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2 Phenomena and 3 Trends We Can See From This Year’s 618

  •   21 Jun 2019
  •    Ye Chen
  •  1612
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    Takehome:
    From 618 shopping festival data, we can see:

    • China’s cosmetic market is still a top market with some new growth points.
    • Lipstick is still the queen of beauty products.
    • “Niche countries” show explosive power.
    • Men may be the new purchasing power in the cosmetics market.
    • A new marketing strategy has appeared.

    In the first minute of 6.18, Tmall beauty products’ turnover reached 100 million RMB.

    Also in the first minute57475 lipsticks were sold out.

    In the first hour, the overall turnover of imported beauty products in Tmall International increased by 192% year-on-year.

    This thrilling data is all derived from analysis of this year’s 618 shopping festival in China.

    What is 618 mid-year shopping festival?

    In recent years, 618 mid-year shopping festival has become another battlefield for E-commerce platforms in China. This year, as the dark horse, Pinduoduo, joins the competition, the atmosphere becoming tenser and more exciting and the prices becoming even lower.  

    Different from last year, this year’s activity started on 1st June and lasted for 18 days. During this period, all E-commerce platforms and merchants used all kinds of activities and discounts to promote the sale of their products. According to Syntun data[1], the GMV (Gross Merchandise Volume) of 50 major e-commerce platforms hit 318 billion RMB during the promotional period, representing a year-on-year growth of 11.8% and surpassing the daily transaction value of the 2018 “11.11”.

    Among all the platforms, Tmall has the widest variety of beauty product brands, so it has the richest cosmetic marketing data about this shopping festival. We can see two phenomena and three new trends from these data.

    Two phenomena

    Chinese cosmetic market is still the top market with huge potential

    The sales of Tmall Beauty Products only took 1 minute to reach 100 million while Tmall personal care products took about 5 minutes to reach the 100 million milestone

    On Tmall International, the overall turnover of imported beauty products in the first hour increased by 192% year-on-year. The growth rate of the TOP3 categories was cleansing (+407%), perfume (+352%), sunscreen (+276%). And the overall turnover of imported personal care products in the first hour increased by 300%, among which hot dyeing products increased by 550%, and high-end hair care increased by 400%.

    In the 100-million RMB brand club (the 9 brands which had a first-hour turnover in excess of 100 million), were two cosmetics brands, L'OREAL PARIS, and Lancome. 

    The following data can show the consumption upgrade of Chinese: 
    Compared with last year, 
    Medical beauty increased by 572%
    Electric toothbrush increased by 91%
    Essence increased by 134%;
    Beauty devices increased by 60%;
    Perfume increased by 63%;
    Sunscreen increased by 90%;
    Eye cream increased by 192%.

    Lipsticks are still the queen of all beauty cosmetics

    On Tmall, 57475 lipsticks were sold in the first minute while MAC bullet lipstick sold 31000 pieces in 1 hour. 

    In the activity of Group Buying, the biggest group was the lipstick group. And eight of the top 10 were beauty products. 

    Group Buying activity is aimed at consumers who mostly live in the third- and fourth-tier cities and don’t have the same high income as people who live in 1st-and 2nd-tier cities. The data also tells us that these 3rd-and 4th-tier cities offer huge potential. 

    Three New Trends

     “Niche countries” show explosive growth

    Tmall 618 once again proved to be the best growth opportunity for overseas brands in the first half of the year. Some European “niche countries” showed explosive growth and the traditional export powers (USA, Japan, South Korea, and Australia) remained strong. Here are the Top 10 countries ranked in order of growth rate within the 1st hour of the 6.18 festival:

    Russian brands, such as Librederm and KDA, attracted people’s attention for the first time and it increased by more than 50000% compared to the last year. Austria has 55 brands entering Tmall, including Lomography、AKG、RAUCH、Snack Fun and etc. These brands helped it become the second in the ranking list.

    We can also find that some countries rely on their national brands to get consumers’ attention. Here are some national brands from these countries (Most of them are cosmetic products) which had good turnover in the festival:

    CountriesProducts
    FinlandLUMENE Overnight Bright Sleeping Cream
    GreeceKORRES Greek Yogurt Foaming
    HungaryOMOROVICVA Queen of Hungary Mist
    Portugal PEOZIS High Protein Energy Bar
    NetherlandsPhilips Electric Toothbrush
    Czech RepublicDERMACOL Make Up Cover
    NorwayLIFELINE CARE Deep Sea Fish Oil
    IsraelSILK’N Hair Removal Device

    Making use of Tmall 618 to test the waters of the China market, directly contacting with Chinese consumers and improving the brand’s visibility in China has become a new and efficient method for new overseas brands to quickly enter the Chinese market. 

    Men may be new purchasing power in the cosmetics market

    618 Tmall data shows men’s makeup sales in the first hour increased by 522% compared to last year. L’Oreal men’s official store’s sales increased by 120% year-on-year. An interesting phenomenon is that data shows that many teenagers, especially boys, contributed a lot to the sales of beauty products, which might have been influenced by the 6.18 festival coinciding with the ending of China’s College Entrance Examination. 

    A new marketing strategy has appeared: Live selling

    Imagine an infomercial but instead it’s a live video feed introducing products, promotions and special offers.Taobao Live is another function provided by Tmall. At the beginning of 618, hundreds of KOLs started to broadcast online to recommend beauty products to their fans. And viewers can directly make orders in their online studio. Top KOL Li Jiaqi sold out 5000 bottles of Shiseido Ultimune Power Infusing Concentrate, selling more than 6 million rmb of product in 3 minutes.

    Live selling has become the most direct and also one of the most important ways to connect with consumers for many brands. And the cooperation with KOLs also promotes the sale of their products to a huge extent.

    During 618 shopping festival, Taobao Live led to 13 billion in turnover.

    In conclusion, this year’s 618 showed a thrilling and exciting view of china’s cosmetic market. There are opportunities and challenges for both traditional brands and new brands. To exploit these opportunities requires adapting to changing marketing channels, responding to changing consumer preference and exploiting new markets. 

     

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    ABOUT THE AUTHOR

    ChemLinked Editor

    Ye Chen is a cosmetic editor in the ChemLinked team, whose major job is to interpret, track and analyze the latest cosmetic regulatory and marketing changes in China and the rest of the Asia Pacific area. Her main focus is in mainland China, Taiwan (district) and Australia.

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