With an increasing purchasing power and digitalization of society, China’s eCommerce market has naturally been growing exponentially while embracing new technologies and innovations. A big part of this innovative culture can be explained by the competitiveness of the market as well as a demanding consumer base. Today we are taking a deeper look into Alibaba’s Tmall aka China’s biggest eCommerce platform in terms of revenue (as of 2021). Hopefully, this guide will help you understand better the importance of Tmall in the market, as well as the best eCommerce practices to succeed on the App and in China.
- 1 What is Tmall?
- 2 E-commerce in China
- 3 How to sell your goods on Tmall?
- 4 Increase Tmall ROI
- 5 Contact us to get started on Tmall
What is Tmall?
Founded in 2008 under the famous Alibaba group, Tmall (天猫), is a subsidiary of the e-commerce website Taobao (淘宝网). Its target market is primarily B2C (Business-To-Consumer). Tmall’s concept is ambitious and wise as it allows both local Chinese and international companies to sell their products through the platform in mainland China, Hong Kong, Macau, and Taiwan. Tmall stands out from its competitor’s thanks to its strict standards in terms of quality and renown.
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If we look at the ranking of top Chinese websites based on traffic volume, it is clear that Tmall leads the way, even compared to the most popular search engine in China, Baidu. In terms of time, Chinese consumers are spending on average 7 minutes per day on the app, which is more than twice the time spent on JD.com.
Tmall: The Most Popular Chinese E-commerce Website
Over the years, Tmall was able to grab the majority of china’s e-commerce market shares, establishing itself as the most popular Chinese e-commerce website and becoming the best online gateway for local and international retailers.
As of 2021 Q1, Tmall accounted for around 50.8% of all transactions on B2C platforms, far ahead of the 2nd e-commerce platform JD.com with 15.9% of the transaction share and Pinduoduo with about 13%.
Why does Tmall matter for businesses?
It is estimated that more than 780 million consumers in China have purchased at least once through Tmall, thus, explaining why a growing number of international brands are joining Tmall Global. Even if you are not quite familiar with Tmall, you have probably already heard of it these last few years, during big sales events. Tmall is indeed famous for its multiple sales record such as the 11.11, which can generate 74.10 billion dollars within 24 hours!
Over the years, Tmall’s gross merchandise volume increased from 847 billion yuan to 3 202 billion yuan in 2020 (more than 3 times higher)!
Single’s Day: The Biggest Commercial Event
Known as the “Single’s Day”, or 11.11 (双11) this 24 hours-event has become the largest physical retail and online shopping day in the world. It is the biggest sales event for e-commerce platforms such as Tmall, JD.com, and Taobao. This event is now nearly four times the size of America’s biggest shopping days, Black Friday and Cyber Monday. Thus, if you want to do business in China, you will have to focus particularly on this big day, in terms of communication and marketing, but also in terms of advertising.
Read more about Important date for eCommerce in China
Tmall: A Powerful Platform for Luxury Brands
For international companies, Tmall can be a useful e-commerce platform to help increase their sales as well as to promote their brand. Luxury brands not only have access to Tmall and Tmall Global but also to Tmall Luxury Pavilion. This pavilion is an “app within an app” that enables top selected clients to get access to the most premium and luxury brands with dedicated flagship stores. They also benefit from a unique user experience such AI and AR, which can be a determining factor to attract consumers and make them spend more time on your web page.
Is Tmall necessary to sell goods in China?
You have to know that Tmall is indeed the most popular e-commerce website in China, but not the only one! There are plenty of e-commerce websites that can be more suitable for your company, in terms of marketing strategies, but mostly in terms of price. As the leader in the Chinese market, selling products on Tmall can be quite expensive, and even unaffordable for many smaller companies. However, if your company/brands have the resources to start directly on Tmall, we strongly suggest you do it. With work on your store, on-site, and off-site marketing, your journey will be rewarding.
E-commerce in China
If you are interested in expanding your activities in China, you probably already know that e-commerce is the quintessence of business. To export and sell your goods in China, it is undeniable that you will probably want to open a store on leading e-commerce platforms such as Tmall, which attracts every minute thousand consumers. Nonetheless, platforms like JD.com and Tmall only accept high-quality products and brands that already have a good reputation in China. Given all these conditions, it can be difficult to know which platform suits a company’s needs in terms of sales, audience, marketing, and even advertising. Before getting started, running a market survey is a great idea. It helps with understanding the potential of your product in China, defined a pricing& marketing strategy.
Read our eCommerce in China Guide
China eCommerce: An ever Growing Market
With a shift toward new technologies and internet-related tools, the Chinese population is one of the most connected in the world, from purchasing products on the internet to paying for their cab. Thus, it is no surprise that e-commerce platforms were increasingly able to attract Chinese consumers that don’t want to spend time on brick-and-mortar stores.
As seen on the above graphic, the number of online shoppers in China keeps increasing, reaching more than 782 million online shoppers in 2020, following the Covid-19 pandemic. As a matter of fact, with the Covid pandemic, consumers have shifted from offline to online purchases on e-commerce platforms. Moreover, in order to alleviate the tough competition, many brands are sending e-vouchers to their followers through social media, which attracts even more Chinese consumers.
Some of the factors contributing to the e-commerce growth are increased internet penetration, and always increasing spending power, but also the expansion of the e-commerce giant Alibaba Group.
How to sell your goods on Tmall?
In China, the possibility to open a shop on e-commerce websites does not only depend on your motivation, but mostly on how your brand appears and the potential, it will have on its platform. If you want to get the opportunity of selling your products on one of the most consulted e-commerce websites in the world, you will need to show what you have to offer, and convince Tmall you have the potential to attract Chinese consumers’ interest.
What company can apply to register on Tmall?
To register your company on Tmall, you have to know that Tmall requires its merchants to have official Chinese documents as well as to have your products registered with the local authorities. This is the reason why most of the foreign brands you’ll see on Tmall tend to be international and F500 brands that already have an entity in China (We can help you register your company in China and get licence for your products categories!).
Learn more on Tmall Registration Process: How can brands register on Tmall?
Tmall Registration and running fees:
If you want to sell your goods on Tmall, be aware that the fees are quite high (although, in most case and with the right strategy it is totally worth it)
• A Tmall Flagship store cost between 50,000 RMB and 100,000 RMB
• Marketplace: between 100,000 RMB and 150,000 RMB
• In terms of technical services, you will have to pay between 30,000 RMB and 60,000 RMB per year
• Sales commission for Tmall can represent 0.5% to 10% of sales (although most of the time it will be around 2% and 5%).
• Finally, as a subsidiary of Alibaba, Chinese consumers are purchasing with Alipay, so it will represent 1% of your sales.
Increase Tmall ROI
Although Tmall is the biggest Chinese eCommerce platform in the world, it won’t magically create money. You’ll have to work hard to get those sales and be more visible than your competitors. Once you’ve managed to open your store you’ll have to think about traffic acquisition and conversion. The good news is the more you sell, the more visibility you get and the higher your conversion rate gets. The hard part is to get initial traffic and sales but there are solutions for that.
The importance of e-reputation
Driving traffic to your store won’t be the issue, but getting those first sales can be tricky. In order to do so, you’ll have to work on your online presence and reputation. Indeed, Chinese consumers are extremely suspicious of products and brands that they have never heard of before. They will most of the time rely on other user’s experiences, recommendations, looking at reviews. Word-of-mouth is actually one of the best ways to attracts new customers, and this why your brand e-reputation is essential when it comes to entering the Chinese market. You will also have to be careful when it comes to consumers’ feedback on your products, as it will influence potential consumers and even e-commerce platforms such as Tmall. Get a few hundred sales, encourage your customers to let reviews and you’ll be set for success.
- Social Media: Wechat, Red, Weibo, Douyin, Kuaishou… there are plenty you can join. They are great to build a following and improve customer loyalty. They allow you to interact directly with your target audience and run paid advertising for traffic acquisition and even get customers’ detailed reviews (red). Some of them also tend to rank quite high on Baidu which is great for credibility.
- Kols & Influencers: They are well trusted and highly influential. There are many ways you can collaborate with Kols offering you some flexibility in the way you wished to promote your brand.
- PR, forums, and Q&A: The best way to build brand credibility. Thirds party recommending your brand will always be more effective to increase conversion than official brand communication. Just like social media posts, they rank high on Baidu.
Advertising on Tmall
Advertising in China requires a different approach from what we are accustomed to, especially on Chinese e-commerce platforms such as Tmall. However, some tools of advertising are quite similar to ours.
Depending on your budget and reputation, you will be able to display your products on Tmall’s homepage, and even advertise your brand on a banner ad, as you can see on this ad for the French company Sisley. If you want to have more pieces of information about advertising on Tmall, feel free to contact us.
Contact us to get started on Tmall
The Chinese market is one of the most promising in the world in terms of opportunities, both for smaller companies like startups, but also for larger international companies. However, in order to succeed, you will need to local e-commerce websites, such as Tmall, the leader in e-commerce in China. To do so, you will need to do a lot of research beforehand as well as be prepared to complete quite a long procedure in order to sell your goods on the platform. That’s why working with specialists in the Chinese market can be the key to success.
Working with an agency which has both the western and Chinese point of view like Gentlemen Marketing Agency can help you overcome the pitfalls of the Chinese market. Our agency has accompanied many companies entering the Chinese market through Tmall. Proud of the success of the companies that contacted us, our experts are ready to help any company willing to do business in China. So, if you are interested in doing business in China, do not hesitate to contact us and we will reply within 24 hours.