US inflation hits new high, e-commerce prices rise in many categories

Affected by the current complex international situation, the epidemic, and supply chain factors, inflation in the United States has reached a new high. In addition to the soaring prices of bulk commodities, the prices of many categories of products on e-commerce platforms have also risen. For sellers, it is particularly important to adjust their layout according to market and consumer demand.

US inflation hits new high, e-commerce prices rise in many categories

Compared with the inflation rate of 7.5% some time ago , the US inflation index has hit a new high recently. The consumer price index in March has risen to 8.5%, the highest since December 1981. People's daily consumption prices have risen accordingly, and e-commerce platforms are no exception. The prices of many categories of products are constantly rising.

The latest Adobe Digital Economy Index report shows that compared with previous normal price consumption, online product prices increased overall in March. The additional spending caused by the price increase is equivalent to Americans "losing" approximately US$2.8 billion.

Online product prices remain high in many categories, with 14 of the 18 categories surveyed seeing year-on-year price increases. In comparison, groceries and clothing, as popular daily categories, saw particularly significant price increases, with clothing seeing the largest increase, up 16.3% from March 2021, and groceries up 7% year-on-year.

During the epidemic, the number of people keeping pets has also increased, driving the pet economy. During the 2021 holiday season, online sales of pet-related products increased by 63% compared with the previous period . The prices of pet products have also been rising. In March this year, the price increased by 7% year-on-year, while the increase in January and February was only 4.7% and 5.6%.

In addition, the earlier epidemic situation at home also drove people to invest in home decoration, and related products such as home gardening also ushered in a wave of sales. Tools and furniture decoration categories are also among the growing ones, and their prices have increased year-on-year for 16 consecutive months. Compared with March 2021, the prices in March this year increased by 8.5%.

Among the categories surveyed, prices in four categories have dropped compared to before, namely electronic products, jewelry, toys and computers.

In addition to price increases, supply chain tensions have also led to insufficient supply and demand, with statistics showing that there are approximately 3.1 billion out-of-stock messages. Despite this, online spending in the United States remains strong, reaching $83.1 billion in March, $16 billion higher than the $67 billion in February and 7% higher than the record $77.7 billion in March last year.

Although inflation has intensified, daily consumption is still necessary. Consumers have also turned their attention to multiple e-commerce platforms, which provide them with more shopping options and allow them to compare prices in many aspects in order to choose the most cost-effective method. In addition, with door-to-door delivery, the online shopping habits developed during the epidemic have also been continued by consumers.

For some small sellers, in order to get orders, they still have to lower prices while the overall market price is rising. One seller said, "If business is not difficult, who would be willing to lower prices? This is a last resort, just losing money to gain publicity, but the platform freight will increase in a few days, and the price will eventually increase accordingly."

Rising freight rates and recurring epidemics have recently brought many difficulties to cross-border e-commerce sellers, but given the overall environment, we should remain optimistic, start from the market and consumer demand, and pay more attention to local consumption trends.

Despite the impact of inflation, sales of many categories in the United States are still growing

Although the inflation situation in the United States is not optimistic and prices are rising, the consumption demand and purchasing power of local consumers remain resilient. Foreign media reported that by 2022, the price increase has not significantly slowed down the consumption speed of American consumers. However, it can be found that consumption habits have changed slightly.

From the perspective of market consumer categories, affected by the epidemic, festivals and other factors, cleaning products, sanitary protection products, holiday gifts, etc. in the US market are experiencing rapid growth in sales .

In terms of cleaning products, as the public's awareness of health protection has further increased and they spend more time at home, the number of times they clean indoor and outdoor items has increased, which has driven the sales of such products. According to relevant surveys, more than 70% of people are paying more and more attention to the healthy environment at home.

It is understood that among all cleaning products, the sales growth of cleaning wipes is particularly obvious, with an increase of more than 190% . In 2021, the sales of cleaning wipes in the United States reached approximately US$2.2 billion, and market demand is still increasing.

In addition, due to the continued impact of the epidemic, the sales of protective products such as masks, disinfectants, gloves, etc. still maintain the hot sales momentum of the previous two years. This year, there was a surge in demand for children's KF94 and KN95 masks in the United States . However, in general, compared with the early stage of the epidemic, the purchase of masks by American consumers has declined, but not significantly.

In addition to health and safety products, holiday gifts have also been heating up since April. As a national holiday in Europe and the United States, Easter has become a node that both buyers and sellers pay attention to. Although it is not Easter yet, Easter-related products such as candy, eggs, rabbit decorations, and Easter trees have become hot search terms since March . In 2021, the sales of many Easter-related products increased by more than 200%.

This year, the market demand for Easter products is still considerable. According to a joint survey by the National Retail Federation and related institutions, 80% of Americans will spend $20.8 billion to celebrate Easter this year . In addition, the more than 8,100 respondents who participated in the survey will spend an average of $169.79. Among the expenditures, food is the largest, followed by clothing and gifts.

In addition to the products that are popular at certain times, the US market has maintained the purchase trend of "evergreen" products in the first quarter , and the sales of home decorations, small appliances, clothing, etc. remain stable. The purchase of home decoration accounts for about 30%, clothing accounts for 21%, and the average share of other categories is 20%.

As inflation in the United States continues, some of the local consumers' consumption habits are also quietly changing. Products with low prices, large promotional discounts, and safety and reliability are more popular. Compared with offline stores, e-commerce platforms have more advantages in this regard, and online purchases will continue to be popular. At the same time, this consumer demand also provides more room for development of the country's second-hand resale market, and various forms of sales models are advancing side by side.

In such an environment, domestic cross-border sellers must not only see the risks of the local online market development, but also have insight into the future development direction. According to the market situation, sellers' products, prices, promotions and marketing methods must be phased, stable and flexible. Only in this way can they cope with the uncontrollable external environment and reduce the impact of the market.

USA

Inflation

E-commerce