Cross- Border E-Commerce: Top 4 Categories to Watch in 2020

15/01/2020

The new year is kicked off, Cifnews highlighted the top 4 China cross-border e-commerce categories you should watch out for this year 

 

According to data, the penetration of ecommerce in China has reached 71.1% of the total Chinese population. With the population of China, this means there are over a billion people on China’s shopping apps. 2020 is already at the beginning and we highlighted the Top 4 categories to watch this year.

1. Sportswear/Sneakers

Exclusive sportswear is the new lifestyle amongst Chinese millennials. According to Euromonitor the Chinese sportswear market grew 12% to reach $31.4 billion in 2017. Surfing on main social-commerce app is evident how top influencers and emerging local Chinese pop-artists have spread the sportswear look. Is not unusual in China meeting young Chinese consumers going out for the night now wear sporty Balenciaga sneakers with Lululemon yoga pants or special limited-edition sneakers instead of cocktail dresses.

China is getting into shape and the athleisure trend is booming and the Chinese government uses its administrative power to push the sports economy. Younger millennials are more active than in the past, while fitness influencers, fitness apps and a wave of new gym openings in China have popularized the art of working out. 

 

2. Beauty & Cosmetics

According to HKTDC, Sales of beauty & cosmetics items in China reached US$36.6 billion in 2018, making it the second most valuable market behind the American, which reached US$89.5 billion in revenues. But there is still much room for growth.  In this framework Cross-border e-commerce sellers have an inbred competitive advantage. 

Consumers are seeking imported good as synonym of luxury and quality,but since China’s new e-commerce law cracked down cross-border e-commerce has emerged as a popular channel to buy foreign cosmetics brands. New subcategories such as perfume and male cosmetic are emerging. Perfume is more and more popular, with Gucci, Jo Malone, and Chanel being the top brands, while the entire male beauty sector it is expected to raise over $ 166 billion by 2022. Male makeup is already a new e-commerce trend.

3. Mom & Baby

Is not a mystery that Chinese mothers still don’t trust domestic baby products. Once again for baby needs cross-border e-commerce is the answer to let consumer get their fix. Foreign brands such as Aptamil, a2, and Nutrilon dominate the market in China, but which products to sell? Actually is difficult to get mothers to switch milk powder products, they are more willing to have their babies try new food products to provide a diversified diet. Nowadays, moms are also spending more on fashion to dress up their children.

Since children grow out of old clothes and constantly need new ones, there are always opportunities in this subsegment.  Moreover, China’s TOP influencers are becoming moms and their lifestyle change mean that the content they post is different. Instead of posting about cosmetics and fashionable clothing, now they publish about special skin creams to erase stretch marks and new products for their children. 

 

4. OTC Pharmaceutical Products

One new category to watch in 2020 is the pharmaceutical sector. China’s OTC pharmaceutical market has been growing at an average of 17% over the past few years, with some analysts expecting it to surpass the US market in size within a few years. On December 30th, government authorities announced that Beijing would be the first pilot city to allow the import of OTC pharmaceutical products through cross-border e-commerce.

Up until recently, the sale of OTC products online had been heavily restricted. Tmall is also reportedly recruiting sellers of OTC pharmaceutical products. Currently, only a few merchants such as Chemist Warehouse are selling OTC products. But given the recent regulatory updates, it is rumored that Tmall is actively recruiting merchants who can supply inventory from this category. The only catch is that Tmall requires sellers to provide an upfront deposit of 300,000 RMB, the highest amongst any other category. 

 

 

 

 

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