Despite the implementation of tougher taxation policies, China’s cross-border e-commerce sector maintained momentum thanks to the combined forces of consumption upgrading (消费升级) and the rise of a younger consumer group.
A recent report from Tmall Global and CBNData shows that the online sales value of imported goods maintained a growth rate of more than 30% in 2016. However, that is slower than the 40% growth seen in 2015. The online penetration of China’s total domestic import consumption also continued to rise.
Along with the growth, the market is recording a major shift in consumer demographics – there’s a notable increase in the number of young buyers (defined as those born after 1988). This group, which now accounts for nearly half of all consumption on Tmall Global, represents more than 50% of newly added customers on the platform in the past year, showing a healthy future for purchasing power, the report pointed out.
A transition in personal and family circumstances may have contributed to this change; a majority of customers born between 1988 to 1993 have just got their first job after graduating from university, getting married, or having babies. But the consumption power of post-95 and post-00 groups is nascent as this group has yet to find stable income.
Sneakers, maternity and baby products, cosmetics, alcohol, and snacks are the most popular items among the 1988-1993 group. The younger, 1994 to 2000 group favors cosmetics, personal care products, gadget kits, as well as comics and animation derivative products.
Not only are the Tmall Global users getting younger on average, but more and more of them are from lower-tier cities. Over 31% of the new customers in 2016 were from third and fourth-tier cities in China, compared to about 24% of the already-existing customer base. This reflects the growing market reach of Tmall Global, as well as a rising living standard in the less developed cities.
Interestingly, the report also revealed some unexpected boosts in the sales of some very specific categories. The vote for Brexit and subsequent drop in the value of the British pound brought about a spike in sales of products from the UK. The screening of popular Korean TV drama Descendants of the Sun (太阳的后裔) drove the sales of a YSL lipstick that the lead actress wore while a deterioration in air quality boosted the sales of air purifiers.
The biggest level of spending on Tmall Global came from Shanghai, Beijing, Hangzhou, Guangzhou, and Shenzhen.
The top 5 countries for imported goods on Tmall Global were Japan, the U.S., South Korea, Germany and Australia. Here’s a further breakdown of top selling items from these regions:
Japan: beauty products and serums; diapers, strollers, and baby products; personal care products
U.S.: health foods and supplements; baby formula and snacks; bags and luggage
South Korea: beauty products and serums; cosmetics and perfume; women’s apparel
Germany; milk powder, dietary supplements, and snacks; kitchenware; health and nutrition supplements
Australia: health and nutrition supplements; milk powder, dietary supplements, and snacks; coffee, oatmeal, and instant beverages