The vast majority of Chinese shoppers shop online. In fact, 91% of internet users in China buy goods and services from the comfort of their homes. It is also one of the fastest-growing eCommerce markets in the world with $453 billion worth of goods sold online in 2018 alone. Tmall Global is a cross-border platform that allows brands to sell directly to Chinese consumers at a low cost without having to open up an entirely new company or warehouse overseas. If you are interested in selling on Tmall Global, this guide will show you how! This blog post will teach you all about how to start selling on small global as well as some helpful tips for launching your products there!
Why do you need to compete in the chinese e-commerce market?
China shoppers purchase more online through diverse digital eco-systems. By March 2020, there were more than 710 million online shoppers. As of 2021, the penetration rate of China’s digital buyers reached 57% which makes China the second-largest e-tailing market after the U.S. In 2020, the mobile payment rate was over 86% among mobile internet users.
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Plus, there is a popular marketplace-focused business model in China. Single-category shopping malls can be easily found in China such as street-style products. Chinese online shoppers go to categorized marketplaces when they search online from Tmall, Taobao, and JD. For instance, there are sections in Tmall categorized as beauty and skincare, baby care, nutrition and healthcare, food and beverage, clothes and bags, etc.
More importantly, compared to e-retailers specializing in overseas products, Chinese buyers trust Chinese cross borders platforms such as Kaola, Suning, or Tmall Global more. In contrast with buying from an individual seller who has no reviews or ratings upon which they can rely for guidance on the authenticity of goods being sold, customers feel much better about purchasing directly through one company’s services rather than dealing with unknown (or known) brands over distance internet connection while also not having access to reliable information.
Making a purchase through a platform such as Tmall Global is not only a safety net for consumers but also a lot more convenient as they have already all their information registered on the app and do not need to go through the process of ID/Adresse checks and can simply pay with Alipay/ payment option is an important point that is not mentioned enough, many retailers that sell to chine only have a credit card option for instance, but credit card is not the norm in China and without offering alternative such as Alipay or WeChat pay, these marketplaces are losing potential customers.
But enough with the intro, you are here, it is to learn more about Tmall & Tmall Global
Tmall vs Tmall Global, which one is right for your brand?
When it comes to making your choice between Tmall & Tmall Global, you need to answers the following questions:
- What are your goals?
- Are you ready to invest in having a legal presence in China or not?
Let’s dig a little more into the two versions of the 2 platforms and see what are their pros and cons and under what conditions you should consider one or the other.
Tmall: China biggest Local eCommerce Platform
Tmall is an online retail platform for B2C (business-to-consumer) products, operated in China by Alibaba Group. Alibaba is a company specializing in e-commerce, retail, Internet, and technology. It owns China’s largest C2C (customer-to-customer) platform, Taobao, and Alipay, China’s largest e-payment platform (54.4%). It owns its cloud computing platform, Aliyun, and AliExpress helping deliver Chinese products to foreign countries.
Read about 5 popular Online Chinese Marketplace
Tmall is the leading China B2C e-commerce retailer with the largest gross merchandise volume (GMV) and had generated about 6.6 trillion yuan transaction volume in 2020. However, only companies that have a physical entity on the Chinese market (and a Chinese business license) can register in Tmall. For other businesses, Tmall’s sub-platform, Tmall Global, is the default option. Users can access Tmall Global via both the Tmall and Taobao mobile apps.
When Brands should you go with Tmall?
Tmall has more traffic and transactions than Tmall Global. If your goal is to enter the Chinese Market at some point, go directly through Tmall. Getting a business license and official entity in the country is not as complicated as it seems and the fees on both Tmall and Tmall Global as well as entry requirements are pretty high. A brand that already has a legal entity in China, should obviously go for Tmall.
Tmall stores require more documents procedures and on-site assets to invest in but can benefit from the fast shipping as 46% of Tmall users prefer express shipping. Returns and shipment will be more complex for Tmall Global stores if you do not have goods stock in China, but less risk considering the investment in a store.
Launched in 2014 by Alibaba, a foreign-business friendly platform -“Tmall Global” allows non-Chinese companies to sell products to Chinese customers without the need for local licenses or permits. Foreign brands can also select their own warehouse and home bank accounts instead of a Chinese bank account when selling on Tmall.
Chinese e-commerce giant Alibaba acquired the second-largest cross-border shopping platform Kaola in 2019. Next year, Alibaba’s Tmall Global is the leading provider of online import shops with a 63.3% market share.
When should brands you go with Tmall Global?
The biggest pro of selling on Tmall Global is obviously to not have to apply for a Chinese business license. Another one being, sellers paying fewer taxes when using cross-border eCommerce in China.
The con? each cross-border consumer is limited to a yearly spending amount (around 3000US$). This means that the consumers base (that is already smaller than with local eCommerce), is also limited in how much it buys on cross-border brands on all platforms combined. If you want to play big, cross-border may not be the right option for you.
However, if you are simply looking to test the waters while not going through the process of registering your company in China, then Tmall Global is the way to go.
Some regulations to products selling on Tmall Global
- Provide certificate of origine of every products
- Product information label in Chinese
- Being able to offer delivery within 72 hours after order was places
- Approval by Tmall and China customs (Chinese product regulations CCC, CIQ)
- Merchant’s foreign license
Open a store on Tmall Global (TMG)
Tmall Global Store is ideal for building brand awareness and introducing new products. Stores can be self-managed or operated by a third-party Tmall Partner.
- Submit product information for Tmall verification and register an international Alipay account
- Choose the store types
Types of Stores Available on Tmall Global
- Franchise Stores(Merchants): Allows merchants to sell brand-licensed goods from a certain brand or multiple sub-brands.
- Flagship Stores(Brands owner): Allows brands holding a trademark certificate certifying their ownership, to be the store owner. For instance, Sephora Tmall Flagship store.
- Specialty Stores: Merchants can sell products with distribution rights authorized brands, and sell goods without geographical restrictions in China.
Or, partner with a Tmall agent and sell your product on their existing Tmall store, and pay the transaction cost per sold goods.
Tmall Global Service and Commission fee
- Security deposit: $25,000. It will be refunded after closing the store.
- Fixed yearly fee: charged based on the product category between $5,000 to $10,000 per year. Pay the highest amount for selling various categories.
- Commission: charged according to order value, and varies from 2% to 4% depends on categories.Commission Fee = XX% x (Product Price + Freight Cost)
- Service fee: charged due to the Alipay processing, 1% service fee.
Sign the agreement with Tmall and launch your store
Except for opening a store on Tmall Global for brand management, the other two business models TOF (Tmall Overseas Fulfillment) and TDI (Tmall Direct Import) can be considered as product-oriented solutions.
Who are Tmall Customers?
The composition of Tmall customers is 50% male and 50% female. They are between the ages of 25 and 34 (34%) and followed by the 35-44 age group (28%).
What products do Chinese consumers tend to purchase on Tmall?
Health, fitness and sports attract Tmall customers. Electronic devices and technology brands interest them as well as 47% of tmall.com customers like to follow up on new technology.
Major Brands on Tmall Global
Increasing brand lists bring more luxury products choices on Tmall such as Alexander Wang, Prada, Cartier, and Isabel Marant. Christina Fontana, the director of fashion and luxury at Alibaba Europe, claimed that Tmall is China’s leading customer engagement platform, from its content curation to its range of brands.
Which Products categories are a good fit for Tmall Global?
As shown in the survey report, Food (55%), Cosmetics (49%), and Shoes, Bags & Fashion (48%) were purchased the most in cross-border-eCommerce during 2017-2018. Chinese customers tend to value foreign brands in health, beauty, and babycare categories with a belief of higher quality(67%).
Why Do Some Brands are both Tmall and Tmall Global?
To maximize the profits and maintain brand images, some larger-scale businesses sell best sellers on Tmall(Tmall Classic, etc) and new or niche products on Tmall Global.
An algorithm personalizes a consumer’s page on Tmall based on previous shopping choices, while also comparing promotions and calculating the best discount prices.
Marketing Strategies on Tmall & Tmall Global
Advertising within the Tmall
Choose the advertising methods according to your budget, paid advertising on Tmall Global can be a pricy option.
- Keyword ads display on the search results page – Zhitongche enables the keyword ad on Tmall. How does it work? Similarly to google ads: When users enter a keyword in Tmall search bar, Ads will be display in the search results page, how high they appear there depends on bidding.
- Super recommendation ads automatically recommend products to users based on their past experience and preference on Tmall. Thus, new brands or similar products can be specifically pushed to specific targets
- Banner ads show up in the most visible place on the top of the home page and are some the priciest types of Tmall Ads but it also reaches to a wider range of customers. Banner Ads can be displayed with pictures, videos, and links to your product page or store.
- Juhuasuan聚划算 is an integrated section displaying on the homepage of Tmall. Provided discount is available with limited-time which attract users to purchase fast, or functions as flash sale linking users to land on the specific product page.
- Tmall “SEO” is significant enough for brand to put ressources in. Tmall “SEO”, is the art of having your products to “rank” high on Tmall search request. To rank higher in product searching you’ll need rich and relevant product description, quality pictures, a good conversion rate, a low product return rate, etc. The more you sell, the more positive reviews you get, the more visibility the Tmall algorithem will give you.
2. Driving external traffic to your Tmall store
Target similar customers or a wide range of viewers through advertising on social media or search engines such as Weibo, Douyin, Baidu to link back to your Tmall store or the product page. Combine the previous techniques with Kols marketing to consolidate your online reputation in China as well as to reach out to new audiances.
Off-site marketing when selling on Tmall or Tmall Global is not only a necessity to acquire more visitors to your store at a lower cost but also to improve your conversion rate. The more positive content available on your brand online, the higher the chances are that visitors will convert with you rather than the competition.
3. Tmall official Campaigns & Shopping Festivals
TIn the Chinese eCommerce world, there are thematical and festivals promotions every month. These shopping events with their goal of encouraging customers’ consumption can be an opportunity for brands to launch specific collections or plan customized marketing campaigns in order to generate more interest among potential buyers during these periods without any major sales happening anywhere else on social media networks where people’s spending habits may change irregularly due to different reasons like dieting patterns that affect credit scores etcetera.
Some of the major festivals are Chinese Lunar New Year, Chinese Valentines Day, Mother’s Day, and Father’s day, etc. Also, special campaigns such as 8th of March(38 Women Festival), 18th of June (618 Promotion), 9th of September (99, Drinks), 11th of November (Double 11, Single), 12th of December (Double 12), etc.
Read more about Chinese Holidays & Shopping Festivals
4. Encourage customers to leave reviews
We rapidly touched on the topic earlier but reviews are key to not only more visibility on Tmall but also to a better conversion rate. Indeed, peer reviews have an important impact on users’ decisions to place an order or not.
Read more about the Importance of Peer Reviews in China
Tmall customers tend to comment on posts more than the average online user. 59% of them find online customer reviews are very helpful which means word-of-mouth, social sharing, and reputation matter.
5. Live streams and live commerce are keys marketing tools in China
Seeing a product used live by trusted influencers is highly appreciated b Chinese consumers. In 2019, the China gross merchandise value of e-commerce live streaming remained 4.5 % of the total online shopping’s GMV. It was predicted to grow to 20.3 % in 2022.
According to Statista, over a third of China’s population used live commerce and one in two of them purchased in 2019.
To Conclude on Tmall Global and Cross-Border eCommerce in China
If you haven’t yet started selling in China, one of the best ways to get a foot in the door is through cross-border eCommerce. Tmall Global is among the most popular Chinese cross-border eCommerce platform and should definitely be regarded as a solid option to start selling without having a legal entity established in China.
Start Selling on Tmall Now with the help of a certified TP
As an experienced certified TMall Partner, GMA can help you register on Tmall global as well as provide you with professional services such as localization, customers services, advertising, and so on. Contact us today so we can discuss how we might be able to work together with your company!