Tmall and Tmall Global: the “Fast Track into China” for U.S. Retailers
Why U.S. retailers should sell on Tmall and Tmall Global
Companies such as Apple, Nike, Gap, Steve Madden, Costco, and even Amazon have discovered a convenient, easy way to reach Chinese consumers: Tmall and Tmall Global.
They, along with 50,000 other companies and 70,000 brands, operate “storefronts” on the B2C e-commerce marketplaces.
Advertised as the “fast track into China,” by parent company, Alibaba, these marketplaces provide access to China’s 307 million active online buyers, who are avid online shoppers.
Tmall, launched in 2009 and Tmall Global in 2014, account for nearly 60% of the B2C revenue market share in China. Over twenty countries operate storefronts on the sites, including: the U.S., Germany, Korea, Japan, Australia, Taiwan, Hong Kong, and more.
There’s a great market reason to use the Tmall sites: Chinese e-commerce is estimated to grow from $426 billion in 2014 to over $1 trillion by 2018, according to eMarketer. Also by 2018, China will be the world’s biggest e-commerce market, dominating 50% of retail e-commerce sales worldwide, and generating twice the amount of sales as the U.S.
For U.S. retailers looking to expand and reach consumers in China, the Tmall sites have features and benefits that can help their global expansion.
What is Tmall v. Tmall Global?
Tmall Global was opened in 2014 as a solution to encourage additional international retailers to join the site. Though they are similar and operate on identical platforms, there are a number of key differences that help businesses decide which makes the most sense for their needs.
What are the benefits of selling on Tmall and Tmall Global?
There are a number of benefits of selling on Tmall and Tmall Global. They are:
- Customer trust: The Tmall sites are known for selling authentic goods from retailers that are authorized to sell. The Chinese commerce market is known to have problems with counterfeit products, and the Tmall sites offer safe and trusted alternatives for Chinese customers. Greater trust from customers leads to higher conversion rates and long-term customer loyalty.
- AliPay: Tmall sites use Alipay, a secure online payment platform similar to PayPal. The platform is trusted among Chinese consumers. Alipay offers currency conversion so Chinese customers can pay in the Yuan and U.S. retailers are then paid in U.S. dollars. Payment is only released to retailers after customers confirm that they have received their order. Note that the Tmall sites also accept payments in credit and debit cards.
- Daily Sales Analytics: Retailers receive a daily sales report, assisting them with making strategic decisions and with comparing their performance against their competitors.
- Bonded Warehouses: Operated by customs in China, these warehouses can store inventory for Tmall Global retailers, offering them key benefits including
- Faster shipping time to customers when items are ordered, since inventory is already located in China.
- These warehouses are set up in duty-free zones that are dedicated to handling imports and delivery for international merchandise bought online.
- There are lower fees on customs and duties.
- Retailers can directly ship orders to customers, but it is recommended that retailers use bonded warehouses.
- Business autonomy and brand identity: Although businesses are using the Tmall sites to sell, they have autonomy and independence over most aspects of their site from design, operations, fulfillment, logistics, and more. This gives retailers control and allows them to establish their own identities on the Tmall sites.
Steve Madden’s Tmall site is a great example of how the company was able to retain its brand identity:
Types of Stores on Tmall and Tmall Global
There are three types of stores on the Tmall sites, including Flagship, Authorized, and Specialty, each designed for three types of retailers. Businesses opening stores are required to provide different types of documentation verifying that they are authorized to open and operate each store on a Tmall site. The chart below can help retailers determine which type of store best fits their needs.
Other Requirements on Tmall and Tmall Global
There are a number of other requirements to consider when businesses sell on Tmall sites. These include:
- Delivery must start within 72 hours of when the order is placed.
- Products originally produced overseas must be inspected and approved by Tmall.
- Retailers must provide a returns location in China.
- All Tmall sites must be in Chinese. For support with language, as well as marketing, customer service, operations, logistics, fulfillment, and more, there are third party service providers that retailers can partner with. Examples are:
- There are a number of associated fees for retailers using Tmall, including a deposit, an annual feel, commission, and Alipay service fee. Click here to learn more about these fees.
Navigating global retail is challenging, and retailers often face many obstacles such as the ability to communicate in the local language, establishing trust between the business and consumers, and more. Tmall Global and Tmall can help businesses target some of these obstacles and begin selling in the Chinese market.
To learn more about Tmall Global and Tmall, click here.