Market Opportunities – Taiwan, China, Australia/New Zealand and Canada

IHA International Offices and Representatives: Taiwan, China, Australia/New Zealand, Canada

On May 19, IHA representatives based in Taiwan, China, Australia/New Zealand and Canada summarized the top five trends in each region. Information on regional responses to global economic challenges and consumer preferences provided valuable guidance for suppliers. Presenters also included contact information for category managers at specific retailers.

Monica Lee, IHA representative Taiwan, highlighted key trends in consumer preferences.

1. Wellness, cleanliness and healthy living are growing consumer concerns. Clean living appliances and products, such as water or air purifiers and sterilizing equipment, are increasingly popular. Wellness items include exercise equipment and beauty products.
2. Consumers want products for selfcare in addition to necessary functional products. Items that fulfill emotional needs, such as luxury candles, fancy soaps, high-end bedsheets/pillows, foot massagers and home healthcare/spa-type products, are now in demand.
3. Sales of cleaning products such as detergents, soaps, bathroom/kitchen cleaners have increased. Consumers now also look for non-allergenic products and focus on eco-friendly, natural and organic products that do not harm humans or the environment.
4. The “Slashie” is a rising consumer profile—an individual (or a family) with multiple careers, jobs or side hustles. Such consumers are constantly on the go and prefer multifunctional products. Demand is high for sleek, attractive products that save time and labor.
5. Brand image is important to consumers. International reputable brands command trust and yield strong sales. Unfamiliar products can still do well as Taiwanese people are open to trying new things. However, having a strong social media presence (Instagram, Facebook, blogs etc.) is a must. Distributors will ask suppliers, “Is the brand well known/popular?”

Jackson Liang, IHA’s China representative, outlined retail developments and consumer interests in this powerful and complex market.

1. Cross-border e-commerce continues to be effective for international brands to tap into the Chinese e-commerce market, the largest in the world. With Tmall Global’s new self-service portal, merchants of all sizes, even those with little experience in Chinese e-commerce platform operation, can launch their storefronts on the platform within 30 days. Merchants who want to test their products’ sales potential in China can start with the Tmall Overseas Warehouse solution or Tmall Overseas Fulfillment (TOF) to set up direct fulfillment to consumers.

• Many social media platforms offer opportunities for new brands to engage and market their products to consumers while also driving sales to their omni-channel outlets. Suppliers should work with a marketing-driven distribution partner or hire a local marketing agency.

• Health and safety concerns increase demand for products that offer better quality, are environmentally safe and have health benefits.
  • Tier 1 and Tier 2 cities offer opportunities for recycling bins and compost bins.
  • Healthy lifestyles fuel sales for multi-cookers, non-stick cookware, and bakeware.
  • Anti-bacterial products, such as cutting boards and chopsticks, are in high demand.

• Demand for upscale products will continue to fuel the sales of housewares products in specialty supermarkets. Hypermarkets, especially in Tier 1 and Tier 2 cities, are rethinking home and housewares product offerings in their stores.

• Forecasts expect steady growth of specialty housewares retailers in China. The continuing decrease in department store foot traffic and reduced sales have forced the traditional one-brand concession stand retailers or franchises to form their own mall-based specialty housewares format stores with multiple brands and product categories.

IHA representative Robert Parker, Australia, New Zealand, offered an insightful review of current market challenges and consumer lifestyle directions.

1. Mitre10, a DIY essentials retailer in New Zealand, planned to send a large contingent to The Inspired Home Show 2020, aiming to broaden their supplier base for home and housewares product.

• Online business continues with exponential growth, primarily from local pure online players, omni channel retailers and department stores. There is now less concern about Amazon entering the market due to its lower-than-expected market penetration.

• Supply lead times, stock shortages and significant prices increases, especially from U.S. suppliers, added to the strengthening AUD, is causing significant margin pressure. Reduced production capacity and freight challenges from Asia and India have added to the difficulties for retailers to secure adequate stock. When served by local established importers with good connections, U.S. suppliers warehousing stock in Australia can benefit from lower margins than found in traditional distribution arrangements.

• Retailers and distributors in Australia/New Zealand can easily source directly in nearby Asia. There is a low tolerance for products that are made in China without a value proposition, with high MOQs and long landing lead times. Suppliers able to adapt for the market by providing quality, innovative products deliverable within a shorter lead time will have a very solid opportunity to work with the retailers and distributors. Categories continuing to show strong growth include cookware (especially cast iron – major stock shortages), kitchen tools and gadgets, bakeware, kitchen/pantry storage, home preserving products, high-end appliances and tabletop (especially stoneware, rustic, textured, rather than plain white).

• Most traditional players (pure and omnichannel) are establishing marketplaces to expand their online offerings. Examples are Bunnings “Market Link” which combines Kitchen Warehouse and numerous other suppliers and e-tailers with a wide range of products not available in stores. House.com.au features a large range of products on its website, direct shipped from other retailers and suppliers. Both sites carry product from categories totally different from their in-store category ranges.

Chip Shipton IHA representative Canada summarized economic challenges facing retailers and advised suppliers on successful approaches.

1. Maintaining a steady flow of inventory for the balance of 2021 is going to be critical to success. We are all experiencing container shortages, full shipping vessels, increased costs in both freight and COGS. Many in Canada are concerned on potential inflationary issues. Available domestic (Canadian) inventory will be critical for success in the back half of the year for traditional brick-and-mortar retailers or e-commerce.

• Canada has had a bumpy ride through the pandemic. Many of the most populous areas of the country experienced community lockdowns, and many non-essential retailers have been forced to close the doors on a temporary basis. While these lockdowns are somewhat soft, many regions have limited store capacity to 25%. Most smaller retailers are limited to curbside pickup or e-commerce. Short term alignment with stores offering essentials will still be a benefit. 

• There is a strong upside with some big-box stores. Canadian Tire has continued an aggressive approach with national branded goods and private label. Private label has allowed them to differentiate and separate from the pack. CTC will continue pushing the market and has taken steps to ensure that even its private label is Prop 65 compliant, suggesting that its digital footprint is expanding beyond the Canadian marketplace.

• Regional opportunities still exist in the Canadian market. In the west, London Drug, with 81 stores, continues to be nimble and first-to-market with goods. This is a great opportunity for companies new to the landscape. London Drug drives national brands and likes to compete with the national retailers on price. In the east, companies such as Linen Chest (33 stores) and Kitchen Stuff Plus (26 stores) continually succeed and remain differentiated from the larger retailers while offering great service and pricing.

• E-commerce continues its upward momentum. Canada is seeing more “marketplaces.” Two standouts are HBC/The Bay and Loblaw. Loblaw’s curated, brand-led, invitation-only marketplace platform enjoys $45B CAD in annual retail sales. In 2021, the Loblaw PC Express network will include 700 locations and will reach 90 % of Canadians within a 10-minute drive. Currently 85% of Canadians shop one of Loblaw’s 2,800 stores every week and 7.5 million customers are digitally engaged.