Alibaba’s shopping platforms such as Taobao (C2C) and Tmall (B2C) are used by Chinese consumers looking for ways to reach brands that may not be available to them in traditional stores.
In 2008, Alibaba created Tmall, as a platform exclusively reserved for official brands, enabling them to distribute their products to all four corners of China.
Tmall now has more than 70,000 brands in 50,000 stores.
The goal of Tmall Global was to encourage major foreign brands to enter the Chinese e-commerce market.
WHAT IS TMALL?
One way to watch Tmall is to consider it as an online version of Manhattan’s 5th Avenue : a prestigious address focused on branded products.
Tmall, one of the platforms of Alibaba, is leading the online sales in China.
Tmall is recognized as a prestigious platform that offers its services only to branded products. Chinese customers have placed their confidence in it because it offers the purchase of foreign and domestic products that are often not available in store. In China, it is important or even essential to have a virtual online store on Tmall.
For world-renowned companies looking for an increased presence in China without opening a shop in every city, Tmall is truly a springboard.
Tmall Global is positioning itself to target high-end consumers in China and invites investments from foreign companies.
ONLINE PURCHASES IN CHINA !
Tmall is part of Taobao, which is China’s number one online sales platform with 527 million Internet users in China.
It is not only the Internet population of China that is enormous, but also its geographical size : it measures 9.6 million km2, twice the size of Western Europe and three times the size of ‘India.
Tmall increased in just three years from $ 8 million in 2009 to $ 153 million ($ 136 million) in 2010 and $ 549 million ( 488 million d’€) in 2011.
In 2012 the total volume of transactions of Taobao and Tmall reached 160 billion dollars or 143 billion euros, which is higher than the combined annual transactions of eBay and Amazon that same year.
The total transaction value of the online clothing market in China exceeded $ 71 billion in 2013 (€ 63 billion), with an annual increase of 42.8%, which accounted for 23.1% The entire online shopping market of China.
The three online retail markets of Alibaba, Taobao, Tmall and Juhuasuan, generated:
- A combined $ 296 billion, or 264 billion euros
- 279 million active buyers
- 8.5 million sellers active in 2014
EXPORT TO CHINA !
Transactions generated by Chinese B2C retailers online reached $ 47 billion, or 42 billion €, or 40.4% of total online shopping online transactions in the second quarter of 2014.
Total transactions in the Chinese mobile shopping market reached $ 28 billion (25 billion d’€) in the second quarter of 2014, representing 26.8% of total online transactions over the same period in China, An increase of 24.6% compared to the first quarter.
Tmall launched a standalone iPhone app at the end of April and has already received 1855 reviews with an average rating of 4.5 stars. There are currently Android and iPad versions in the works.
The use of Tmall is a way of knowing how brands (for exporting to China) can effectively reach consumers in such a vast country. See also export article in China on the CCI
WHAT IS SOLD ON TMALL?
Tmall Global offers resellers access to Chinese customers through certified warehouses in China’s free trade area, which lowers logistics costs and reduces delivery times.
While clothing, household items and accessories pave the way, some more unusual items are becoming more and more popular with buyers.
Luxury imported cars like Lamborghini and Mercedes have grown by 400% per year.
As a result of a food safety scandal, there was an increased demand for baby products manufactured outside mainland China.
US biscuits and other US conventional products sold have resulted in an increase in pre-orders for previously unavailable foods.
To export to China tmall would be a solution. China is becoming the biggest online market for wine, going back to worldwide online sales before more traditional wine buying countries like Brazil, U.K. And France.
The Chinese online clothing market has seen international brands like Zara, Burberry and Cavin Klein start their entry into China by opening their main online store
Nike, Gap, Levi’s, Disney, Anna Sui, New Balance and Estee Lauder have officially launched their flagship store in Tmall.
EXPORT TO CHINA FOR COSTCO
The last American brand that became known is the warehouse club belonging to the membership, Costco Wholesale.
They launched a major online store on Tmall that reached Chinese consumers directly with food and health care products at competitive prices, ranging from clothing to grocery stores, laundry detergent and health and beauty aids .
Costco Wholesale sold 3 tons of Kirkland nuts and about 1.5 tons of dried cranberries over the first three days on Tmall Global.
THE ADVANTAGES OF BEING ON TMALL GLOBAL?
- Tmall uses the Taobao infrastructure and the Alipay payment system, so that Chinese users are familiar with all the services and trust the mechanism they have been using for years.
- Unlike Taobao, Tmall only accepts official stores, which ensures the authenticity of products sold online, which ultimately loyal customers
- Taobao promotes Tmall, and promotes it compared to all other platforms, which generates traffic to Tmall.
- Tmall has powerful analytical tools. Analyzes and sales reports are updated on a daily basis, allowing the vendor to adjust its strategy if necessary.
- The mobile internet browser company UCWeb has recently been bought out by Alibaba. Now the new version of the browser integrates the possibility for customers to connect with a Taobao account. UCWeb users will benefit from preferential treatment, ie special offers, Taobao credits and a lottery system.
Tmall Global is a direct way to reach consumers who live far from these level 1 cities where foreign brands generally establish a physical presence by entering the Chinese market.
DIFFERENT CATEGORIES OF SHOPS TMALL :
Tmall has three different store categories :
- Only trademarks with a registered trademark (either ® or ™) can open a flagship store. The owner of the store must be a formal representative of the trademark or hold exclusive authorization documents for the establishment of a flagship store Tmall provided by the official representative of the trademark.
- Merchants with brand authorization documents that give them distribution rights to sell products without geographic restrictions in Mainland China are eligible to open a specialty store.
- Merchants with two or more brands in one of the Tmall product categories may open a “Monopolized” store. Only one “monopolized” store can be held by merchant in a product category.
EXPORT TO CHINA VIA TMALL
STEPS TO CREATE A VIRTUAL SHOP ON TMALL
Companies that intend to set up on Tmall must possess a corporate entity outside mainland China. The trademark must be registered abroad and have qualifications for retail sales abroad. They must also have good credit and an operational performance abroad.
The basic requirements for configuring Tmall are :
- A legal person outside Mainland China
- Qualifications for foreign retail sales
- Ownership of the authorized brand / agency / vouchers
The preference criteria :
- The company has more than 2 years of exercise, with an annual sales exceeding $ 10 million.
- Brands of B2C (professional to private) with an international market
Ownership or Authorized Agencies
- Favorable sectors: Pregnant and baby clothing, care products, clothing, footwear and accessories.
- Products of internationally renowned brands
Product and service requirements include :
- Products from a foreign country and sold internationally must be inspected by Tmall Global Security and will obviously pass through the Chinese Customs Stage.-
- The presentation page of the product must be in Chinese, use the international measurement system and size, and finally offer a customer service in Chinese.-
- Logistics must ship the product within 72 hours of ordering online. It is often preferable to choose direct delivery, or delivery through certified warehouses in China, and finally to consumers. Order tracking for all products is mandatory.–
- After-sales service must have premises in China to handle returns.
In general, the costs of Tmall can be divided into three categories.
Fees and expenses include :
- Deposit: This is for consumer reimbursement after a Tmall store has broken the “Taobao Mall Service Agreement” and has sold counterfeit products. The required deposit is between 7159 € and 22368 € according to the chosen store format and the status of the brand.-
- Annual service fee: this fee varies according to the product category and ranges between € 4474 and € 8949.-
- The merchant has the option to purchase half or full service fees if they meet Tmall’s predefined sales targets for the product sold.
- Sales commission: for each transaction carried out, Tmall retains 5% of the sales value in commission.
These are only costs and basic fees. There are other product categories and sub-categories that will require more in-depth planning to accurately assess the full costs.
The installation process :
Submit product information and wait for verification. This lasts up to 10 working days.
Register an Alipay account abroad. To apply offline, it takes about seven to ten business days.
Sign the agreement and pay the annual service fee and deposit. This lasts about seven to ten working days.
Open the magazine. This includes registering an account in Tmall Global, performing a test, completing the necessary information, adding products and finally launching the store.
To export to China, there are many prospects for companies overseas who are continuing their entry into the Chinese market, as the demand for high quality products is increasing all the time.
Tmall Global largely simplifies the process for the Chinese to buy products overseas.
Delivery outside Canada may take up to 30 days or more, while Tmall Global products are warranted within 14 days.
Establishing an online store via a market such as Tmall Global is the simplest and most cost-effective way to start online sales in China.
Tmall should not be seen as a temporary addition but rather as a long-term channel that requires a strategic approach to meet consumer demand and create a successful and long-term brand presence in China.
It provides an additional sales channel for brands that want to target consumers outside the cities where they have a physical presence.