According to data in Quarterly Monitoring Report on China’s Cross-border Import Retail E-commerce Market in 2017Q2, in 2017Q2, the market scale of China’s cross-border import retail e-commerce market was RMB 93.82 billion, a comparative growth of 17.6% on moving base.
The “6.18” mid-year grand promotion has extended the competition from several categories to multiple categories and manufacturers including overseas commodities. In addition, cross-border commodities were being more and more favored by consumers. With this regard, major manufacturers in the market successively intensified their efforts on brand cooperation, warehousing and logistics, promotion and generalization, etc. in hope of obtaining favorable feedback from the market during the Grand Promotion. To accurately seize the future trends, it is of great necessity to explore the achievements and the causes thereof of the manufacturers in intensive competition.
Though excellent achievements have been made for the cross-border e-commerce, the internal competition will never end.
In the second quarter each year, the most highlighted and valued event of the e-commerce merchants is definitely the “6.18” Grand Promotion. And the performance of cross-border e-commerce merchants was quite astonishing this year. On the very day of June 18, the transaction volume exceeded RMB 100 million just 7 minutes after the event was announced to the started, and the total transaction volume was increased by 500% on a year-on-year basis. The number of users of JD Global doubled during the “6.18” Grand Promotion compared with the same period last year. And the amount of per customer transaction for self-operated commodities was over 30% higher than that of the same period last year. And the sales volume of Kaola increased remarkable on June 18 and was over 30% higher than the sales volume of the “11.11” Grand Promotion last year.
The excellent performance could not go without the efforts of the merchants on brand channel construction. To seek for new highlights and breakthroughs for the event, merchants intensified efforts before the approaching of “6.18”.Tmall joined hands with Germany supermarket Aldi; JD Global joined hands with UK chain retail supermarket ASDA; Kaola joined hands with Woolworths, the largest supermarket in Australia. And Amazon Global was directly connected to Amazon Japan. In addition, emerging international brands such as POLA, Garden of Life and Rebull were also successfully introduced to Chinese market, which widely attracted the young and fashionable customers.
According to Analysys’s analysis: The construction of supply chains, especially the depth and width of brand corporation, is crucial for the favorable development of cross-border e-commerce. The selection of imported commodities and cross-border commodities by the consumers is on one hand based on the improvement of consumption abilities and the extension of individualized demands due to overall consumption upgrading, and, on the other, the trust of overseas commodities on the quality and brand. In the negotiation and cooperation with overseas brand owners, for brands with relatively high reputations, cross-border e-commerce merchants may seek for endorsement with the brand influence of such brands to win trust of the consumers. Meanwhile, as such brands are rare resources with limited number, the preemptive cooperation will avoid agitation of competitors and seek for advantageous position in market competition. In addition, for brands with superior quality but relatively low brand popularity domestically, cross-border e-commerce merchants may help such brands to open up and expand the Chinese market with its own channels and influential powers. Such brands would have relatively great development potentials after a series of market cultivation. Meanwhile, cross-border e-commerce merchants also seize related markets and obtain advantages in competition with the high cost-effectiveness of such brand. No matter for cooperation with what type of brands, the cooperation relationship between the merchants and the brand owners would be a great highlight: Cross-border e-commerce merchants compete around brand owners. And factors such as selection of brand owner on partner and the cooperation pattern of the brand owner and the merchant decide the degree of healthiness of the development of the cross-border e-commerce as well as the success or failure of such brand owner in Chinese market.
New Trends of Consumption Groups, Great Chances for Cross-border E-commerce
Analysis on consumption groups and their consumption features has been the fundamental work that cannot be ignored in e-commerce operation. However, for cross-border e-commerce, researches on users thereof will provide strong supports on the selection of overseas brands, orientation of category expansion, determination of promotion rhymes, etc. According to monitoring of Analysys Wanxiang, there’re some differences between the cross-border e-commerce users and overall e-commerce users. To be specific:
According to age distribution comparison, the proportion preferring cross-border e-commerce to comprehensive e-commerce is greater in young users under 24; and according to sex distribution, the proportion preferring cross-border e-commerce to comprehensive e-commerce is greater in female users.
According to Analysys’s analysis: Commodities with targets users of young females born after 1990 or even 1995 will be more favored if cross-border e-commerce channels are taken. On one hand, the unique understandings of consumers born after 1990 or 1995 are different from those born after 1970 or 1980, what they are focusing on is not just brand popularity. What’s more, commodities consistent with their characteristics and can better show their personalities will be more favored by them. On the other, consumers born after 1990 or 1995 have advanced consumption concepts, however, generally their economic abilities and consumption abilities are relatively low. Therefore, brands and commodities with relatively low prices will be more attractive to such consumption groups. With this regard, some characteristic makeup brands such as AHC, JAYJUN, Martidern, Isdin and Sesderma are becoming more and more highlighted by young ladies. Meanwhile, with the growth of age, economic abilities and consumption abilities of the consumption groups born after 1990 or 1995, in future 10 to 20 years, they would become the main force of the entire consumers. Once their loyalty on brand consumption is established, it can be interpreted that the foundation for long-term development has laid for such brand. Therefore, for brand construction and investment, visions should not be limited to present and should be focused on future.
In addition, among users preferring cross-border e-commerce, a great number of users are from 20 to 40 (basically users born after 1975 or 1980.)
According to Analysys’s analysis: Consumers born after 1975 or 1980 have relatively strong consumption willingness and receptivity on emerging things. In addition, they have relatively strong consumption abilities and are the main force of the e-commerce consumers. Meanwhile, they’re also shouldering burden of the family and society and multiple pressures. Therefore, as the backbones of their families, they have to attach greater importance on the health issues of the family members. Meanwhile, as influenced by exaggerated advertisement and frequent counterfeit products of domestic medical products and health care products, in addition, the domestic manufacturers have relatively shorter R&D history on health care products, limited technological experience and insufficient corresponding solutions and products to satisfy the diversified demands of the consumers, which makes it a major factor for imported health care products such as GNC, Puritan's Pride, Blackmores, Jamieson and Sisse in China. In addition, with the health ideologies more and more accepted by the people, consumptions on health will for sure be increased sharply and become new highlights. This is a great chance for cross-border imported health care products to further expand the influential power in Chinese markets.
In 2017Q2, as influenced by the “6.18” Grand Promotion, some change happened for the competition situations of the entire markets. The focuses of transaction were continuously concentrated to top merchants. Tmall Global still took the greatest market share of 22.3%. It had been ranked the first place since last year when Analysys began to monitor cross-border import e-commerce to this quarter. JD Global ranked second with a share of 18.0% with the transaction volume greatly increased in the “6.18” Grand Promotion initiated by it. Kaola ranked third with a share of 17.5%. Though the third quarter each year is traditionally the slack season for e-commerce industry, it is estimated that merchants in the field of cross-border, especially those in the first echelon, would not slack off on market competition. Meanwhile reinforcing the current positions, they would try the best for more market shares.
As most of the market shares were taken by cross-border import retail e-commerce merchants belonging to the master site, the competition patterns were also similar to the overall market. Tmall Global still ranked top with a share of 31.5%. JD Global ranked second with a share of 25.5%. VIP Global ranked third with a share of 12.5%.
In the market competition of independent cross-border import retail e-commerce merchants, Kaola further reinforced its leading superiorities with a share of 59.6%. The Little Red Book ranked second with a share of 18.4%.And Fengqu ranked third with a share of 3.4%.
Industrial analysis provided by Analysys is made mainly based on macroeconomic industrial data, final quarterly user survey data, historical data of the companies, quarterly business monitoring information of companies, etc. by Analysys's industrial analysis models with reference to market research, industrial research and company research approaches. And such analysis mainly reflects the market status quo, trends, break points and rules as well as the development status quo of companies.
Analysys believes that the data drawn according to the abovementioned industrial research approaches is within the recognized acceptable error range within the industry and can accurately reflect the industrial trends and change rules.
Such research outcomes made based on professional research approaches aim to provide decision reference. For the actual data of a specific company, please refer to the financial reports released by that company.
Analysys is a leading big data analysis company in the Chinese market. Since the establishment, Analysys has established the big data and analysis service ecological system cored by massive digital user assets and algorithm models. Analysys has been dedicated in providing product services such as digital user portraits and competition analysis and assisting in product operation for enterprises; and assisting enterprises in increasing revenues, saving expenditures, increasing effectiveness and evading risks by operation and management on digital user assets of the enterprises. The products in Analysys Family include Analysys Qianfan, Analysys Fangzhou, Analysys Wanxiang and Analysys Boyue. By June 30, 2017, Analysys had covered 2.07 billion intelligent terminals and monitored over 2.05 million mobile APPs.