Find Success for Your Brand in China with Tmall

What is Tmall?

Tmall is an e-commerce platform launched in 2008 and is part of Alibaba Group. It is a business-to-consumer platform (B2C), positioned as the destination for quality, brand-name goods, to satisfy increasingly sophisticated Chinese consumers. In 2019, tmall.com was the 3rd most used online platform in China after Taobao (C2C) and JD (B2C). The platform thus drives a lot of traffic and saw more than 30 million visitors on average per month in the first half of 2020. 

There are 2 ways to join Tmall which depend on your current business operations. There are Tmall global, for companies with an overseas license, and Tmall local, for companies that already operate in China. This means that you can open a Tmall store without having a retail presence in the Chinese market, a great advantage knowing the heavy administrative procedures to open a brick-and-mortar store in China.

Who are Tmall customers?

They are both male (51%) and female (49%), mainly between 25 and 34 years old, usually living in a household of 3 people. Tmall customers are almost evenly split across income demographics and 86% of them come from urban communities. More precisely, 45% of Tmall customers live in megacities with 5+ million inhabitants. They tend to be younger and with a growing appetite for international brands. It is interesting to notice that less than half of Tmall customers (45%) make prior research on the internet before making a purchase. 

Who are the main competitors of Tmall on the Chinese market? 

• JD, a leading Chinese e-commerce platform with 387+ million active users. It started as an electronic retailer and diversified from 2008 onward 
• Secoo, China’s largest luxury retailer. Positioned as a high-end retailer, the platform carries 3,800+ domestic and global brands
• Pinduoduo, a Chinese e-commerce app that gamified shopping using deep discounts and social media engagement marketing

Tmall is one of the best platforms for mid to high-end brands because it faces the lowest bounce rate, it generates a high level of traffic (47.55 million active users in May 2020) and enables a customised layout of the store, respecting brand guidelines and customer experience. 

Why should you be present on Tmall? 

Thanks to its large Chinese customer base, Tmall enables Western brands to acquire visibility and generate significant sales on the Chinese market without having to operate a brick-and-mortar retail store. Additionally, Chinese customers who become familiar with the brand are likely to be looking for it when visiting western countries and thus also push sales outside China in the long-term.

How to operate a store on Tmall? 

Due to the complexity of the platform and the regular updates, a brand needs to operate its store through a Tmall Partner (TP). TPs are 3rd party service providers certified by Tmall for their qualification in business operation and IT. They are online distributors and provide support in daily store operations such as warehouse coordination, IT support, reporting support, platform operation, marketing, merchandising, visual design, and customer service. They are usually specialised in certain product categories (e.g. fashion, furniture, etc). TPs take care of all product-related activities including customer service, shipment, return, and exchange. They are also in charge of all the marketing initiatives both onsite and offsite, from product shooting to Chinese social media marketing with KOLs, SEO, re-targeting using lookalike audience, etc. Note that Tmall operates its own marketing calendar with 2 key dates: 11/11 which is “single” day in China and the mid-year sale which always happens in June. These two key dates enable brands to get rid of leftover stocks before new collections are released. 

TPs partner have a good knowledge of the Chinese market and operations. They also have expertise in cross-border operational execution in China and are thus very helpful. Moreover, as TPs are working for several brands, they already have the data on best-selling categories and products and will help you to create the ideal assortment and pricing strategy. By monitoring and assessing your online store, TPs can make recommendations on product assortment to boost sales according to the preferences of Tmall customers and local festivities. Note that there are no restrictions on the assortment by Tmall. 

Costs

Tmall charges a security deposit, annual technical service fee, 1% commission for Alipay which handles the payment, and commissions on sales which vary depending on the product category. You need to add to these costs the fixed and variable costs that TPs and the marketing investment.

The costs of the TP will vary based on their experience, and of course on your brand. Companies should always aim to negotiate low fixed costs and higher commissions on sales, especially if the brad is unknown in China. 

As the Chinese market is very digitalised, it is important to complete the retail strategy with a good digital marketing strategy. Check out our latest article on Social Media Marketing in China to learn more about the key platforms and techniques to master your marketing strategy for the Chinese market. 

We hope this article was helpful.  Our team can help you to source and select the best TP to develop your store! Get in touch today via pr@texereadvisors.com