China’s Ecommerce market is the largest in the world with a sales volume of 2 trillion USD per year. In 2020, China had 800 million online shoppers and it’s estimated that the Chinese Ecommerce market will be worth 1,556.2 billion dollars in revenue by 2024.
These statistics show a massive opportunity for international businesses to start selling in Chinese market. If you are considering selling in China, you need to understand the two ECommerce giants – Tmall (B2C) and Taobao (C2C) as they have over 50 percent share of the online retail market.
In this article, we’ll talk about Tmall Global – a sub-platform of Tmall for international merchants to sell imported products through cross-border e-commerce.
What Is Tmall Global?
Alibaba’s Tmall Global is one of the largest cross-border online marketplace in China. International businesses can start selling goods in China on Tmall without setting up operations in the country.
In 2021, over 5000 new overseas In 2021, over 5000 new overseas brands launched their Tmall Global stores. In the same year, over 2000 small- and medium-sized businesses achieved annual sales of over $155,000 from the platform. Of all foreign companies that started selling on Tmall in 2021, it was the first time in China for 80 percent of them. o (Source)
The platform is also seeing an increase in Chinese online shoppers. Gen Z is the fastest-growing consumer segment for imported goods in China. The products from each country are bundled together and appear on one page. For instance, the following image shows what ‘Holland Pavilion’ looks like.
To meet the growing demand for imported goods on the platform, Tmall has six procurement centers around the world and over 1300 cross-border logistics routes. They have also set up bonded warehouses to store dutiable goods without duty. This has facilitated cross border e-commerce by reducing the time for delivery. More and more domestic customers are able to purchase global goods without having to travel abroad.
Wondering if you can setup a Tmall global store and start selling your goods in China? You might want to refer to the ‘China ECommerce Positive List’. Positive list is the central document regulating Cross-border eCommerce in China that mentions the product categories that can be imported in China through Ecommerce.
Products from the ‘Positive List’ can be imported into bonded warehouse zones or overseas distribution centers. These centers are linked to Chinese customs and don’t require businesses to apply for an import license or an import certificate.
Features of Tmall Global –
- Alibaba’s expansive consumer analytics set – Tmall Global provides foreign merchants insights into Chinese consumers’ shopping behavior and preferences.
- Custom storefront design – Design your store based on your understanding of the product and Chinese consumers’ interests.
Tmall China Vs Tmall Global
Tmall China differs from Tmall Global as it requires its merchants to have local China entities and register its products with the local authorities. Merchants on Tmall are usually larger Chinese brands and F500 international brands with established offices in Mainland China. This includes the likes of Zara, Adidas and Estee Lauder.
On the other hand, merchants on Tmall Global are companies with corporate entities outside of China that sell imported products. Both entities are owned by Alibaba group.
The commission rates on the two platforms are also very different. Commission on Tmall China range from 0.5% to 10% but are commonly set around 2% to 5% per transaction. On the other hand, commissions on Tmall Global are higher, as the platform charges an average of 3% to 5% on each sale.
Both platforms require the merchants to submit a security deposit. On Tmall China, the security deposit is between 30,000rmb to 150,000rmb. On Tmall Global the security deposit is fixed at $25,000.
On top of that, the platforms also charge a yearly maintenance fee which ranges from 30,000rmb to 60,000rmb.
Why Sell On Tmall Global?
- If your business is eager to expand into the China market but was reluctant to take on local inventory risk.
Tmall Global will let you enter the China market while removing this risk.
- If your business has noticed a recent increase in overseas purchase demand for their product.
Tmall Global offers you the opportunity to directly sell to these consumers who are interested in imported high quality products.
- If your business had previously thought selling finished food products directly to the China market is impossible. Tmall Global enables your brand to bring their locally famous product to Chinese shoppers.
How To Sell On Tmall Global with Tmall Store?
To be eligible to sell on Tmall Global, overseas merchants should meet the following conditions –
- Registered outside of China with trademarks in any country but China.
- Be the brand owner, and provide complete product purchase certificates of the brand.
The merchants should be qualified to retail overseas and have good operating conditions. They must also have certifications to prove that their stock is located outside of China.
There are two ways for foreign brands to sell on Tmall Global:
- Tmall Global Flagship Store (TMG): this is the most popular and suitable for bigger brands
- Tmall Overseas Fulfillment (TOF): this is suitable for new and smaller brands
Tmall Global Flagship Store (TMG)
This is a self managed flagship style business where the brands set up their store to promote new products. These stores opened by brand owners or exclusive dealers directly authorized by trademark holders on Tmall Global.
They offer a great opportunity to educate and engage your customer base in China through a dedicated CRM program.
Tmall Overseas Fulfillment (TOF)
This is a CBEC consignment solution that allows brands to sell a small number of products on Tmall Global. The whole fulfillment process with the logistics is managed by Tmall Global with their own warehouses around the world. These warehouses are known as ‘Alibaba’s Cainiao’ and they reduce the storage and logistics costs for international sellers.
Tmall also takes care of marketing these products. This means you’ve less control over the details of your products, their positioning and cross-promotion.
AdChina is your partner of choice to enter China’s ECommerce market with Tmall Global
Are you ready to start selling in China? Our team of experts at AdChina.io can help you setup your brand’s store on Tmall and other relevant platforms. We’ll also help you run campaigns to drive traffic to your store.
AdChina.io is the first of its kind platform that helps international businesses sell and advertise in China easily. We’ll help you plan, launch, optimize, and scale your campaigns across each of the biggest channels in China — all with just one tool!