracted by functional factor, and 87% interviewees are influenced by functional factor in their first purchase, only 56% interviewees are driven by affective factor. When they repurchase the products, the proportion of affective factor rises up to 67%.
• Promotional activities can often arrest consumers to notice the brand again, however the brand that finally get consumers to repurchase its products usually brought positive product feelings, shopping experience and brand impression to its consumers in their first purchase.Between different countries, French and Spanish consumers prefer the importance of discount promotion while German consumers emphasize more on the feelings when using the brand and their first-time shopping experience and services.
• The building of brand impression not only comes from the product and shopping experience ,also its value proposition, which can be used to bond with the customers.Apart from”sustainable development” , “animal protection”, the values many brands have advocated for a long time, new value propositions such as “creativity”, “minimalism” are also rapidly penetrating the younger generation of consumer groups. Moreover, fashion category consumers are more concerned about "business ethics". Between different countries, European consumers have higher recognition of sustainable development than American consumers do while Spanish consumers are more attracted to egalitarianism.

Analysis on overseas beauty category——Beauty&personal care brands are waiting in the wings

According to the summary of data source, we think Fashion Clothing, Home & Garden, 3C and Beauty Makeup are 4 opportunity tracks. In this part we will focus on Beauty Makeup track, analyze the changes of online channels in the past year, and offer references and inspirations for China cross border e-commerce enterprises.

In aspect of online traffic, retailers are dominating in beauty&personal care category. However under the epidemic, brand e-commerce especially DTC brands show a rapid growth. Though there are great differences of visits between DTC brands and traditional brands&retailers, but the growth speed of DTC brands is fast. Couple of brands grow by 200%, and many brands break through the core price zone of 50 dollars with a good developing potential in the future.

Each sub-categories in beauty&personal care industry has different performances. Affected by reduction of going out due to the epidemic, the retail sales and search volume of makeup products have seen a slow growth while personal care category enjoyed a relatively high retail sales and the search volume keeps a high growth. The search demand increase of Skincare and Sunscreen category exceeds that of makeup&personal care category a lot, with a relatively low competition.