DHgate, a cross-border e-commerce marketplace in China has shared market trends for merchants to observe and follow during an uncertain time.
From opportunism to long-termism
In the past three years, cross-border e-commerce has experienced a booming time and also a slowdown due to various factors, such as the COVID-19 pandemic and inflation.
While many opportunist merchants once believed advertisements inside a centralized marketplace would attract more visitors to their online shops and generate more sales in the short term, data showed that things are changing.
In 2022, 76% of shops spent more on advertising on Amazon, of which 13% even doubled their spending, but only 40% of all shops recorded sales growth, according to a survey recently done by cross-border e-commerce media outlet cifnews.com.
“Under the current market environment, it would not be wise to simply seek product exposure but change to a more long-term path to be close to their potential buyers,” said Allen Wang, Vice President of the Global User Marketing Center at DHgate, adding that there are three trends to follow to gain sustainable growth in the cross-border e-commerce sector.
Generation Z rises to the center stage and cares more about brands
As Generation Z, referring to individuals born between 1995 and 2009, is entering society. They have become a huge buying power that cannot be ignored.
Data shows that in November 2022, when there was the Black Friday and Cyber Monday shopping bonanza, the fastest-growing goods categories in the US market were strongly related to Gen Z.
Online sales of consumer electronics, toys, smart home products, audio products, and fitness devices increased 221%, 285%, 271%, 230%, and 218% YoY, respectively. Data from research firm eMarketer shows that 65% of Gen Z members are willing to pay a premium price for value-driven brands.
At DHgate, Insta360, a smart photography device producer, uses a panoramic stereo stitching algorithm to achieve creative effects such as an invisible selfie stick and time delay for moving objects.
The company has accumulated over 1.2 million fans on Instagram, most of whom are young people. In the Black Friday and Cyber Monday promotion, the new flagship camera X3 of Insta360, without a discount, turned out to be the best-selling camera on its official overseas online sales website.
Social media reshape the shopping experience
The number of social media users increased to 4.65 billion in 2022, accounting for about 60% of the entire population in the world. On average, an individual spent 2.5 hours on social media each day.
While the number of social media users is still increasing, online shopping takes place more frequently on social media platforms too.
“The rise of social commerce and emerging new consumer groups are game changers in 2023 and beyond, we are confident it is opening a new window for online retailers,” said Diane Wang, the founder, chairperson, and CEO of DHgate.
