WPIC VP of E-Commerce Sally Zhang Discusses Emerging Trends among Chinese Consumers
As Summer 2019 comes to a close, we sat down with WPIC’s VP of E-Commerce, Sally Zhang, to talk about some of the trends she is seeing emerging from China’s e-commerce space. As a Certified Tmall and Taobao Lecturer with Alibaba’s Taobao University, Sally trains businesses how they can leverage China’s leading e-commerce platforms to grow market share and drive revenue for their brands.
With fewer than 70 Certified Lecturers worldwide this year, Alibaba has invested resources in training Sally and sends her across the Asia Pacific region to speak with businesses across various sectors and industries.
WPIC: Sally, thanks for sitting down with us again.
Sally Zhang: Happy to chat.
WPIC: Can you talk a little bit about what you’ve learned as a Certified Tmall and Taobao Lecturer over the past year and what trends you’re seeing in the market?
SZ: Certainly. More so than anything else, I’m seeing three major trends emerge in first half of 2019:
First, the shopping habits of younger women versus older women seem to have switched places. Historically, older Chinese women were traditionally more likely to buy food, primarily, and do their best to save their money. They were, for the most part, frugal, and purchased primarily goods that were classified as “essential” rather than “luxury” items.
That’s shifted in recent years. Now, their discretionary spending has gone up significantly and, in the e-commerce community, they’re labelled as the “dance”, “photography” and “makeup” group. If you look at the items they purchase most frequently, women over the age of 40 primarily purchase lipstick, face creams, foundation, eyebrow pencils, cotton balls and other eye creams. Year over year, that section of the cosmetics department has seen an overall increase of more than 200 per cent.
Women over the age of 50 exhibit similar characteristics, but their focus is more on skincare, rather than the eyes. So, they’re purchasing toners, cleansers and day creams. That section among that age group has increased by 300 per cent year over year!
Now, when you compare those ladies with younger women, you see completely different trends. Women born in early 90s are much more frugal, accordingly new labels that Tmall uses. They are described as: “saving money”, “purchasing food”, or possibly “raising a child or a pet”.
For Generation Z (born after 1995), the consumption of home-based goods has grown rapidly. They’ve taken to purchasing tissues, scented candles, and similar home decor items. That category for that age cohort has grown close to 200 per cent YoY. CPG items like detergents, laundry supplies, cleaning tools increased 60 per cent when compared to the past year.
Gen Z purchases a lot of items for their pets, as they see their pets as their own children. That category has increased by over 300 per cent YoY, with some items selling at 5x the volume as in past years.
WPIC: Fascinating. And how do women and men compare in these buying patterns?
SZ: Great question, and this brings me to my second main observation.
In many ways, including their buying habits, the roles of women and men seems to have switched on Chinese e-commerce sites.
Many women are keen on home improvement, online games, tech products, so there certainly has been a democratization of those items. Women’s purchasing of gaming products has doubled, their purchases of “smart” devices has increased by 300 per cent YoY and purchase of home improvement products have gone up by 200 per cent. Women are also downloading a lot more sports applications on their mobile devices, with some apps having more than 60 per cent of their user base as female.
And on the other side of the coin, men have become more enthusiastic about kitchen supplies, children’s clothing, and beauty products. It seems as though fathers in particular are more likely to purchase kid’s clothing than at any time in the past (17 per cent in 2019 compared to 12 per cent in 2018), and they are more likely to cook for the family as well.
And we’re seeing the amount of men purchasing skin care products go up as well, which coincides with the interest that retailers are seeing in the market. Beyond just skincare, some men in China have even taken to wearing light make-up, so we expect cosmetic penetration amongst men to continue to grow.
WPIC: Really interesting insights. Any other observations?
SZ: The last main thing I would say is that Chinese consumers have become more and more conscious of the limits on their time and are using money to solve problems that would normally take a significant chunk out of their days. This especially applies to consumers born in the 90s.
For example, bread machines or appliances that cook food for you have increased by more than 80 per cent YoY on Taobao. “Lazy” eye shadow or curling irons, and similar cosmetics items increased in sales by more than 150 per cent YoY.
Time-saving workout equipment like “instant abdomen machines” and “lazy slimming machines” grew in sales volume by more than 50 per cent, while smart sweepers grew by more than 50 per cent and smart wipers grew by more than 150 per cent YoY.
WPIC: Thanks Sally. Any final thoughts?
SZ: One last thing I’ll point out, for context, is although we are discussing growth in percentage terms, it’s important to remember category size. Smaller categories tend to grow at a much faster rate than larger and more mature ones.
For instance, women’s clothing is the biggest category across all of Tmall, and as a result, its’ growth has slowed in the past. But it’s important to remember that although it only has a 5% growth rate each year, it is still the top category on Tmall in terms of Gross Merchandise Volume (GMV). For small sub-categories like the ones we have discussed above, although they are growing rapidly, their total market size is smaller than women’s clothing.
WPIC: Terrific insights, Sally. Thanks for sharing all this information with us today.
SZ: My pleasure.