There is no other word to describe Chinese e-commerce than booming. As a matter of fact, Chinese eCommerce is expected to represent 64% of total retail sales in the country. There are 800 million Chinese online shoppers (as of 2022) and the Chinese eCommerce market is expected to reach 1,556.2 billion dollars in revenue by 2024.
A big chunk of these transactions are happening through the Alibaba Group marketplaces: Tmall (B2C) and Taobao (C2C), as of 2022, the group holds almost 50% of China’s e-commerce market share.
Although competition is rising, Alibaba still is the uncontested leader of the Chinese market, and its local and cross-border version of Tmall is all of the rages with buyers and merchants!
Today we are digging more in-depth into Tmall and more specifically Tmall vs Tmall Global. After this read, you should have a good idea of which of these two Chinese online marketplaces is the right one for your business and what are the main distinctions between Tmall and its cross-border eCommerce counterpart.
China’s e-commerce market
The Chinese market is the biggest e-commerce market in the world, accounting for 1,412.2 billion US dollars in 2022. According to Statista, it is predicted that in 2025 it will grow up to 1,625.8 billion US dollars with an annual growth of 15% in the forecasted period.
Alibaba Group owns almost 50% of the market shares, so now you can get a better idea of how many Chinese customers you can target by entering one of its online marketplaces.
China accounted for over 37% share of the global e-commerce market, in terms of payments value in 2021.
Main trends in the Chinese market to look out for
There are two core pieces of information for companies wanting to sell imported products in China;
- Most Chinese e-commerce nowadays is happening on mobile phones. In fact, according to Statista, The number of mobile shoppers in China grew steadily in the past decade and reached 905 million in 2021. Projections showed that China’s mobile shopping service users will continue to grow to about 1.14 billion by 2023.
- According to China’s Ministry of Commerce, online retail sales in rural village communities increased by 35.3% year-on-year in Q1 2021. This means that companies wanting to sell their products and reach Chinese consumers, need to stop focusing only on first-tier cities and prepare marketing strategies that will have in mind people from all regions of China.
Tmall: the most popular e-commerce platform in Mainland China
Tmall was founded in 2008 as a subsidiary platform of Alibaba’s other online marketplace: Taobao. Tmall is a B2C platform, where Chinese consumers can buy products from local China entities as well as from international merchants. Tmall was launched as an answer to Taobaos’ problem with product quality.
Taobao is a C2C platform, where everyone can sell their products, therefore there are a lot of fakes on the market. Tmall stands out from competitors mainly thanks to strict standards regarding quality, to avoid problems with counterfeits.
Tmall Global: Alibaba’s nod toward international brands
In 2014 the Alibaba Group launched its new cross-border e-commerce sub-platform: Tmall Global. Tmall Global enables foreign businesses to directly sell goods to Chinese online shoppers without needing a Chinese business license.
Tmall Global is the international version of China’s leading online marketplace: Tmall. It is THE most famous and largest Chinese cross-border B2C platform.
Tmall Global, as a cross-border eCommerce platform, allows international merchants to save some time and money by avoiding the legal regulations and difficulties known to international brands that don’t have a physical presence in China yet.
Differences between Tmall and Tmall Global
Although both Tmall and Tmall Global belong to the same mother company, those two giants on Chinese e-commerce market differ in three main aspects; business model, logistics and supply chain and in costs.
Business model differences
Both platforms operate on B2C model, but the main difference is that Tmall operates by requiring its merchants to have a Chinese corporate entity and having products registered under local authorities. Tmall is a good choice for larger Chinese brands with corporate entities in the country, or international companies that are already present and well-set in domestic trade.
On the other hand, foreign brands are eligible to set their owh Tmall Global stores without an actual presence in China. Those companies can store their products in Chinese free trade zones and they don’t need to partner with local authorities to sell products to Chinese shoppers on the platform.
It’s hard to tell the exact costs of both platforms for international merchants, as those costs vary depending on product categories of imported products, logistics costs and so on. You can have a look at our comparison to get an idea of annual service fee of both platforms and all the other costs;
|Security Deposit Requirements||Brand flagship or brand exclusive store: 50,000 RMB or 100,000 RMBMarketplace or individual marketplace flagship store: 100,000 RMB or 150,000 RMB Special categories: Vehicle rental 1,000,000 RMBMost categories are split into three tiers: 50,000 RMB, 100,000 RMB, or 150,000 RMB||Brand flagship or brand exclusive store: 100,000 RMBMarketplace or individual marketplace flagship store: 100,000 RMBSpecial categories: Bird’s nest products: 800,000 RMBMost categories are split into three tiers: 150,000 RMB or 300,000 RMB|
|Sales Commission||Anywhere between 0.5% to 10% of sales, but most fall under the 2%-5% range||Anywhere between 0.5% to 5% of sales, but most fall under the 2%-5% range|
|Annual Technical Service Fee||Two tiers: 30,000 RMB or 60,000 RMB||Two tiers: 30,000 RMB or 60,000 RMB|
|Alipay Fee||1% of sales||1% of sales|
Alibaba found the perfect compromise between the growing demand of Chinese online shoppers to buy quality international goods and the will of overseas businesses to sell directly to the huge Chinese consumers without having to register in China. Since the opening of Tmall Global, More than 29000 foreign companies already opened an online shop on the platform.
Logistics and supply chain
When it comes to Tmall flagship stores, products are usually stored inside Cainiao (Alibaba logistics) warehouses in Mainland China. It’s a good option for bigger brands, as they can sell online to customers and deliver products much faster thanks to Alibaba’s logistics system. There is no need for customs clearance and all the other actions that prolong the delivery process.
International brands wanting to sell on Tmall Global can store their good in bonded warehouses within Chinese free trade zone. They can also be stored in one of the warehouses in Europe, the US, Hong Kong and more, but it will prolong the delivery process, as it requires the products to go through customs clearance.
Although it is easier for merchants to sell on Tmall Global, you need to keep in mind that processing return orders is much more complicated, as sellers need to find a solution for sending products back from China.
Conditions to become a merchant on Tmall Global
- Owning an overseas company entity
- Be the brand owner / have a brand authorization, and provide complete product purchase certificates from the brand side.
Merchants’ requirements to sell on Tmall Global
Businesses must be registered outside of China with trademarks in any country but China. The merchants must be qualified to retail overseas and have good operating conditions. They must also be able to certify that their stock is located outside of China market.
Foreign merchants have 3 different possibilities to open a store on Tmall Global:
- The first possibility for the foreign merchant is to open a Tmall flagship store if they are trademark brands.
- The second one is for merchants who possess authorization from the brand to distribute and sell their products in China; they can then open a specialty Tmall store.
- The third and last option is to open a franchise shop; this is possible for merchants who have brand-licensed goods.
Products Requirements to be sold on Tmall Global
Products must be authentic, and provide origin and Chinese custom certificates. Products also have to be labeled with product information in Chinese. Their delivery should be completed within 5-8 workdays and their returns must be possible in mainland China.
Want to start selling on Tmall/Tmall Global?
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