The ECCT's Cosmetics committee hosted a lunch on the topic "How connected consumers and social influencers are changing the beauty industry" with guest speakers Desmond Wang, Managing Director, Nielsen Taiwan and Peri Chang, Entertainer and Writer. At the event Desmond Wang shared some insights on trends in the beauty market and connected consumers, with a specific focus on female beauty shoppers. Also at the event, a top beauty online influencer, Peri Chang (沛莉) shared her experience and secrets to building engagements with beauty consumers.

Wang presented some findings from a new report titled "Introducing the connected spender: The Digital Consumer of the Future", produced by the Demand Institute (which is jointly operated by The Conference Board and Nielsen).

Digitalisation is transforming many industries, especially in the way it affects how consumers interact with brands. The beauty industry is one of the key sectors that is being greatly affected by digital transformation.

According to research highlighted in the report, the main drivers of global consumption are "connected spenders", defined as having internet access and using the internet to research purchases and to shop. However, connected spenders are not merely online shoppers. They are digitally-savvy consumers who have enough income for discretionary purchases, are avid shoppers, prefer premium products and tend to be on the cutting edge of consuming trends. They like to try new things.

According to the report, the global connected spender population rivals that of the global middle class, but the number of connected spenders is growing faster than the middle class and spending more. The report predicts that by 2025, these consumers will account for half of global consumption. They are therefore important for marketers facing a sluggish global economic environment because tapping into connected spenders can help generate healthy growth.

In order to tap into this growing segment, marketers need to identify and target connected spenders, those who are most likely to purchase, within all income groups. This approach lets companies compare market sizes across countries at different levels of development. This is ultimately far more relevant for consumer-targeting industries determining how much to invest in different markets and consumer categories.

Connected spenders tend to young (52% of them are between 20 and 34 years old), single (64%), without children (57%) and confident.

They are active in social circles and social media, interactive, care about other's people's thoughts and enjoy being in the spotlight. They are proactive when collecting information in order to blend into social groups, willing to share new trends, create topics and connect with social groups and are quick to deliver the newest information and feel a sense of accomplishment from consulting for others.

Connected spenders are voracious followers of news and information on various media, which they use as the basis for chatting topics. They have a higher level of trust in the media than average middle class consumers. This includes traditional media (TV), magazines and newspapers and radio, in addition to social media.

Connected spenders do much more pre-shopping research than average middle class consumers, have a greater preference for brands before buying, read instructions and texts of products carefully and are willing to pay more for designer products.

They also spend more than average on promotions and are much more likely to buy products on impulse than the average middle class consumer. They are also care much less about monthly budgeting and financial management than average consumers.

In terms of beauty products, female connected spenders are willing to spend more on products to enhance their looks. Female connected spenders spend the most on facial care products (which includes facial toners, facial essence, facial lotions, facial cream, eye cream/eye gel and face masks. They also tend to spend more than the average women on makeup (such as lipstick, eyes make up (eye shadow/eyeliner/mascara).

While the average woman in Taiwan spends NT$2,800 per month on facial care and make-up, connected spenders spend considerably more, depending on their age group. Female connected spenders in the 35-44 age group spend the most (NT$4,500), followed by the 25-34 group (NT$3,700).

While connected spenders spend at online shops more significantly across different age groups, younger women are likely to go to brand stores or drug chain stores more while more mature consumers tend to prefer department stores.

In terms of sales value, facial care (28%) and make-up (11%) together account for 39% of spending on personal care (sanitary products account for about 12% while shampoo and toothpaste account for 9% each).

The good news for new players is that the facial care market remains fragmented. The top five brands together have just a 28% share of the market, meaning that there are plenty of opportunities for new players to make inroads and for existing players to gain market share. The make-up market is more concentrated (the top five brands control 51% of market share).

South Korea has become a significant player in the beauty market, introducing new brands and products while Korean dramas are also a significant driver of beauty concepts.

In answer to the question as to how to capture some of the spending of connected spenders, Wang cited three main factors:
"Love yourself economics": Companies need to cater to the needs of customers' requirements on product/service quality and communication to create a better life image.
Win the last mile: It is essential to create a good shopping experience.
Social Media Consumers: Create active communication on social media as a branding filter.

After Desmond Wang's, Peri Chang a well-known online beauty influencer gave a presentation in which she shared some of her experiences and secrets to building engagements with beauty consumers. She started her career in 2011 on Wretch (one of Taiwan's leading blogging platforms) where she attracted a million visitors within a year. In 2013, she set up her own site and established her position on YouTube, which she has continued to build upon ever since, with transformation make-up videos, known as "Variety Queen Peri".