There is no other word to portray Chinese internet business than: blasting.
- In 2019, the Chinese online business increased by more than 27%, reaching $1.935 trillion while the US online business reached $586.92 billion with a 14% growth.
- Alibaba’s sales on the eleventh of November in 2018 reached USD 31 billion, representing a 27% year-on-year growth!
- The offer of Chinese online business is 7.9% significantly more than the American online business that is just 5.7%.
- 800 million shoppers in 2019 according to mckinsey
- There are 400 million Chinese online Shoppers and they are able to create 35 billion yuan worth of exchanges in 24 hours in 2013, on the eleventh of November the internet Shopping celebration in China. The vast majority of these exchanges went to the Alibaba Group sites:
Tmall (B2C) and Taobao (C2C), the Group holds more than 55% market shares on the Chinese e-Market. A 2019-2020 drop that can be explained by the rise of a competitor such as Pinduoduo. Expect a fight from Alibaba.
Chinese internet business without legitimate formality?
In 2015, the Alibaba Group launched its new Platform: Tmall Global that empowers Foreign organizations to straightforwardly pitch products to Chinese online Shoppers. Enabling them to spare some time and cash by staying away from legitimate controls troubles since Foreign Merchants doesn’t need to have a genuine nearness in China.
Tmall Global has become one of the major hubs for international companies to sell globally. By 2019 Q1, it was holding 25% of the market share and has since launched TOF (Tmall Overseas Fullfilement) in order to attract smaller brands. The main competitors are VIP.com, Jd.com, xiaohongshu and Kaola who was the crossborder leader back in 2019, thanks to its “distributor model”.
Entry process in Tmall Global?
- Request entry
Getting in contact with the platform is your first step to your Tmall online store. To file a request, you will have to provide the documents needed as a license to operate your business, the Tmall service contract, a copy of the brand owner’s ID, and a statement of account.
The supply of products’ description documents is also asked in Mandarin.
- Provide proof documents
Some other kinds of documents are also required to show that your products comply with Chinese standards and regulations, that your brand plans a good logistic plan, …
Conditions to wind up a Merchant on Tmall Global
Organizations must be enlisted outside of China with trademarks in any nation yet China. The Merchants must be fit the bill to retail abroad, and have great working conditions. They should likewise have the capacity to ensure that their stock is situated outside of China.
Remote Merchants have 3 distinct conceivable outcomes to open a store on Tmall Global. The primary plausibility for Foreign Merchant is to open a lead store if they are trademark brands. The second one is for Merchants who have approval from the brand to disperse and offer their Products in China; they would then be able to open a forte store. The third and last alternative is to open an establishment Shop; this is workable for Merchants who have mark authorized merchandise.
Products must be bona fide and Provide birthplace and Chinese custom testaments. Products likewise must be named with Product data in Chinese. Their conveyance ought to be finished inside 5-8 workdays and their profits must be conceivable in territory China.
Selling on Tmall Global, at what cost?
When you decide to launch your online store on the Tmall Global platform, you have to pay 4 types of fees that can vary a lot:
- Deposit costs (up to € 25,000)
- Annual service fees (ranging from 5,000 to 10,000 € in general)
- Commission costs (ranging from 1 to 5% depending on the category of your product)
- Payment processing fees (approximately 1%)
You will have to wait for 1 to 2 months to get your store approved. Then you can start to sell!
Different contrasts Tmall VS Tmall Global (Tmall International)
As Tmall in terrain China takes a 2% to 5% commission for each exchange, Tmall Global will apply a 3% to 6% charge on every deal. The charge connected for customer Protection on Tmall Global will be 25,000USD, significantly more costly than the one required for the terrain China Tmallthat is between 30,000rmb to 150,000rmb, however, this expense is connected just once. Concerning the yearly specialized upkeep charge, it will likewise be more costly for abroad Merchants on Tmall Global than for household Merchants on Tmall with 5,000USD or 10,000USD for the first and 30,000rmb to 150,000rmb for the second one.
Alibaba found the ideal compromise between the developing interest of Chinese online Shoppers to purchase quality universal merchandise and the will of abroad organizations to pitch straightforwardly to the tremendous Chinese buyers without registering in China.
For more information, read this article about the difference between Tmall Mainland China and Tmall Global international.
Tmall extra step to lower your acquisition cost
To lead them to this store, they first need a link to get there, but of course, the envy to buy! So market your products on the most popular Chinese platforms to boost your sales.
The most used social network in China with 1 billion daily users. Creating an official account to distribute marketing content is essential for a successful marketing campaign. Creating mini-programs or brochures to introduce new products is also proving to be very effective.
Chinese Twitter with 500 million active users per month. This app also focuses on the visual aspect and is therefore perfect for sharing images. Weibo makes it easy to share a story with a large audience, all quickly.
The new social network that exploded in 2019! Users share short videos and young people love it. Half of its users are under the age of 24. Douyin, therefore, makes it possible to reach a young target through a video campaign likely to be better received than elsewhere.
Tmall Flagship 2020 Features?
Last year Tmall launched a new personalized experience for customers. They called it the Flag Ship store 2.0 offering upgraded tools. Using an algorithm to personalize a consumer’s page based on his previous shoppings, comparing promotions and calculating the best discount prices. Tmall also upgraded brands’ loyalty programs by illustrating in a better way “brand loyalty scores” and in some cases even offering AR, VR or 3D experiences!
Those new features are great news for new products entering the Chinese e-commerce market and also a really relevant tool for brands’ future strategies.
What type of store do you want to open in Tmall Global?
- Flagship store: Only for brands with a registered trademark (® or ™). The owner must be the formal representative of the brand.
- Specialized store: For merchants with documents giving the right to distribute and sell a brand.
Store “monopolized”: For merchants with two or more brands in a Tmall product category.
We can help you to Open your Tmall Store and give you the updated Condition.
Contact us and our Expert Alexandre will explain how it works.