Online vendors seek niche foreign brands
Online shopping has been a driving force in introducing imported goods into China’s mainland market. The purchase of retail merchandise on China’s cross-border, e-commerce sites reached 1.5 trillion yuan (US$217 billion) in 2017, according to a report by Westwin and Nielsen. Transactions are forecast to hit 1.8 trillion yuan this year and 2.2 trillion yuan by 2019. The average perconsumer spend in the past 12 months was 13,000 yuan.
Domestic Internet giants are sparing no efforts to parlay their vast consumer bases into channels for foreign niche brands that may appeal to smaller, selective buyers.
Tmall International, the imported goods section of Alibaba, is bringing more than 200 foreign brands to the first China International Import Expo.
It has also made a commitment to helping import US$200 billion worth of goods from more than 120 countries and regions over the next five years.
Liu Peng, general manager of Tmall International, said six procurement centers have been set up around the world to help boost the profile of these brands. After the expo, some of those products will become a part of a long-term exhibition to allow consumers to get a closer peek at the latest imports.
About 80 percent of foreign brands have made their China debut on Tmall International.
Online shopping sites are striving to attract consumers who want to be the first to try out new import products.
Beijing resident Jasmine Wang said she often searches for new products on Tmall. “I can read through users’ comments and see if these new offerings suit me,” she said.
Beauty products are among the topselling foreign brands, and it isn’t only women’s cosmetics that are attracting attention. The men’s grooming market in China is expected to reach 16.04 billion yuan by 2022, compared with 10.4 billion yuan in 2013, Euromonitor says.
House99, a premium male-grooming brand launched by football star David Beckham, officially hit the Chinese market at the end of September.
The brand’s moisturizers, beard oils and styling gels went on sale here through Tmall and JD.com.
JD has long been strong in consumer electronics, but now it is moving heavily into the beauty and personal care sector.
JD.com said the number of shoppers for import goods added 37 percent in 2017 from a year ago, and that the total amount of import brands added 1.5 times in the first half of this year compared with two years ago.
Nielsen data also shows that sales of import beer, biscuits and liquid milk through online channel grew much faster than those sold through physical stores.
On Tmall, Boots, Albion and footwear retailer Footlocker are among some 500 brands opening flagship stores this year in China.
Ahead of the import expo, Tmall is also launching a series of events in collaboration with selective national pavilions and to turn offline exhibition spaces to interactive zones featuring imported products from countries and regions that include Denmark and Indonesia.
Tmall Innovation Center, the retail innovation arm of Tmall, is helping brands tap into the Chinese market, using precise market analysis, real-time consumer insights and product concept testing.
More than 12 million types of new products have been launched through Tmall last year. The number is expected to top 20 million this year.
Internet companies are using their deep connections with overseas markets and the domestic consumer bases to seek out products that differ from ordinary retail merchandise.
And they no longer serve as sales channels, but marketing tools for those who have little understanding of the domestic market when they first enter the local market.
Even companies more associated with brick-and-mortar stores are eager to market imported goods. Suning Commerce Co has pledged to spend more than 120 billion yuan on overseas procurement during the CIIE, eying to bring 5,000 overseas brands to China.
Its most recent plan for the next three years aims to spend 10 billion yuan to introduce European affordable luxury items, accessories, health and nutritional food, and home interior decor merchandise.
It’s also opening overseas offices in Italy, France, Germany and Australia.
“The import expo is a good opportunity for Suning to connect with high-quality brands and bring Chinese consumers a wider choice of goods,” said Xu Hailan, general manager of Suning Shanghai.
“We will continue our strategy to forge a long-term and mutual beneficiary partnership with companies from all over the world,” said Suning Holding Group Vice President Sun Weimin.
Shanghai-based, cross-border shopping site YMatou, which allows overseas merchants to sell on its platform, will also be seeking new business opportunities at the expo.
Besides showcasing products currently available on its platform, it’s planning to source 100 million yuan of merchandise, with a focus on personal care and beauty products and leather goods.
Local startups are also keen to get into the market.
“We hope to seek partners at the import expo to bring in products that are popular overseas but relatively unknown here,” said Albert Shen, co-founder and chief executive officer of BorderX Lab.
The company’s online shopping application Bieyang currently connects with the shopping sites of foreign department stores such as Bloomingdale’s and Barneys.
Sales of Everlane, a US-originated apparel brand, experienced a 10 percent jump in sales in the two years since its website was first connected to Bieyang.
Bieyang doesn’t own any of its own warehouses.
Merchandise is directly shipped from overseas, but consumers are spared the problems of registering on foreign shopping sites and dealing with foreign languages. The company said it also is looking for opportunities at the expo to share resources such as customs clearance and logistics capabilities with foreign vendors.
Alibaba has made a commitment to helping import US$200 billion worth of goods from more than 120 countries and regions over the next five years. — Ti Gong