China, the biggest market in the world also enjoys the largest e-commerce ecosystem in the world. With a population reaching over 1.4 billion people and 800 million daily active internet users, China is literally a gold mine for E-commerce companies.
And in China, you’ll find plenty of E-commerce platforms… but because we focus on results, let’s have a look at the biggest ones.
1. Tmall or Tmall Global: what’s the difference?
Alibaba Group, founded by Jack Ma, owns around 28% market share of the Chinese e-commerce market with its two giant platforms: Taobao & Tmall. From now on, let’s analyze together how to make money on the second one.
First of all, what is Tmall?
- It’s the biggest B2C platform in China
- It counts 18,000 international brands
- Allows businesses to open an online store
But…
- It requires a business entity located in Mainland China holding a Chinese retail business license
- Products should be located within Mainland China for quick delivery
However, if you can match these basic requirements, as a seller, what can you do on Tmall?
- Manage your own store, and personalized your storefront as you would like to
- Work as a wholesaler while your product will be displayed by Tmall Store resulting in high visibility
In both cases, your products will have to match the quality standard of the marketplace.
Nevertheless, the Alibaba group realized that managing all the processes required for opening a store on Tmall can be somehow difficult for international companies. Therefore, they decided to launch Tmall Global.
Tmall Global is for businesses not domiciled in China. Made for companies to avoid administrative difficulties during business registration, or any issue while setting up a physical shop and warehouse. With this platform, you’ll be able to set up an online store on Alibaba’s group platform, and therefore tap into the very large and profitable Chinese E-commerce ecosystem.
We’ll describe here for you all the processes you’ll need to consider if willing to enter Cross-border E-commerce through this platform.
2. How to sell your products on Tmall Global?
Before you start
To open an official account on Tmall Global, you’ll need to think about some basic requirements:
- A business license from your country
- Relevant qualifications allowing you to take part in overseas trading
- Relevant stock certificate
- You must be a brand owner or an authorized agency
- Having more than 2 years of sales operations and over $10 million turnovers (In theory… In practice, they’re more kind to accept companies with +20 million USD turnover)
- The more popular is your product, the better
You match all the requirements? Very good! It means you’re already a top company, and you can now pretend to get access to the biggest market in the world through one of its top E-commerce platforms. Here’s how to apply for an online store on Tmall Global:
- Submit product information and wait for verification (10 working days)
- Register an Alipay account
- Sign an agreement with Tmall and pay annual service and deposit fees
- Open the store
Sounds easy right? Now, please pay attention to the fees you’ll face when entering the platform:
- Annual fee from $5,000 to $10,000 according to your product category
- Deposit from $8,000 to $25,000 according to your product category (will be used to pay back customers if not satisfied with your delivered product)
- Commission of 3-6% per product sold on the platform
- Online store management & advertisement fees to be negotiated with a Tmall agent
Ready to sell products?
Once you get your application approved by the company, you can start setting up a store. And you’ll get the choice among 4 propositions, which must be aligned with the type of business your company operates:
- Flagship stores (brand owners): you’ll need trademark registration certificate for your brand.
- Flagship stores (Merchants): you’ll need to provide proof of authorization from the brand owners to operate a flagship store on Tmall Global
- Specialty stores: need to be a merchant with documents of brand authorization giving you distribution rights to sell their products without geographical restrictions in China
- Authorized stores: can be open if the merchant has the license to sell brand goods on their store. Authorized stores, also called franchise stores, can sell different products depending on the authorization to sell those brands
How to Drive Traffic on Tmall?
further readings
In terms of products, you can sell almost everything. The range offered on the platform is pretty wild:
Cosmetics, baby food, beauty tools, supplements, baby care, baby clothes, toys, clothes, watches, accessories, jewelry, skincare, lingerie, kitchen utensils, beverages, and household appliances to luxury imported cars (Ferrari, Lamborghini…), expensive wines.
KOL today is the leverage to drives massive sales in China.
KOL for influencers, Key Opinion leader
- KOL on Taobao
- KOL on Weibo
- KOL on Douyin
- KOL on RED
You have a real KOL economy in China that drives traffic to your store.
There will be consumers ready to buy anything you may have to offer.
Having a store and your products ready is a good thing. But you’ll also have to consider how to ship your products. And in that case, for the good reputation of your store, a good logistic plan will be needed. To do so, companies usually choose among two methods:
- Bonded warehouse: export your goods to China in bulk, and store them in a warehouse until there is an order. Your products will then be transported to the customers. It’s usually faster and offers lower costs of delivery. But it will require a higher initial cost, plus inventory.
- Carrier postal service: you ship it directly to customers. But your product will need to pass through customs clearance every time it’s shipped. With this method, you don’t need upfront setup fees but it can be pretty slow in terms of delivery speed with a risk of delay due to customs check.
“Champagne!” It’s payday
As an international company, you’ll be paid through Alipay. That’s why they ask you to register an Alipay account before setting up your store. It’s very easy. It’s like the Chinese Paypal. It links the company’s Alipay merchant account to the company’s bank account, and the fund is sent as soon as it’s requested.
- If you need more advice or maybe some help to open your Tmall account, you can contact us.
- If you need more advice on the Chinese market or maybe more sales doing your E-commerce experience in China, you can contact us.
- And if you’re traveling to China and willing to talk about serious business, you can visit us. Coffee is on us.
Read our Tmall Cross-Border Guide
We have Case studies of Brands that sell Millions on Tmall.
We can share them with you if you are interested.
An email team@marketingtochina.com and we will send it to you.
We are a “Gentle Agency”?
- Digital marketing expert
- Deep knowledge of the Chinese market
- Professional in e-Commerce operations
- Team of 80 persons on your service
- We helped thousands of brands to develop themselves in China
Maybe you’ll be the next one. Feel free to consult our case study for more information.