Millennial mothers are disrupting China’s massive retail market by buying products "Made in the USA." They buy American goods because they seek superior quality and trusted brands. These discerning shoppers dominate three of the 10 most popular product categories in China: cosmetics and personal care, mom and baby products, and toys.
Experts expect sales of these categories to rise for several reasons. Births in China soared nearly 8% in 2016, with deliveries of almost 18 million newborns, due in part to the Chinese government’s decision to phase out its one-child policy.
American products are also alluring, as Chinese consumers seek items that are “difficult to get from domestic vendors,” according to a recent report. In 2008, experts found milk and infant formula in China contained chemicals linked to renal failure, potentially affecting 300,000 children. Since then, middle class Chinese consumers in particular have sought trustworthy baby products manufactured overseas.
For traditional imports, foreign healthcare products require approval from the Chinese Food and Drug Administration, application costs and up to two years of assessments. However, cross-border e-commerce has greatly lowered these entry barriers. Products intended for personal use and shipped as personal parcels must only meet the standards of the country of origin.
Retailers can use these proven ways to market their products in China and capitalize on the strong demand for American products:
Connecting with China’s millennial moms
Reaching millennial mothers in China through cross-border e-commerce can help US retailers boost sales, as the market reached $917 billion US last year, per iiMedia. Three-quarters of Chinese online consumers who buy overseas products fall within the ages of 26 to 40, which overlaps with the prime millennial age range, according to iResearch.
US retailers have two ways to sell using cross-border e-commerce: online marketplaces and standalone Chinese websites. Well-established toy companies, such as Hasbro, Barbie and Toys “R” Us, launched in China on online marketplace baby.tmall.com. Other brands like Fisher-Price have successfully entered the market by creating their own Chinese e-commerce websites.
However American retail companies enter China, they must understand millennial mothers and adapt their marketing strategies to capture their attention and significant purchasing power.
What Chinese millennial moms want
Chinese consumers are tech-savvy, as smartphone penetration among internet-using millennial mothers is higher in China than in any other country, according to eMarketer. These sophisticated shoppers access diverse information sources before making online purchase decisions, and expect fast, seamless multichannel options, including mobile payment.
The hottest product categories among China’s millennial mothers are:
- Cosmetics and personal care: The superior quality and prestige of these products have made US brands Estée Lauder, Kiehl’s and Origins top sellers in China.
- Mom and baby: Food poisoning incidents and poor-quality merchandise led Chinese shoppers to view foreign products as safer and more trustworthy than domestic goods. Popular US baby brands include Gerber, Earth’s Best and Carter’s.
- Toys: The end of China's one-child policy and rising demand for quality toys have boosted sales of children's toys and games. Total toy sales in China will almost double from $8 billion US in 2010 to $15 billion US by the end of this year, the Hong Kong Trade Development Council reports.
How to woo China’s millennial moms
The following marketing essentials can help US retailers boost their brand awareness and sales among China’s young mothers.
1. Tell the brand story: Retail companies can emphasize the perceived benefits of their heritage – such as how their American products offer superior safety and quality – to earn brand trust and consumer confidence.
2. Provide omnichannel convenience: Successful US retailers allow time-starved Chinese mothers to shop whenever and however they want by offering easy, convenient multichannel service in stores, online (desktop and mobile) and on social media (WeChat and Weibo).
3. Partner with influencers: Working with key opinion leaders, China’s equivalent of influencers, can catapult US retailers into the spotlight. Partnering with popular KOLs in established online motherhood communities can boost brand credibility among millennial mothers.
China’s influential millennial mothers are shaking up retail by buying more American products through cross-border e-commerce. US retailers can earn the trust of discerning Chinese shoppers by selecting the right channel and the right product to tell their brand story, and emphasizing how they offer unparalleled quality, safety and convenience to these women and their families.
Franklin Chu is managing director U.S. for Azoya International, a provider of turnkey cross-border e-commerce solutions to assist retailers looking to expand into China through a cost-effective and lower risk method. A rapidly growing list of over 35 retailers in 12 countries have partnered with Azoya to expand into China with ease, including US retailer Babyhaven, French fashion retailer La Redoute, Australia’s largest pharmacy group, Sigma, and UK based Feelunique, the largest online beauty retailer in Europe.