Recently, Douyin released Investment Cooperation Norms of “Global select import supermarket”(hereinafter referred to as Norms) and formally opened the business of Global select import supermarket with the business covering daily necessities, wine and snacks, beauty and skincare and mother and baby categories, and invited cross border brand owners to open stores on the platform. The norms have taken effect on 24 March.
Douyin expands its cross border e-commerce business by opening the import supermarket
In 2020, cross border e-commerce in China was booming. Data from General Administration of Customs. P.R.China shows that the total volume of national cross border e-commerce import&export reached 1.69 trillion yuan. Among them, the total volume of export was 1.12 trillion yuan, an increase of 40.1%, and the total volume of import was 0.57 trillion yuan, an increase of 16.5%. In the first half of 2021, the total volume of national cross border e-commerce import&export reached 0.8867 trillion yuan, a YOY increase of 28.6%. The scale of import&export is continuing to enlarge rapidly and cross border e-commerce has been the new momentum to boost the development of foreign trade. The data from Statista, the third party institution indicates, the amount of consumers who purchase overseas products through cross border e-commerce platform in China will reach 0.16 billion, with a terrific increasing trend.
In the recent years, Douyin e-commerce is continuously increasing brand official flagship stores on the platform. However in cross border business, the proportion of imported brand official flagship stores on Douyin is still limited while stores on cross border e-commerce platform and various distributors account for a lot more proportion.
The re-expansion of Douyin cross border e-commerce is also a measure for strengthening the Commodity Force of the commodities on Douyin. According to the Norms, the businesses should be international brands and the cooperation mode is directional invitation. The deposit required to be paid by businesses of wine, snacks, beauty care, mother and baby clothing is 100,000-200,000 yuan. And “Global select” sets a stricter access for brand qualification. Except the brand owners settling in the platform, it’s required that the distributor should be General distributor ,or Exclusive, First-class distributor.
Overseas Brands enter Chinese market with the support of platforms, Cross border e-commerce of Beauty category continues to flourish
Compared with the traditional foreign trade, the procedures of cross border e-commerce are simpler, the operating costs are lower, the related policies are less stricter, so it’s the most convenient channel for overseas beauty brands to enter Chinese market. For instance, imported cosmetics shall go through the “Animal Testing”, if you are doing cross border e-commerce business, you can be exempted from that. Therefore lots of brands who refused to run the animal testing has entered Chinese market through cross border e-commerce.
Besides, cross border e-commerce platform will provide overseas smaller brands with more resources and support policies in aspects of marketing and optimization of supply chain. Therefore, cross border e-commerce has become the trial channel for smaller brands to see if it’s suitable to open business in Chinese market. It’s known that in the past year, there have been more than 2,000 medium-size and small-size brands successfully entered Chinese market by trial on Tmall International, achieving the monthly sales of 100,000 yuan.
As one of the important channel of livestream e-commerce, the rapid development of Douyin e-commerce has made it one of the significant channel for international brands to enter Chinese market.
2021 Overseas Hit Product Insight Report of Douyin E-commerce(hereinafter referred to as the Report)shows, in the past six months, the views of overseas hit products related contents multiplied on Douyin.The hot sales of overseas hit products on Douyin e-commerce have attracted more and more businesses to join in, the number of orders, buyers and sales hitting new highs. Overseas hit products with guaranteed quality, friendly price and diversified categories are going popular among the consumers. In single category, skincare, cellphone and beauty rank the first three. It can be seen that in Top 10 categories, skincare/beauty remains the Top 1 hot category of overseas brands that consumers are most fond of. It’s easy to make hit products and make the brand popular in skincare/beauty category. Meanwhile consumers hold more expectations for skincare products and they will give priority to overseas products with stable reputation and popularity.
In the Report, new overseas brands performed excellently while the proportion of it is near to that of the older overseas brands. Beauty category is the main category in both the new and older overseas brands, including The history of whoo, Estee Lauder, SK-II, AHC, 3CE, etc. Besides, the source of overseas brands is continuing to expand with more and more smaller brands coming into Chinese market.
(Data source from Douyin e-commerce&Suanshu e-commerce academy, April-October 2021.)
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