As US retailers prepare for Cyber Monday, the year's biggest e-commerce shopping event, estimated to reach $2.6 Billion, the figures from China's biggest e-commerce holiday, Single's Day, are being tallied and they are impressive; Alibaba Group reported record breaking sales of $9.3 Billion yesterday.
E-Commerce is booming in China and the good news for American retailers and manufacturers is that the rapidly growing Chinese e-commerce market isn't limited to just local online offerings. Chinese consumers are willing and eager to buy products from overseas, with over thirty percent (32%) of Chinese respondents saying they've already had experience purchasing overseas goods online.
With over 600 million people already online and with an estimated trade value of more than 100 billion Yuan in 2014 of online foreign products, Chinese consumers offer a major opportunity that US-based and global retailers and manufacturers cannot afford to ignore.
WHO BUYS OVERSEAS PRODUCTS?
Chinese consumers represent a significant part of the worldwide luxury market, with a trend towards becoming more demanding and sophisticated shoppers. Nearly forty percent (39%) are aged between 26 and 30 and sixty percent state they have a household income of more than 11,000 Yuan each month. Compared to their male counterparts, female Chinese consumers show more enthusiasm for buying overseas products online as they make up nearly sixty percent (57%) of overseas online purchasers.
WHY DO THEY BUY OVERSEAS PRODUCTS ONLINE?
Seventy five percent of respondents said convenience and time savings were key drivers for buying online; 59% of Chinese-mainland respondents said they enjoyed the ease of browsing-through different collections through the Internet.
WHAT DO THEY BUY?
While still a relatively new phenomenon, over thirty percent (32%) of Chinese respondents said they had experience purchasing overseas goods online, with apparel, accessories and handbags (43%) as the top category for overseas purchases, followed by cosmetics and personal care products (41%) and mother-and-baby products (30%).
A CLOSER LOOK AT OVERSEAS LUXURY E-COMMERCE
Chinese consumers showed a high awareness of luxury e-commerce especially; 77% of respondents knew those websites selling luxury items, with 45% of respondents stating that they have bought luxury items online and 48% saying they were still considering it. Luxury brand-owned websites (50%) and social media pages (49%) were their first source of information. For those who already bought online or who are ready to try, 90% of the respondents said they would be buying luxury goods online in the next 12 months.
The perception of luxury goods is linked to "quality", according to 56% of respondents, while 46% say they associate luxury goods with "fine design". Forty-two percent of Chinese respondents said luxury goods purchased can provide a sense of "taste" and "difference". They will also buy luxury goods just to reward themselves (42%).
Accessories (71%), high-end cosmetics and skin care (70%) are the two most popular categories for luxury ecommerce purchases.
SO HOW DO YOU APPEAL TO THE OVERSEAS CHINESE ONLINE SHOPPER?
Digital is the first touch point in purchase preparation. When deciding where to purchase online, the study found that Chinese consumers rely on online research prior to making a purchase. They look for online retailers with reviews of "reliable", "reasonable price" and "good quality products".
Social media is also an increasingly important platform for brands, both global and local, to build trust with the Chinese consumer. According to a recent Nielsen survey, sixty percent of Chinese shoppers have visited social media platforms and reviewed users' recommendations on independent online platforms as the main source for their purchase plan. Over forty percent of the online Chinese shoppers surveyed said they were willing to share their experiences with new products through WeChat and other instant messaging tools.
ABOUT THE NIELSEN ONLINE-SHOPPER TRENDS REPORT
Nielsen's latest annual report on online shopping behavior of Chinese consumers is aimed at providing a comprehensive overview of the e-commerce market and online shoppers. The report is based on an online survey of 4,500 respondents aged over eighteen from fourteen major Tier1 and Tier 2 cities in China. All respondents have independently made more than three online purchases in the past six months. The online-based survey was conducted from July 18 to Aug 3, 2014. Beyond the key online shopper trends, the report also gives detailed analysis of the performance of forty-six of China's key online retailers, including Tmall, Yihaodian, Joyo, Dangdang, Suning as well as many others. Online shopper preferences for these e-tailers in a total of 8 large product categories are also covered in the survey.
ABOUT THE NIELSEN MAINLAND CHINESE LUXURY SHOPPER SURVEY
The Nielsen Mainland Chinese Luxury Shopper survey polled 1,005 Internet respondents from four segmented geographic regions to understand the luxury shopping general habits and awareness.
Conducted between August 14 and 22, 2014, the study provides insight on shopping and spending behaviors across the most commonly shopped categories and key destinations.