A small outline providing several key features about China’s biggest online retail platform Alibaba’s Tmall Global.
Outside of China, Alibaba’s has increased its fame by being on the New York Stock Exchange, in China though, people are already well familiar with the platform for they have used it for years. Alibaba’s shopping platforms include Taobao (consumer-to-consumer) and Tmall (business-to-consumer). The two are daily frequented by Chinese consumers that are looking to purchase brands that are not available in brick-and-mortar stores.
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Alibaba created Tmall in 2008, a platform reserved to official brand stores, allowing brands to distribute their goods around China, Tmall now has over 70,000 different brands in 50,000 virtual stores. February 2014, Tmall Global was launched, focusing on big foreign companies that seek entry on the Chinese market. Find the outline on Tmall Global below.
What is Tmall?
Jack Ma’s Alibaba Tmall platform is the leading online retail platform in mainland China, Tmall is a prestigious platform focusing on branded goods. Chinese consumers Pringave their trust to this platform that offers to purchase foreign and domestic branded goods that are otherwise not available in physical stores. In China, having a Tmall virtual store is considered as a business validation. For influent companies that need a strong presence in China without necessarily opening in every city. Tmall is truly the first step to entering the gigantic Chinese market.
Online shopping in China is big
Tmall is part of Taobao, which is the leading sales platform in China. It is intended for the China’s 527 million internet users whether they are using their desktop computers or smartphones. The three platforms created by Alibaba (Taobao, Tmall and Juhuasan) generated a combined a GMV (gross merchandise volume) over $296 billion spent by around 279 million active buyers, and 8.5 million active sellers, this between June 2013 and June 2014. This is even more than eBay and Amazon combined.
On the other hand, mobile ecommerce is also drastically increasing every year, the total mobile shopping market reached $28 billion in the second quarter of 2014, representing 26.8% of total online shopping transactions, this is an increase of nearly 25% from the first quarter. These figures show that using Tmall online platform services is one of the most efficient ways to reach out Chinese consumers in such a massive country.
Main products sold on Tmall
Tmall Global provides retailers with the ability to sell to Chinese consumers through certified warehouses in China free trade zones, this greatly reduces logistics costs and delivery times.
- Clothing, household goods, and accessories have been known to lead the sales, although some more unusual items are getting quite popular among Chinese shoppers.
- Luxury cars such as Lamborghini and Mercedes witnessed a 40% growth annually
- After the food safety scandal in China, demand in baby formula made outside of China rapidly increased.
- American cookies and common US foods
- Wine as China is outperforming traditional wine-buying countries such as France, Brazil and Australia
Furthermore, famous international clothing brands such as Zara, Burberry and Calvin Klein started their entry in China by opening a flagship store on Tmall. Other American brands followed: Apple, Microsoft, Beats, Bose, NBA Nike, Gap, Levi’s, Disney, Anna Sui, New Balance and Estée Lauder.
Benefits of using Tmall Gobal
- Tmall uses Taobao’s infrastructure and Alipay payment system, with which Chinese consumers are very familiar.
- Unlike Taobao, Tmall will only accept verified stores. This ensures that the products sold online are genuine, further increasing consumer trust.
- Taobao promotes Tmall stores over others which generate more traffic
- Tmall has great analytics tools. The daily updated analytics and daily sales reports can help retailers to adapt their strategy accordingly
- The mobile browser company UCWeb was recently brought by Alibaba. Now the new mobile browser version will allow users to log in with a Taobao account. UCWeb browser users can enjoy special treatment such as special offers, Taobao credits and lottery.
Different store formats
- Flagship store, only for registered trademarks (either ® or ™).
- Specialty store, for merchants with brand authorization document providing them with the right to distribute product in China without geographical restrictions.
- Monopolized store, for merchants who own two or more brands within one of Tmall’s product categories. Only one monopolized store may be held by a merchant in one product category.
Store setup process on Tmall Global
Businesses that are willing to benefit from Alibaba’s Tmall online platform must have a corporate entity outside of mainland China. The brand must be registered overseas and be qualified for overseas retailing
- Corporation has been run for over 2 years, annual sales are more than $10 million
- Branded B2C (business-to-consumer) overseas businesses
- Brand owners or authorized agencies
- Favored industries: maternal and child apparel, health care products, clothing, shoes and accessories
- Product with famous brands overseas
Service and product requirements
- Products originally produced and sold overseas have to be inspected by Tmall Global security and will be required to go through Chinese customs inspection process.
- Product pages must use Chinese descriptions, use international units of measurements, and offer a Chinese language customer support.
- Logistics services must start delivery within 72 hours of orders being placed. It may be wise to deliver directly or deliver to Chinese bonded warehouses first, then to Chinese customers. Shipping goods are required to be tracked.
- After-sale services must have locations for handling returns on the Chinese mainland.
Set up steps
- Submit the product information and wait for checking. Takes up to 10 working days.
- Register for an overseas Alipay account. Offline application takes up to 7 working days.
- Sign the agreement and pay the annual service fee and the deposit. 7 to 10 working days
- Open the store. This includes registering an account in Tmall Global.
It is clear that seeking entry on the Chinese market requires to work with the Alibaba’s Tmall platform. Tmall is truly the gateway to the Chinese market as the platform further decreased the delivery time for foreign shipments. Buyers in the past had to wait up to 30 days to receive their order, whereas now the average delivery time went down to 14 days. Previously the Chinese consumers had to understand a bit of English when browsing and ordering foreign products, and they had to have a credit card accepting foreign currency transactions, whereas now everything is eased with the use of Alipay. Opening a store on Tmall Global is the simplest and most cost-effective way to start on the Chinese ecommerce market. Altough, Tmall should not be only considered as a starting point, but as a long-term partnership which will prove to be very relevant as the Chinese ecommerce market and the mobile online sales are drastically increasing year-to-year.