The daigou boom may have faded but China is still a major growth opportunity for Australian health and beauty brands.
Alibaba’s 2021 Singles’ Day, the world’s largest online shopping festival, set a new record, generating AU$115.8 billion in revenues over the 11-day extravaganza last November.
More than 900 million consumers in China and 290,000 merchants and brands took part. Australia was again among the top five foreign countries selling into China, alongside the US, Japan, Germany and Canada.
Australian vitamin and minerals supplements were the big winners, followed by beauty supplements and skincare products. More than 2000 Australian companies have opened online stores on Alibaba, including leading beauty brands and retailers such as Mecca. JD.com, the other Chinese online giant, is also a major gateway for Australian brands selling into China.
Gen Z and Millennial female consumers in China are the most important demographics when it comes to buying makeup and skincare. Alibaba’s Tmall reported recently that 50 million under-27 buyers purchased cosmetics through the platform over the past year.
Younger Chinese are the sweet spot for premium beauty brands. Consumers under 29 years of age account for nearly 60 per cent of the category’s sales.
Many Australian beauty brands specialise in natural, organic and clean beauty products. According to Mintel, more than 77 per cent of Chinese consumers preferred clean, natural and organic beauty products and 60 per cent believed they were more effective than their mainstream counterparts.
In a recent study from ESW, the market leader in DTC global commerce, more than 70 per cent of Millennial Chinese shoppers said they made cross-border purchases in 2021. By contrast, Gen X shoppers made only 14 per cent of cross-border purchases, followed by Gen Z (11%) and Baby Boomers (2%).
Lower prices and product diversity were the twin magnets for Millennial Chinese shoppers, revealed the ESW report. More than 24 per cent of respondents said they shopped online because of cheaper prices and 22 per cent revealed they shopped internationally because they couldn’t find similar products locally.
Other major findings in the ESW survey revealed that 53 per cent of respondents prefer to shop online and 45 per cent intended to spend more in 2022.