A new Group Purchase category is now available on Baidu Feng Yun Bang,a list updated in almost real-time at http://top.baidu.com. The list reveals the top keywords used in historical searches for the day and the week and — for some categories — even, the month. When browsing the page, visitors can see the top ten group purchase websites and a scrolling window detailing purchases made by shoppers’ gender, generation (70s, 80s, 90s, etc.) and location.

According to Baidu Feng Yun Bang, on April 29^th female searchers favored Jumei (www.jumei.com), the first cosmetics-focused group purchase site. The site also reveals generational differences; 90s include Jumei as one of their top ten favorite sites while post-70s and post-80s do not.

Location-wise, netizens from tier one cities like Beijing, Shanghai and Guangzhou, have almost the same site preferences. While, shoppers in lower tier cities in Jiangsu, Zhejiang, Guangxi, Fujian, Hunan and Inner Mongolia have more diverse preferences. Province-based sites like  Luobotuan (www.luobotuan.com, offering group purchase services only in Zhejiang) and city-based sites like 0731 (www.0731.com.cn, only in Changsha) are favored by lower tier city consumers.

Sources from iTrust.org.cn

A recent report on group purchase websites development and credit investigation shows that a staggering 1664 group purchase websites exist as of the end of November 2010. Online group purchase sales are estimated to reach 1 billion CNY by the end of 2010 and its success can be attributed to an irresistible combination of limited time (flash buy) and consuming something that others deem worthwhile.

Movie tickets and restaurant discounts are rapidly gaining popularity with several million orders in November alone. Group purchasing sites are now gradually picking up snacks, cosmetics, clothing, and electronics as well.

“I have to say, most of my spare time is occupied by the group purchase. Now I have a group-purchase schedule guiding me – Tuesday night for the group purchase restaurant, Friday night for the group purchase movies etc. It’s fun, but I am getting too busy. I just don’t want to miss the delicious discounts!”
– Apple, 23, female, Shanghai

Chinese cosmetic brand Forest Cabin promotes itself as an environmental care advocate. Their line is 100% natural without animal testing; recent products focus on bringing these natural ingredients to the forefront: green tea, orange, olive, wheat, ginger and even lotus leaf. Much of the packaging reflects this ‘all natural’ aesthetic, but Forest Cabin also incorporates nostalgia – for example, one of the most popular products (Supersoft Hand Essential Lotion) bears a vintage image of a Shanghai woman with delicate white skin and traditional dress. Forest Cabin believes in word of mouth and public presence as the best endorsement – they do not advertise or employ celebrity spokespeople. Their chain stores can currently be found in Shanghai, Beijing, Wuhan, Dalian and Shenyang.

The importance of high-end skin care in China is nothing new – luxury cosmetics tend to cost less than fashion items, so women are more likely to splurge on them (even in times of economic crisis). While the cosmetic industry in China continues to be dominated by foreign brands such as L’Oreal and Olay, smaller skin-care brands are using an ‘all natural’ approach to R & D, and it seems to be working.

The Chinese brand Herborist was founded in 1998 and describes itself as a “modern interpretation of traditional Chinese herbs.” This concept of using all natural ingredients is appealing to Chinese youth.

I’ve used Herborist, I liked it.  All natural, plant derived – Chinese beauty recipes with modern technology. - Scarlett, female, 24, Shanghai.

Some brands are taking the all-natural cosmetic concept a step further by incorporating luxury food ingredients.  We found red wine face masks at Forest Cabin, claiming to whiten skin, and sugar cleansing cream at the Korean Face Shop.  Aurora, female, 22, Shanghai, has been using olive oil to remove make-up and moisturize her skin for the past several months.  “I like that [olive oil] is all natural and so good for me; I also think it is unique to use on my skin, not just in food.”

As the world’s second largest market for luxury items, China has earned its seat at the head of the table. KPMG recently completed a survey (“Refined strategies: Luxury extends its reach across China”) to determine how the global economic downturn has affected consumption in China. Interviewing over 900 people between the ages of 20-44 across 15 cities, KPMG uncovered that 62% maintained spending levels on expensive goods in 2009 and 2010.

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To better identify how young Chinese are understanding and communicating luxury, we took a pause to ask a group of luxury consumers (not enthusiasts) our top 5 questions about the origins of luxury brands. These youth had previously purchased luxury items including bags from Gucci and LV, Chanel and Dior accessories, Dior glasses and premium cosmetics including Chanel and SK II.

In this exercise, we noticed that as many live at home and can dedicate most of their income to their own personal pleasure, luxury was not seen as unattainable. It was seen as a choice.

Judging by how Chinese shop nowadays, Gucci is considered a high-end brand, not really luxury. White collars just need to save a couple months’ salary to get a LV bag. – Cynthia, 23, female, Shanghai

Here’s what our respondents had to contribute to our exploration:

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Even though Chinese spend more time online than most of their international peers, brands in China have been slow to organize and execute their stores online. That said, we were excited that consulting company L2 created a “Digital IQ Index,” analyzing and ranking 100 luxury brands’ digital presence in China. They had previously conducted this exercise in the US and we were keen to see where the chips landed for luxury brands in China.

In total, 37% of brands ranked at “average” or above, while 63% were described as “challenged”, “feeble” or “luddite.” Of the low-tech bunch, 64% lacked basics including store locator functionality, 42% had mobile-enabled sites and 10% had enabled online shopping.
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