The COVID-19 pandemic accelerated a trend of customers opting for online shopping rather than retail. Amid a general stagnation of online shopping growth, one small subset of e-commerce has far outperformed the broader online marketplace.
Industry Trends: The overall e-commerce industry has seen mixed signals in 2024, according to a report filed by Similarweb.
Overall growth in desktop and mobile e-commerce visits grew by 1.4% year-over-year. Visits dropped previously dropped by 3% in 2022.
The effects of inflation have acted as substantial headwinds for e-commerce sales. As prices have risen, customers have cut spending in some discretionary categories. A notable exception is in luxury and jewelry, which remain popular among higher-income consumers less affected by inflation.
Ultra-cheap online marketplace Temu, owned by PDD Holdings Inc (NASDAQ:PDD), has become immensely popular among consumers given inflationary pressures. Amazon.com Inc (NASDAQ:AMZN) recently announced an initiative to challenge Temu in the “fast fashion,” “bargain site” industry.
Korean Cosmetic Boom: Korean beauty and cosmetics product revenues grew 127% year-over-year on Amazon, higher than the broader beauty category.
Korean culture has become increasingly popular worldwide, largely driven by musical group BTS and Korean movies and television. Additionally, Korean products have been touted by social media influencers concentrated in skincare.
Korean fashion retailer Musinsa, financially backed in part by KKR & Co (NYSE:KKR), grew 250% year-over-year in the U.S.
Beauty brand Olive Young, owned by parent organization CJ Corp (KRX: 001040), saw 69% growth over last year.
Electronics Stall: Consumers have opted to limit electronic purchases, seen as non-essential, given inflationary pressures. Year-over-year growth declined by 2.1%.
Customers, especially in countries such as Vietnam, have increasingly tended to scour for low prices by searching on multiple websites rather than having loyalty at just one.
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