The Haitao market is expected to peak within China's overall online retail market, according to a new research from Mintel.
New research from Mintel reveals that the China's total combined online cross-border e-commerce market is expected to grow at a compound annual growth rate of 15 percent, to reach a total value of RMB 1.3 trillion (RMB 1281 billion) from 2016 to 2021.
The 'Haitao' market includes buying imported products from online shopping websites, including both domestic and overseas shopping websites.
Today, 73 percent of Chinese consumers shop for foreign imported products from domestic shopping websites, compared with only 27 percent who shop from overseas retail websites.
More than half of consumers buy from physical stores within China (56 percent), rather than from overseas shopping websites too.
Nearly a third (31 percent) of consumers buy imported food from Taiwan; 36 percent buy alcoholic drinks from France (principally wine); and 45 percent buy beauty and personal care products from South Korea.
"While the Haitao market has seen rapid growth over recent years, and should maintain strong growth for the foreseeable future, it is likely to peak soon as a proportion of online retail in China," said Matthew Crabbe, Director of Research, Asia-Pacific at Mintel. "This does not stop the Haitao route to Chinese consumers from offering significant potential market opportunities to foreign brands, but it does mean that Haitao is likely to be more relevant to brands looking at initial market entry. Retailers and brands should therefore play to their different country specialities when attempting to differentiate from their competitors."
High on France
The only territory seeing an increase in purchasing among urban Chinese consumers over the past two years is France. Sixteen percent of those who have bought imported products online purchased imported products from France in 2016, up from 15 percent in 2015.
A fifth (20 percent) of those who have bought imported products this year, purchased beauty and personal care products from France, while 36 percent have bought alcoholic drinks, including wine.
Chinese consumers who have bought imported products online rank proof of quality of products as important (68 percent), followed by ability to use third-party payment systems (44 percent).
These consumers also want detailed product information (36 percent), and Chinese-language customer service (25 percent).
"When selling foreign products online to Chinese consumers, brands and retailers really need to create a sense of excitement and entertainment about the whole process if they are to stand out in an increasingly competitive market. Simply offering a new product is no longer enough," added Crabbe.
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