Niche consumption trends in China are catapulting global brands to prominence in China, the world’s second-largest retail market, said Michael Evans, President of Alibaba Group.
Niche interests, such as skateboarding and glamping, are particularly gaining traction among China’s younger generations, who value self-expression but still want to feel part of a community.
“Categories such as pets, haircare and outdoor recreational activities are seeing high growth on our platforms,” said Evans, who is responsible for leading and executing Alibaba’s international strategy for globalizing the company and expanding its businesses outside China.
Digital tools can help brands spot a trend as it is taking off, potentially generating significant revenue for global brands, given the market’s size.
The 11.11 Global Shopping Festival, the world’s largest retail event, fuels niche brands’ trajectory if they get their marketing tactics right during the promotion. This year’s 11.11, also known as Double 11 or Single’s Day in China, features over 290,000 brands from more than 90 countries and regions.
Around 40,000 merchants from outside China are participating in this year’s 11.11 via Alibaba’s cross-border marketplace Tmall Global.
In China, niche categories can often attract tens or even hundreds of millions of fans and even snowball into an all-consuming craze. Carveboarding, also known as surfskating, took China by storm earlier this year.
There are more stock-keeping units, better known as SKUs, in nearly every category in China than in other markets – which creates opportunities for smaller brands to build a community with a tribe of consumers.
Alibaba said 148 categories saw gross merchandise value (GMV) more than double between 8pm CST on Oct. 31 and midnight yesterday from sales between midnight Nov. 1 and midnight Nov. 10 last year. Ancient China cosplay costumes rocketed up 829% in the period as an example.
Overseas brands are introducing a pipeline of many high-quality and new products
Specialist brands such as U.S. haircare brand Olaplex and British luxury grocer Fortnum & Mason are growing in China as a burgeoning affluent middle class has spent more on self-care this year and enjoyed the Great Outdoors on the mainland instead of making overseas trips.
China boasts the world’s largest middle-income population, which Chinese academics expect to double from 400 million to 800 million people by 2035.
Queensland, Australia-based Blackmores has launched Paw, a range of natural pet healthcare products, on Tmall for 11.11.
“Overseas brands are introducing a pipeline of many high-quality and new products,” said Evans, speaking with Alizila from Alibaba’s headquarters in Hangzhou, China.
Take for example, outdoor pursuits, the GMV of fishing and camping sold in the first hour of 11.11 more than doubled this year compared with last year.
Pet care is another hot category this year. The Chinese market for premium dry dog and cat food is growing at a 20% compound annual growth rate (CAGR) and 28% CAGR, respectively, from 2015 through 2025, according to consultants at Euromonitor.
Evans singled out Instinct Raw Pet Food, a Missouri-based company in the pet care category, to highlight.
“It’s doing very well on our platform, as young Chinese consumers are increasingly looking for better quality food for their pets,” said Evans.
Stand Out From Crowd
Evans said he is often asked by brands how to differentiate themselves from competitors in China, sustain margins and improve their direct connection to the Chinese consumer.
“The key to these questions is to leverage digital technologies in brand building, customer engagement and product innovation,” said Evans.
California-based haircare brand Olaplex said it had boosted its sales this 11.11 by livestreaming.
The haircare brand’s livestream with China’s lipstick king Austin Li last month generated more sales than the brand achieved during the 6.18 Mid-Year Shopping Festival and last year’s 11.11.
Key Quotes From Michael Evans, President of Alibaba Group:
“Categories such as pets, haircare and outdoor recreational activities are seeing high growth on our platforms.”
“Overseas brands are introducing a pipeline of many high-quality and new products within these categories.”
The key to these questions is to leverage digital technologies in brand building, customer engagement and product innovation.”