E-commerce and cosmetics put together are a good mix for those who are ready to set foot on the Chinese market. Even thougt the market is quite fragmented, it is still a market that has plenty of room for those being creative. All you have to know is the layout of the market and a good strategy
The transaction of online purchasing of cosmetics product has reached 8.35 billion RMB in April 2014, which included B2C 3.09 billion RMB with 37% and C2C 5.26billion RMB with 63% of the total transaction. As we can see from the pie chart 2nd above, 3 giants-Tmall, Jumei and JD take 83.3% of cosmetics market on E- commerce platform with 1.34, 0.56 and 0.26 billion respectively.
Generally, the cosmetics products range from 50-100 RMB has big percentage of sales numbers, which was about 60% of total sales volume. However, high- ends products above 300 RMB makes the most profit of cosmetics market on E- commerce platform. For instance, fragrance products like perfume weren’t the best-selling products in the cosmetics market (2.3% of total sales volume).
However it has contributed to nearly 10 million of revenue and which equals to hair product (10 million of sales revenue in April. See pie No.4 below) but it needed to sell more pieces of hair products in one month.
Skin care products were the most popular selling products which have been shown in both sales number and sales revenue.
From the sales volume perspective, about 17.5 million of skin care products were sold in just April, which was made up to 62% of total sale volume.The total selling number of other cosmetics products like make up, hair care, fragrances and others were only 38% of the total sales number.
On the other hand, the sales revenue of skin care product was 1.77 billion RMB With 68.3% of the total marketrevenue,followed by beauty and make up products (21.3%), hair care products (4.3%), fragrance products (4.1%) and other cosmetics related product with 2% of total revenue.
Why skin care products are always welcome by the online shopping lovers?
Firstly, the best selling products were face masque and lotion at 81.9Rmb and 133.6Rmb for each respectively which was reasonable and acceptable for customers. The most important of all, the price was normally cheaper than physical stores.
Secondly, there was not very much a difference of buying skin products online and shopping at physical store. Compared with skin products from physical store, products online have the same quality and function of product which makes it has more competitive advantages on E-commerce.
As we can see from the chats above, face wash, facial cream and packaging products had the best sales revenue in April. Particularly for facial products are all time favorite for the customers