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Beauty and personal care e-commerce sales are growing
E‐Commerce » Trends | 04/15/2015

Health & beauty: a glowing e-commerce opportunity

 

Touch, smell, trial and advice are important for consumers buying health and beauty products. But that’s not proving to be a barrier to ecommerce success, as the category is now one of the fastest growing worldwide.

In 2013, beauty and personal care e-commerce sales grew by 29 per cent worldwide, compared with overall retail growth of 6 per cent, and ahead of apparel on 25 per cent, according to statistics compiled by Statista.

In the UK, Datamonitor predicts the category will grow by more than 80 per cent between 2014 and 2019.

And elsewhere, where local markets are less well served by domestic online players, cross-border purchases are increasingly common. PayPal valued international sales in this category at $7.6bn (€7bn) in 2013 – second only to apparel (at €11.5bn) – and highlighted the US, Germany and China as markets holding the most potential for foreign retailers in this respect.

The Chinese pick is backed up by Nielsen research, which shows Asia leading the way in online purchases of these goods – presumably because of access to a greater range of products. 43 per cent of Asian respondents said they intended to purchase cosmetics online – compared to 21 per cent in Europe and North America.


The challenge of trial


Established brand names are clearly helping to win over online savvy consumers, but for a category that traditionally sees consumers “try before they buy”, free samples, online advisers, peer reviews and other content strategies have become an important part of the picture.

These can be a challenge for cross-border retailers to achieve, but according to AT Kearney’s “Beauty and the E-commerce Beast”, the biggest audience are “creatures of habit” who find online shopping most convenient for replenishing stocks of their favourite products.

The same report also emphasises that common requirements – a secure shopping environment, product availability, competitive pricing and free shipping – are also more important than strategies designed specifically for the category.

But before retailers jump into new markets, it’s best to seek advice on any import or transport restrictions for certain goods, such as perfume, which is classed as a flammable liquid and can be dangerous in large quantities.


Online medicine


Another related area that is growing in popularity is online medicines. It’s also another example of where it’s important to seek advice as there are different regulations around their sale and advertising in different markets.

The market for online medicines is dominated by the US, where there are fewer restrictions. But in Europe, the sale of prescription medicines is currently limited to Scandinavia, Germany, the UK, the Netherlands and, to a limited extent, in Switzerland. France has only allowed the sale of over the counter medicines since July 2013, while the law changes to allow the same in Austria in June 2015.

  • Germany & UK:
    In Germany and the UK, where online orders are picking up pace, consumers are driven by price discounts (51 per cent and 46 per cent respectively, according to a 2014 report from healthcare marketing consultant James Dudley Management).

  • France:
    France has developed more slowly over the past two years. But the country offers a good example of the opportunities available to foreign retailers. Fewer than two per cent of French pharmacies (234) are registered to sell medicine over the internet, yet a Harris Interactive survey in February 2015 found that almost 50 per cent of French people are willing to buy online medication without a prescription.

One of the biggest barriers to growth in France – echoed across Europe – is concern about counterfeit goods. In July 2015, a new safety logo is available from the European Commission to identify trustworthy online pharmacies. This should go some way to tackling the issue, and further boost sales in this fast-growth category. But retailers that focus on reassuring their customers are likely to be rewarded with greater success. 

 

Consumer interests beauty & care