TMALL is China’s largest B2C online marketplace. It has more than 70,000 online Chinese and international branded stores. In 2008, Taobao, Alibaba’s C2C marketplace, introduced TMALL as a platform for official brand stores. Seeing the popularity and increased interest of international stores, in 2013 TMALL Global was introduced for international brands, to sell imported products. TMALL made less profit than Taobao, in the second quarter of 2015, the gross merchandise volume (GMV) of TMALL was 37% whereas Taobao stood at 63%. Online Customer experience of Alibaba’s e-commerce platform is more or less similar to other international online marketplaces.
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Market share of TMALL
TMALL captures 50 to 60 percent of China’s B2C market share, whereas its competitor, JD.com has 18% of total market share. China boasts the biggest e-commerce platform in the world. Together, TMALL and Taobao have 95% of China’s e-commerce market share.
Users of TMALL
The Alibaba group has a substantial number of users across its two retail platforms. At the end of 2015, it was estimated that the group has 407m annual active buyers. TMALL alone has around 375m users.
Sales Figures OF TMALL
In 2015, gross merchandise volume was $123bn worth, of products sold. The chart below shows GMV up to end of June 2015, with Taobao and TMALL separately.
Looking at figures up to March 2016, the full financial year of 2015 saw TMALL spawn GMV of ¥1,141bn, which equates to US$123bn in products sold.
The overall annual revenue of Taobao and TMALL combined was ¥76.2bn for 2015, which raised from ¥52.5bn in 2014. An overview is shown below:
Brands on TMALL
TMALL embraces over 70,000 brands in 50,000 online stores. Names of some popular brands are as follows:
- New Balance
- La Chapelle
Payment method used on TMALL
Alipay is the preferred method of paying on Alibaba’s payment platform, it is also considered the more safe mode of paying than credit and debit cards. Merchant charge 1% profit on all payments. Similarly, as PayPal Alipay is trusted and perceives as a more trustworthy method of paying. Third-party payment systems are also quite popular in China. People are very comfortable using Alipay and WeChat’s WePay payment methods.
Delivery of products ordered via TMALL
TMALL delivery time takes around one to two days within China and TMALL Global is known to take somewhere up to two weeks.
In 2015, TMALL introduced a pre-pay option for duty-free customers in Thailand and South Korea. This method suited more to middle-class Chinese customers that often travel abroad. This system allowed customers to place an order in advance and collect the products from the retailer’s shop without going through the tiring and inconvenient checkout process. This method also provided TMALL a competitive edge, where it not only provides its customer general commodities but also takes care of convenience factor and shopping experience.
TMALL also owns a supermarket, known as Chaos. It offers same-day delivery if orders are placed before 11 am.
TMALL Global is a “question mark” in Boston Consultancy Group, growth matrix. It is growing rapidly and capitalizing on demand for imported products and foreign brands. It is expected to become “cash cow” in long run by attracting many foreign brands to do business in China.
Since the platform operates on an invitation-only policy, many merchants have to take entry in the TMALL arena through a certified third-party. This can be achieved with the help of local digital marketing agencies that not only gives entry to foreign brands but also help in generating leads in the e-marketplace.
TMALL takes between 0.5% to 5% commission on sales. Retailers can sell via connected warehouses in China and free trade zones, which shortens delivery time. Clothing, household items, and accessories are more popular products among Chinese customers. Merchants need to follow label their products in Chinese and provide Chinese-language customer support. The advantage of promoting products using TMALL Global can range from greater brand awareness and improved infrastructure and logistics.
Successful international brand stores at TMALL
- Foreign baby milk products gained incredible success, after the baby milk scandal in 2008.
- Luxury cars are very popular among the Chinese upper class e.g. Mercedes.
- Classic American foods, Costco nuts gained incredible popularity in 2015, it generated sales of $3.5m in the first hour of Singles Day.
- With the changing trend, the wine has become very popular among Chinese consumers.
The biggest advantage of TMALL Global for Western companies is to sell directly to China mass market, in correlation with cross-border e-commerce without setting a local Chinese entity. Although TMALL.com does require a Chinese presence. Due to the invitation-only policy, it is necessary to work with a local Digital Marketing agency which can apply for an online store on a digital platform and manage a store according to local market demand.
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