Sell on Tmall in China
What is Tmall?
Tmall, formerly known as Taobao Mall, is the spin off of Taobao and is focused on B2C sales vs. Taobao’s C2C. It is operated by Alibaba, the famous Chinese internet giant and was designed as a platform to sell authentic branded goods to consumers in Mainland China, Taiwan, Hong Kong and Macau. Tmall.com currently features more than 70,000 international and Chinese brands from more than 50,000 merchants and serves more than 180 million buyers. It holds about 50% of the entire B2C ecommerce market with its closest rival, Jingdong.com, with about 18% market share.
Tmall is being positioned for tier 1 and 2 cities, while Taobao covers traditionally less affluent lower tier cities.
It will be a sound strategy for your Chinese market.
Who is qualified to open onTmall?
Tmall requires you to be a certified retailer or a trading company and the products should be under your own brand or licensed to you. Also, Tmall has a preference to retailers who have been in business for at least 2 years with the annual turnover of at least 20 million dollars. Of course, if you are a well known international retailer, it would be fairly easy to get approved.
There are a few additionalsales conditions to be entitled to open via Tmall
- There must be a business entity located in Mainland China holding a Chinese retail business license
- Product should also be located within Mainland China to quickly fulfill and ship orders when placed
- com’s rules stipulate that an order must be shipped and traceable within 72 hours of order placement
- Buyers have the option to return the product for a refund, no questions asked, within 7 days of receiving the product
What’s the cost?
- Setup costs include store design at somewhere between RMB6,000 to RMB20,000
- Annual fee, aka technical service fee, varies according to product category is set to either RMB30,000 or RMB60,000
- Tmall requires a deposit which can be set at RMB50,000, RMB100,000 or RMB150,000 based on the chosen store format and the trademark status
- Ongoing costs include 5% commission fee on every transaction as well as optional marketing services
What are the downsides?
Tmall could suffers from the perception that it’s just another offshoot of Taobao which focuses on low prices and discounts. Some companies are concerned about their reputation being damaged if they become associated with the platform.
The return policy also could be a concern. Burberry suffers constant product return after launching on Tmall.
Tmall Global is coming soon….
Tmall Global (www.tmall.hk) is a solution that enables companies based beyond China’s borders to directly advertise and sell to millions of Chinese consumers. Overseas companies without China business licenses are eligible to apply to Tmall Global, it offers an interesting alternative to companies wanting to give the Chinese online marketa try. Alibaba is also working on ways to make it easier for shoppers to find Tmall Global merchants and their products.
- Tmall can be an effective sales and marketing channel for fast moving goods, such as fashion items and apparel
- It may not be suitable for companies that want to maintain full control of their brand development and those who seek to project exclusivity, such as luxury goods for instance
- Tmall Global offers an interesting alternative to companies wanting to give the Chinese online market a try which deserve your attention