Sell on Tmall or JD
Enter the Chinese market through e-commerce marketing
Sell on Tmall or JD
Tmall and Tmall Global?
According to Tmall’s official website, there are two ways to join Tmall:
- Companies with business operations located in China can apply to on Tmall
- Companies with overseas licenses are eligible for Tmall Global
Tmall Global provides an opportunity to tap into the Chinese e-commerce ecosystem for international companies with no physical business in mainland China. A Tmall Global store for market testing can be opened at first. After around two years of testing and analysis on Tmall Global, Tmall is the next destination for new international brands; the latter caters to more mainstream consumer’s needs.
Which countries do Chinese consumers prefer to buy from?
Japan, South Korea, and the United States have always been the top 3 countries whose brands are most favored by Tmall Global consumers from 2015 to 2018. Australia, France, Germany, the United Kingdom, Spain, Italy, and Thailand among the top 10.
Different countries feature different top selling products:
Below are some examples of brands entering in the Chinese market via Tmall Global and Tmall:
Tmall Global
- Brand A is eager to expand into the China market but reluctant to take on local inventory risk. Tmall Global allows brand A to enter the China market while removing this risk.
- Brand B has noticed a recent increase in overseas purchase demand for their product. Tmall Global offers brand B the opportunity to reach these consumers who are interested in imported high quality products.
- Brand C had previously thought selling finished food products directly to the China market is impossible. Tmall Global enables brand C to bring their locally top selling products to Chinese consumers.
Tmall
- Brand D has been selling offline in China for 5 years and has already built up a target consumer base. Brand D will soon open a Tmall.com store to introduce their product to a broader spectrum of audiences.
- Brand E has been manufacturing products in China for foreign markets and would now like to try selling their branded toys to the Chinese domestic market. Brand E would open a Tmall store and utilize their local inventory for fulfillment.
- Brand F is looking to break into China’s market. They have a multipronged approach to open physical stores in mainland China whilst reaching consumers online. With their China branch office in place, brand F is well-positioned to increase its online presence with Tmall.com.
What is a brand flagship store?
Different types of stores can be operated on Tmall and Tmall Global. For international brands and retailers, the most important and relevant one is the Tmall or Tmall Global brand flagship store. You can consider a brand flagship store as a web shop, only it is hosted by the marketplace Tmall or Tmall Global.
If you are an international retailer without a Chinese legal entity, you can still operate a Tmall Global Flagship Store to sell directly to the Chinese consumers.
The official definition of Tmall Global Brand Flagship store is: Stores operated by brand owners or exclusive dealers directly authorized by trademark holders on Tmall Global. In principle, the brand flagship store can only sell goods under the corresponding brand. If the store brand is a group brand, it can sell goods under multiple brands of the group. The goods must directly come from the store brand trademark holder.
Steps to launch a flagship store on Tmall
- Submit the qualification of store opening enterprises
- Step-by-step process
- Joining application
- Application review
- Store information supplement
- Going live
The store opening process will not take long. However, there are a lot of preparation that needs to be done. For example, defining a go-to-market strategy, (assortment, pricing, sales channels, marketing strategy…) find qualified partners, and etc… Therefore, it will take brands and retailers at least 6 to 12 months before their store can go live.
Payment Solution
You need to register an Alipay account pre-setup stage. Like Paypal, Alipay is linked with company’s bank account and the funds are sent immediately when requested.
Tmall Flagship Store Fee structure
There are four types of fees charged by Tmall for a flagship store:
- Deposit fee
- Annual fee
- Platform commission
- Alipay service fee
Logistics & Warehouse Solutions for a Flagship Store
There are two mostly used logistics models: bonded warehouses and direct shipping.
Bonded Warehouses Model
Goods are exported in bulk to a bounded warehouse in China and stored there until a purchased order is recieved, goods are then shipped directly to customers.
The delivery is fast and has low shipping costs. However, the initial setup cost and the risk of low inventory turnover ratio are present.
Direct Shipping Model
The goods are shipped directly to consumers in China after orders are made. You have to cooperate with Cainiao overseas warehouse, which is a part of Cainiao. You don’t need upfront set up fees and the cost of delivering goods balances with your increase in sales. The disadvantages are the slower delivery speed, higher delivery cost, and delay in delivery due to customs check.
Shop Operation
There is a partner role which might be new to the international brands — TP. TP is short for Taobao or Tmall Partner which refers to third-party companies that assist with the daily operations of your store on Alibaba’s e-commerce platforms in China. Your shop’s operation team provided by a TP is responsible for everything related to daily shop operation and business, e.g., creating product details pages, develop your store sales plan, execute performance marketing (e.g. paid advertising on Tmall), carry out store promotional events and e-commerce festivals such as double 11, customer services and etc. Your shop operations team shall consist of at least 4 people: store manager, designer, customer services (before and after sales). TP usually works with two different modes: distribution mode or consignment mode.
eTOC Provides You the One-Stop Services of Opening Online Store in China
As you can tell from the process and structure of opening a Tmall brand flagship store, this is not a simple decision which can be easily made. We strongly recommend international brands and retailers to conduct a comprehensive analysis, gather enough information and plan a business case in advance.
eTOC is a great fan of the “test and approve” approach. For brands who want to first test the Chinese market and get real market feedback, we can provide you with our “China Market Speed Test” service which enables international brands and retailers to first test its product potential with a very limited budget and gather market real data for the next “go big” solution – opening up Tmall brand flagship store.
If you want to open a Tmall or JD brand flagship store, you can contact us for a first free consultation.
Free Download
eTOC white paper “China Market Entry via E-Commerce” for free download:
- Cross Border E-Commerce (CBEC)
- Traditional Import vs. Cross Border E-Commerce
- Top 5 Domestic E-Commerce Platforms
- Top 5 CBEC Platforms in China
- Test Your Product Potential in China
- Sell on No.1 Marketplace Tmall
- How to Open a Brand Flagship Store on Tmall Global
- Sell to China via WeChat
- Your Partner Structure for a Successful China E-Commerce Business
- Logistics & Warehouse Solutions
