Only two per cent of Australians shop exclusively online; Elle McPherson super-charges WelleCo expansion in the US; consumer spending in Australia rises for 26th month in a row; and vegan beauty upsurge driven by ethics and natural claims.
Only two per cent of Australians shop exclusively online
There's no denying that e-commerce is experiencing high dollar growth in Australia. But only two per cent of Aussies shop exclusively online, reveals the latest Asia/Pacific e-commerce report from Rakuten, the global leader in integrated marketing solutions. By contrast, 20 per cent of Australians surveyed like to shop exclusively in bricks-and-mortar stores – the highest percentage of any country in the APAC region.
The two major barriers to lifting online traffic remain – problems with shipping (38%) and concerns about returns (28%). Older Australians aged 35-plus are also not as enthusiastic about shopping online with their smartphones. Millennials prefer using mobile devices for e-commerce transactions – 67 per cent – but only 9 per cent of those aged 35 to 44 and 55 and above do so. The size of the Gen X and Baby Boomer demographics results in 65 per cent of online purchases in Australia being transacted through laptops and desktops.
Women's fashion is the number one category online, accounting for 9 per cent of e-commerce sales in the first half of 2018. In a boost for cosmetic brands, 64 per cent of Australian respondents in the Rakuten survey said they intended to buy more groceries, household and beauty products online over the next six months. A further 60 per cent also indicated they would be spending more on women's and men's fashions, health products, travel and services and media and games through to the end of the year.
Elle McPherson super-charges WelleCo expansion in the US
Australia has been tapped as one of the world's top five beauty hotspots in a UK report, alongside Korea, Japan, Scandinavia and the US. Supermodel Elle McPherson has long been a leading figure in what's being dubbed A-Beauty, dating back to her appointment as the face of Invisible Zinc in 2008. Four years ago, she also teamed with Invisible Zinc founder, Andrea Horwood-Bux, to launch WelleCo, the duo's fast-growing supplement company.
The beauty ingestibles market has exploded in recent years and racks up sales of US$90 million in the US alone. The global collagen market is expected to reach more than US$9 billion by 2025 and Australia's Vida Glow marine collagen supplements are available in 100 countries. WelleCo products have also become world-beaters and are sold in more than 190 retailers in 93 countries.
Fifty per cent of WelleCo's sales now come from the US and the company opened its first standalone store in New York's trendy SoHo late last week. Following the launch of its products in Barney's New York in March, WelleCo will also launch in US Sephora stores in October as an "anchor brand". Sephora stores in Australia already range the products as part of its Wellness section. A second US standalone store will open in Los Angeles next year.
WelleCo's Super Elixir Alkalising Greens, a blend of vitamins, minerals and probiotics, has become a global cult hit. The store openings are more of a publicity and consumer touchpoint strategy because 80 per cent of company's sales are sold online.
Consumer spending in Australia rises for 26th month in a row
Strong employment data and positive consumer sentiment have buoyed spending in Australia to deliver consecutive growth for 26 months straight, reveals the Commonwealth Bank's Business Sales Indicator. A lift of 0.9 per cent nationwide in August saw annual sales growth hit a four year high of 11.4 per cent. "We are continuing to see strong growth in consumer spending across the economy in our data, reinforcing the June quarter economic GDP growth figures", noted Craig James, CommSec chief economist.
All states reported an increase in spending in August, led by Queensland, South Australia and Western Australia. Queensland also topped the list with an uptick of 15.2 per cent in annual terms, followed by Western Australia (+12.2%), Victoria (+12%), South Australia (+11.2%), NSW (+9%), ACT (+7.6%), Tasmania (7.1%) and the Northern Territory (+6%).
Australians still live up to their lifestyle-oriented image. Clothing sales flatlined over the year, but spending in retail stores overall jumped 15.7 per cent, followed by automobiles and vehicles (+13.9%), and hotels and motels (+13.2%). We also saw a strong uptick in spending for amusement and entertainment in August, corresponding with higher credit card balances, said James.
Vegan beauty upsurge driven by ethics and natural claims
More and more beauty brands are underlining vegan claims these days and there's still plenty of potential if the trend continues. Vegan products only account for 7 per cent of new beauty and personal care launches worldwide, reports Mintel.
Makeup is leading the way in the category, says the data tracker. Between July 2017 and June 2018, over 33 per cent of vegan beauty and personal care launches globally were colour cosmetics. But skincare, haircare and bath products have been at the forefront of new product development for the past five years.
But just as you don't have to be a vegetarian to prefer natural and organic beauty products, consumers don't feel they have to follow a vegan diet to buy beauty products with vegan claims, says Mintel. Vegan-certified has a three-pronged appeal, starting with being a guarantee for no testing on animals to satisfy ethical beauty fans. Vegan beauty is also closely aligned with the natural/organic sector and ingredient transparency and viewed as more gentle on skin and hair
Snippets from the Wires
- Alibaba, the Chinese online titan, held its first Australian e-commerce expo in Sydney at the International Conference Centre this weekend, starting on Friday, the 21st. The landmark event showcased the stands of 175 Australian and New Zealand brands and retailers looking to tap into the Chinese market. Alibaba is holding a second e-commerce expo at the Melbourne Convention Centre from October 18th to 20th.
- Walgreens Boots Alliance, the first global pharmacy-led, health and well-being multinational, is launching a Boots flagship store on Alibaba's Tmall. Just the latest big name to access the platform's 500 million-strong audience, leading brands on offer to Chinese consumers for the first time include Boots iconic No 7 skincare range.
- Plenty of people still forget to use sunscreen. According to Grand View Research, the global market for after sun care is predicted to reach US$2.81 billion by 2025. Major players in the sector include L'Oréal, Unilever, Beiersdorf and Clarins.
- The US still dominates the list of cities with the highest number of ultra high net worth individuals, reveals Wealth-X, filling five out of the top 10 rankings. In descending order, the largest number of people worth at least US$30 million live in: Hong Kong, New York, Tokyo, Los Angeles, Paris, London, Chicago, San Francisco, Washington D.C. and Osaka.
