Taobao and Tmall are two of China’s most popular online shopping sites. The platforms have grown separately, but they both serve as retail markets for Alibaba Group. Despite operating under one roof serving customers across various industries from clothing retailers to electronics vendors (and everything else), these websites operate differently.
When entering the Chinese market, many foreign brands have a problem with choosing the right platform for their business and often ask us for advice. Therefore, we prepared an article for you to have an easier choice when entering the Chinese e-commerce market.
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Alibaba’s two giant online marketplaces
Many people think both Taobao and Tmall are equal, but this is not really true. Both platforms offer millions of Chinese consumers an online shopping experience, offering a wide range of products, special deals, competitive prices, convenient payment methods, and so on. But those two platform strategies differ, depending on their purpose.
Taobao – The C2C leader in China
Taobao Marketplace is an enormous Chinese online store with millions of sellers and shops from China, operating through a system of C2C (consumer-to-consumer). This system allows individuals and small businesses to sell goods and services directly between themselves. For instance, Taobao acts as an intermediary platform in sales between private people (the seller as an individual and the customer).
Taobao was launched by Alibaba Group in 2003. Alibaba’s Taobao was the first platform of this type in the growing market, which grew to one of the biggest e-commerce platforms in the world. As of 2022, Taobao has more than 846 million active monthly users engaging in online shopping every day.
Taobao Marketplace provides opportunities for individuals to open an online store on its website, as long as potential sellers meet certain requirements. Taobao is a C2C Internet platform that is developing very rapidly. It is an important part of the global web market with an estimated annual turnover of over $ 15 billion.
Therefore, many sellers want to open their own stores on Taobao Marketplace. They all dream of the quick growth of their businesses. Many of them don’t always think of ways to achieve such important goals. Sometimes they can be rather dishonest in their business.
However, this does not mean that buying on Taobao is risky or not reliable. Taobao Marketplace has a special department responsible for searching for suspicious transactions and closing businesses belonging to unscrupulous vendors. Therefore, the risks are pretty much reduced.
Benefits of selling on Taobao
Taobao definitely has the largest base of Chinese consumers from all of the e-commerce platforms available in China. In means, that selling your products through a Taobao store gives you the best visibility.
What is more, Taobao is a low-risk site, as it’s far cheaper than platforms like Tmall or JD. So there is no need to pay expensive fees to list your products on Taobao’s app and start selling to consumers in Mainland China.
Anyone can sell on Taobao, as long as they have a local presence (which is often the reason why foreign companies chose Tmall Global instead). This can be easily done by collaborating with an agency like ours. We offer full solutions to help assist brands and individuals to start their Taobao journey.
Taobao also has a secured payment system and a department responsible for tracking all unsafe transactions through its payment method.
Tmall – a must in terms of B2C in China
Tаоbао Mall (Tmall) – a commercial website based on the Tаоbао platform, running on the B2C system (business-to-consumer). This business model assumes that the seller must be a legal entity – an organization, an official manufacturer, or a trademark – providing their goods and services to final customers – individuals.
Tmall was launched in 2008 as an answer from Alibaba to the demand for a platform with high-quality goods, as opposed to Taobao, that due to its business model, has a problem with fake goods and counterfeiting, offering the cheapest products with lower quality. As of 2022, Tmall has more than 500 million active monthly users.
To open a Tmall store and sell products to Chinese consumers, the legal entity must provide all appropriate documentation to confirm the reliability, authenticity, and real fact of the existence of the organization, company, manufacturer, or brand.
This approach helps to eliminate the potential risk that an unscrupulous seller with questionable quality of products is found to sell his products on Tmall. Tmall platform guarantees that all goods are official and authentic. On the page of each seller, you can see the certificates of quality and compliance.
Nowadays, there are over 70,000 official stores of national and international brands available on Tmall, including Nokia, Maserati, Ray-Ban, P & G, Adidas, GAP, Samsung, and many others. Tmall offers genuine branded products much cheaper than traditional stores.
Benefits of selling on Tmall
Tmall is a platform that many consumers use to buy daily necessities and products from luxury brands because they can be sure that they are buying official products and not fake goods. Therefore, cosmetics, health supplements, food, and mother and baby products are the most popular product categories on the platform, due to the fact that people want to be sure of the quality of those products.
When it comes to those two platforms, selling products on Tmall definitely helps you build credibility for your brand in the Chinese market. But it comes with the price, as setting up a Tmall store is very expensive and it’s not for anyone, as Tmall has an invitation-only policy, where only well-known brands can set up flagship stores on the platform.
The great thing about being a wholesaler on Tmall is that you have complete control over pricing and product descriptions. You can also set up your own brand name to promote it, which gives the buyers more confidence in their purchase!
Lastly, Tmall is a Chinese shopping destination offering a watch list, live streaming, brand pages, and more. Customers can discover new brands, and upcoming trends, and interact with brands daily on Tmall’s news feed.
Tmall Global – Alibaba’s answer to the needs of foreign businesses
As an answer to a growing demand for overseas products, Alibaba Group launched a Tmall sub-platform in 2014, called Tmall Global. It’s a cross-border e-commerce online marketplace, which is an international version of Tmall. Tmall Global enables foreign brands to sell directly without the need for a Chinese business license. Since 2014, Tmall Global grew to become the largest Chinese cross-border B2C platform.
Differences between Taobao and Tmall
When it comes to differences between Taobao and Tmall, they can be divided into; products and services offered, merchants’ profiles, price tags, logistics, and the business model with set-up fees.
Goods and services
When it comes to goods and services offered by those two platforms, you already might have an idea that they are entirely different.
Taobao is a great place to find anything, and it’s no wonder that Alibaba’s Taobao Marketplace has become one of the most popular marketplaces in China. Unlike other sites like Tmall which require higher entry fees or requirements for Chinese brands and startups (which can make them difficult accessible), this app was made with new entrepreneurs in mind – offering lower costs and ease-of-use features such as integrated social media Weitao platform, live-streaming, KOLs and more.
Tmall is the one-stop destination for China’s most trusted brands. It offers only quality goods and services from brands that went through a verification procedure and quality test. So Tmall is just a more luxurious version of Taobao. Taobao is consumer-driven while Tmall is brand-driven.
This we already mentioned, which is the fact that on Taobao, merchants are mostly individuals and small businesses, as the business model of the platform is consumer-to-consumer, as opposite to Tmalls’ business-to-consumer, where merchants are legal entities.
Taobao is more about cheap products and the focus of the platform is mostly price. It means that if you have competitive prices, it’s worth to be listed on Taobao. But it’s very hard to have competitive prices in comparison to small businesses in China, so it might be hard for a foreign brand to be noticed on the platform.
On the other hand, if you want to promote a brand, Tmall is a better option. Customers are looking for quality and are willing to spend extra money if they are assured that the products sold are worth the price. What also works in your favor is the fact that Chinese consumers prefer to buy products from foreign brands if they are looking for quality, as they believe foreign brands have better quality standards.
As most products and merchants are based in China, Taobao shipments are super fast and take from 1 to only few days max. If the products are shipped from overseas, customers are willing to wait, but it needs to be reasonable. Taobao consumers are used to ship deliveries, so it might be hard to win customers if you ship from far.
On Tmall there is a requirement to have an inventory in China, which ensures fast deliveries but might be a problem for foreign companies. Therefore, Alibaba came up with Tmall Global, which offers deliveries from abroad, and customers know that they might need to wait longer than usually for the package.
Account set-up and entry fees
Taobao is a solution for companies that already are in China and want to enter the e-commerce market without a huge investment, because the platform is relatively cheap, and so are the fees. But it’s impossible to sell products on the platform without a legal entity in China, so the only option is to register a company in China.
Tmall allows foreign merchants to sell on the platform, but there are more strict requirements and allocated costs, it’s actually the most expensive platform in China, as it’s more luxurious and exquisite. In addition to listing fees and monthly membership charges, you’ll also be required to pay a deposit when you first set up your store. This deposit is refundable, but it’s still an additional cost that you need to be aware of.
Here are the requirements to sell on Tmall Global as a foreign merchant:
Taobao and Tmall – not competing but complementary
Taobao and Tmall are not competitors. Those biggest e-commerce platforms simply fulfill different consumer needs.
If you want to build your brand and credibility on the Chinese market, Tmall is definitely the best option for you. You can also use Tmalls’ infrastructure and help for foreign brands, there are also much fewer mistakes on Tmall than on Taobao. Therefore, prices are generally higher on Tmall than on Taobao.
Compared to Tmall, Taobao sellers provide a much deeper choice of products, you can find almost everything on it. If your buying decisions are based on a careful review of the rating of the seller, the number of sales, and reviews, then it is possible to buy cheap quality products on Taobao. As a foreign company without the legal presence in China, it’s easier to sell on Tmall though.
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As a foreign brand that doesn’t have a business entity in China, the option will be Tmall. But to be able to sell on Tmall, you need to build your online presence, branding and e-reputation first, as Tmall accepts only known brands on its platform.
We are a China digital agency with more than 10 years of experience. We helped many businesses with Taobao and Tmall strategies. We have experience with those two platforms and we can help you decide the best strategy for you.
We are also a Tmall Partner, which means we are a certified e-commerce company offering global merchants management solutions for their operations in China. We have a know-how of the platforms’ operation and we also know best how to market your brand there.
Here is our offer for Tmall:
If you are interested in other services, leave us a comment or contact us to discuss your options!