What does the future hold for fashion and beauty e-commerce?

05 May, 2021


Asendia expert, Hendrik Kummeling, shares 5 key insights on where the major opportunities lie for the sector

As the COVID-19 pandemic has shown, it is impossible to know exactly what lies around the corner in any industry - and fashion and beauty retail is no exception. However, pandemic aside, there are a number of things that are more predictable. Technology, media landscapes, new sales channels, emerging markets and shifting demographics are just some of the factors that will determine how fashion and beauty commerce will evolve. Tracking these things, and preparing to capitalise on them, might be the difference between success and failure in the long-term.


Hendrik Kummeling, Asendia Managing Director Global Accounts & Solutions, is an expert in international online retail.

Here, he shares his insights on the future trends and developments in cross-border
e-commerce and specifically, the dynamic world of fashion and beauty.





 Burgeoning Asian markets offer great future potential

It’s well known that China is the largest e-commerce economy in the world, with Japan at number 4, but there are a number of other, emerging Asian territories that merit the attention of fashion and beauty e-tailers.

The Philippines, Malaysia, Thailand, Vietnam and Indonesia are among the fastest
growing e-commerce markets in the world for two main reasons:
emerging middle classes and increased digitalisation.

When more people have better access to the internet and more money to spend, e-commerce flourishes.

It is worth noting that many desirable western brands do not have a physical presence in these territories. And even if they do, their products are not always easily accessible to consumers. As such, e-commerce is the only way shoppers can get their hands on these sought-after goods and therefore, an appetite for cross-border purchases looks likely to endure.

Naturally, there are challenges to cross-border success in the Far East; most notably, in logistics and last mile delivery. To deliver on time and prevent lost parcels, brands will need to form partnerships with local experts who have a deep understanding of the networks and infrastructures in which they operate. At Asendia, we combine our global expertise with the local knowledge of our partners (like Ninja-Van, Southeast Asia’s largest and fastest growing last-mile logistics company) to ensure a smooth delivery experience for consumers.



Omni-channel sales and offshore warehousing

Retailers with omni-channel offerings have fared best throughout the turmoil of the pandemic and this mix of retail options looks set be increasingly important in the future.

COVID disruption has forced people of all ages and backgrounds to embrace new sales channels and, thanks largely to convenience, this will continue once physical shops reopen.

For retailers, offering a seamless brand experience in all channels is key.

Buy online, pick-up (or return) in-store (BOPIS/BORIS) can eliminate the pain points of exclusively online or offline retail models, negating such issues as stock availability, delivery charges, long queues and complicated returns.

While e-commerce has flourished in the last twelve months, the pandemic has brought challenges for the sector too, causing major disruption to global supply chains. A drastic reduction in passengers has led to airlines running fewer flights, which in turn has dramatically cut supply for airfreight, pushing prices sky high. Where flights are still running, they do so with fewer passengers so airlines seek to cover their costs on freight, further exacerbating the issue.

To mitigate such extra costs, retailers can keep inventory closer to consumers through offshore warehousing. Provided they can identify where stock needs to be and when, offshore stock makes shipping quicker, cheaper and more sustainable. Tech like AI will prove very useful in making stock predictions more accurate so that retailers can effectively manage their inventory around the globe and cut transport times and costs.



Utilising tech to reduce return rates

Returns are expensive, yet inevitable – especially in fashion e-commerce where 30% of items are typically returned, sometimes rising to 50%. With so much competition, and with customers expecting free returns, there is a huge emphasis on driving this return rate down.

Investment in tools to limit returns is sensible, and e-tailers will explore many of these tools in the coming years. Accurate colour guides, avatars and sizing technology will become commonplace to help make sure customers are satisfied with their purchases first time round.

Cross-border returns are especially complex because of customs procedures, duty drawback requirements, the large distances involved and the pressure to refund customers as quickly as possible.

By analysing purchase and return data, retailers will be able to identify shoppers with a frequent return habit, and then tailor their offering to help minimise the number of items they send back. Things like loyalty schemes, highly targeted lines or incentives might be used to achieve this.



Social media will continue to change the way people buy fashion and beauty products

The significance of sites like Facebook and Instagram continues to grow. Providing platforms for influencers and consumer reviews (plus a means of highly targeted, measurable advertising), fashion and beauty brands simply cannot afford to ignore social media.

The likes of Jenner, Ronaldo and Swift have unbelievable power when they put their
weight behind a brand, but smaller, more specialised micro influencers, will help deliver
more relevant endorsements to more niche audiences.

To give you some kind of an idea of the value of influencers, fitness fashion brand Gymshark built a billion-dollar company through their much-followed ‘athlete community’, while beauty influencer Huda Kattan has launched her own cosmetics company, Huda Beauty, which brings in upwards of $250m in annual sales.

Highly adept at pioneering new revenue streams, social media platforms have been quick to spot potential in fashion and beauty. TikTok and SnapChat have successfully rolled out fashion partnerships and there is existing momentum for ‘social selling’. It seems that it’s just a matter of time before social media companies become dominant fashion and beauty marketplaces in their own right.



Cryptocurrencies – a new way to pay

Speaking of Facebook, the company has plans to launch its own cryptocurrency, Libra in the near future. Elsewhere, PayPal has announced that its users will soon be able to link crypto currency to their accounts and Elon Musk has sanctioned Tesla’s investment in $1.5bn worth of Bitcoin, stating that the currency will soon be accepted on its vehicles.

These high-profile endorsements serve to normalise cryptocurrencies, making them more tolerable to those who were previously sceptical.

It seems that cryptocurrencies will become an ordinary method of payment, and this
has huge implications for fashion and beauty e-commerce.

For cross-border purchases, these single global currencies negate complicated exchange rates and will help to deliver frictionless purchases.

Cryptocurrencies will also open up entire new markets. For example, there are a huge number of people in the world that do not hold bank accounts - currently a real barrier to e-commerce. However, by enabling digital, one-click purchases for all, currencies such as Bitcoin will open the doors of online retail to vast numbers of new shoppers.



e-PAQ by Asendia – delivering e-commerce growth

Asendia are experts in international e-commerce delivery, sending parcels to over 200 destinations across the globe.
Our range of e-PAQ delivery services are reliable and cost-effective, with a range of features to suit every
e-tailer and every shopper.

Find out more about Fashion & Beauty e-commerce today and speak to one of our friendly team today to see how we can help you grow your online fashion or beauty retail business.


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