Internet Giants Investment on Sex Toys Products Business

Internet Giants Increase Investment on Adult Products Market
          Eleme, with the meaning of “are you hungry?”, is a famous online and intime fast delivery life service company, especially for food takeaway fast delivery. Recently, Eleme’s pharmaceutical business team has launched a new business called "Hileme", positioned as an adult entertainment delivery platform.

     Meanwhile, it is also learned that, following Tiktok E-commerce, Kwai E-commerce also formulated a series of measures to regulate the erotic products in March, and released an announcement on the adjustment of the rules for the invitation of erotic products on the 20th, adding a new sub category of erotic products. The entry rules are the invitation system, and the types of access stores are flagship stores, exclusive stores, and supermarket flagship stores, which took effect on April 2.

     This is not the first time that an Internet giant has set foot in the business of adult sex products. As early as 2017, NetEase launched the adult entertainment brand "NetEase Spring Breeze", with sales exceeding 100 million within one year of its launch.

      At the end of 2023, Tiktok e-commerce also began to set foot in the adult fun track. Its Tiktok store opened the category of sex goods to merchants, and allowed merchants to sell in the form of shelves in store windows, Tiktok Mall and other channels.

     According to the "2022-2023 Survey and Analysis Report on China's Sexuality Products Industry and Consumer Behavior" released by iMedia Consulting, the market size of sex products has shown a stable upward trend in the past 10 years, reaching 168.53 billion yuan as of 2022. In the past decade, China's adult products market has maintained a high-speed growth trend.

     With a market of billions and a trend of rapid growth, adult entertainment products are becoming a business that big companies are competing to lay out in the vertical e-commerce track.

Giant Companies Entering the Adult Sex Toy business

     Although they are all involved in the business of adult sex toys, Internet giants have different ways of playing.

     This time, Eleme, based on food delivery, has created an adult entertainment product delivery platform called "Hileme", providing a variety of entertainment products and adult products such as condoms, airplane cups, jump eggs, and lingerie. The platform offers 7X24 hours of service, with the fastest delivery time being 30 minutes.

     On the "Hileme" interface, it can be found that from the perspective of product classification, the products sold mainly fall into five categories: women's appliances, men's appliances, condoms, sex toys, and sex underwear. Each category will further list the sub categories of the product and display which stores are selling the product.

     The entire shopping process is no different from ordering takeout on the Eleme platform. After the user places an order, the products will be packaged by the nearest and available store, and then handed over to the platform rider for delivery to their doorstep.

     It is understood that "Hileme" is currently in the testing stage and may be officially promoted to the public in the future.

     Different from Eleme, TikTok and Kwai entered the adult sex toy track in the form of e-commerce. Since TikTok opened the category of sex toys in November last year, Kwai E-commerce has also followed up the relevant plans.

     On March 20, 2023, in order to better promote the platform business development and platform compliance management, Kwai e-commerce adjusted the business rules for the entry of the sex goods category merchants, added a new sex goods subcategory, and the entry rules were invitation based, and the types of access stores were flagship stores, specialty stores, and store flagship stores.

Photo caption: Announcement on the adjustment of the rules for the invitation of Kwai interest category.

     We also found that although TikTok and Kwai e-commerce have successively formulated specifications, there are still many restrictions on this category, such as restrictions on publicity requirements, prohibition of releasing goods, picture specifications, etc.

     Compared with Eleme, TikTok and Kwai, which cut into the track from the e-commerce platform, NetEase went off to do adult sex products in person and launched a sex brand called "NetEase Spring".

     NetEase Spring adopts a pure original brand model and seeks manufacturers worldwide to manufacture it. Its main selling point is aircraft cup products, and it has created the Spring TRYFUN 1st and 2nd generation series products.

     In order to create new selling points, NetEase Spring has also launched the "Spring Energy" app, which connects the entire series of intelligent products of Spring TRYFUN through immersive science fiction storyline setting, virtual companions, and anthropomorphic IP interaction, enhancing the diverse interactive and fun experience.

     This type of interactive gameplay based on apps not only provides NetEase Spring with its own product sales channels, but also further explores potential market users. According to data from Qimai, the cumulative total download volume of the "Spring Energy" app in the Android channel has reached 1.1 million times, and the daily download volume is also showing a trend of further growth.

     In order to broaden the consumer market for young people and expand the channel of live broadcast with goods, NetEase Spring has recently settled in TikTok E-commerce, opened a "flagship store of Tryfun family planning products", and launched relevant live broadcast publicity in TikTok. It can be seen that various parties have started a new round of layout around the subdivision track of adult sex products.

Billions of Businesses Behind the “Shy Business”

     The adult sex toy business has always been a low discussed but high profit business, and platforms have entered one after another, also eyeing the big cake in it.

     Mr. A has been a delivery person in TikTok for less than three months, but he has helped brand stores sell more than 13000 sex toys with sales of 150000 yuan, and the repurchase rate of some products is still increasing.

     Mr. B sells inflatable dolls on Temu. He said that Temu may be the best e-commerce platform for making sex toys on the entire platform, because the platform will provide traffic to these types of merchants, carry out precise marketing and promotion, and through keyword optimization, advertising, and other methods, let more consumers in need see their products. The sales of single item inflatable dolls in their store have exceeded a thousand units.

    It is understood that Temu also places adult interests and contraception and pregnancy testing as independent categories in the first and second positions under the main medical channel, which has more advantages in terms of traffic exposure.

    Many businesses are happy to see these new platforms add to the adult sex toy market. For many businesses operating such goods, the huge flow of Kwai and Tiktok can undoubtedly improve their sales.

Money is not only made by merchants, but also by platforms.

     During the 2023 JD.com Double Eleven period, gender health products made it to the list, and the sales of male specialty medication in just three minutes exceeded one million. The family planning and contraception category increased by over 200% year-on-year throughout the period. Gender products have become one of the categories with impressive sales performance during e-commerce promotion festivals.

     According to data compiled by Magic Mirror Insight, the market size of sex products on Taobao and Tmall platforms reached 9.21 billion yuan from January to November 2023, accounting for nearly 80% of the market, further expanding.

     There is still significant room for growth in the market size and demand for sex products. According to data from I Media Consulting, the market size is expected to reach 208.13 billion yuan by 2025. From a demand perspective, young people have become a huge consumer force. According to a report previously released by Analysis Think Tank, the main consumers in China's online sex toy market are those born in the 1980s and 1990s. According to the "Buying Transcript" released by Taobao in 2019, the post-90s generation spent 300 million yuan on sex products throughout 2019 alone.

How to break out of the "vulgarization trap" in low-key business

      Industry analysts believe that Tiktok and Kwai need to step out of the vulgarization trap in terms of the promotion of interesting products, further break the marketing restrictions, and provide emotional value for consumers through "pleasing themselves", "breaking stigma", and "healthy self love" to show the pursuit of the platform.