Alibaba, TaoBao or Tmall?

 

Tmall is considered as the B2C platform enabling worldwide brands to reach the vast Chinese consumer market. Started in 2008 by Alibaba as Taobao Mall, and in 2010 Taobao launched an independent web domain ‘’Tmall”.

What you need to know about Tmall:

Alibaba splitted Tmall into two different platforms: domestic China marketplace which is the Taobao Mall that turned into Tmall and a transboundary platform called Tmall Global. Difference points are in terms of requirements and in terms of best practices. Let’s have a quick look over the two of them:

  

1/ Tmall Domestic:

Merchants willing to open a shop on Tmall.com have to meet the following requirements:

  • The brand shall have a legal entity in Mainland China, and the business purpose shall be retailing.
  • In order to be shipped on time, the goods have to be stored in China with a high frequency of importation.
  • The merchant should have a general tax payer authorization and can pay 17% VAT consumer invoices.
  • The entity applying has to be in operation longer than 2 years before registering on Tmall store ownership.

2/Tmall Global:

 

If a merchant wants to sell his goods on Tmall Global, he should meet those requirements:

  • The legal entity which will own the Tmall Global store should be located outside of Mainland China (and Alipay account linked to the merchant’s foreign bank account).
  • The goods have to be located outside China, or in a free trade zone physically located in China.
  • Has to pass the pre-qualification and assessment by Tmall. A process that makes the brand submit a marketing and operation plan to Tmall for the pre-approval. Also a business case and merchandising plan is required. Why? Because Tmall is very selective about wich brands and merchants will sell onto the platform, it’s an invitation only platform.

Outsourced and Inhoused Tmall operations:

Before going for the best practices on how to manage your Tmall stores, there is a very important thing you should know:

New brands or medium sized merchants work with an agency in order to act as outsourced E-Commerce department in order to handle digital marketing inside and outside of the platform, negotiations with Tmall, customer service, e-reputation, branding, etc. This is a common practice even for small brands. Of course a brand may choose to operate by itself, but Chinese digital marketing is a whole different think. Subcontracting this matter to a professional may the wisest thing to do before starting the business process.

 

Bigger companies always choose to work with a professional Tmall agency. Why? Because a digital marketing agency has acquired longer term experience in Tmall management due to the multiple clients and difference case studies.

Finally, merchants that sell at Tmall Global in almost all cases work with an agency. Simply because the brands will have zero experience in Chinese e-commerce, they have to rely on a third-party, a professional at the e-marketing and branding. In China branding is everything, so if you find an agency that does just the logistic part without making you famous at the very first time, it’s an already lost battle.

Best practices for Tmall shops management:

Media budget:

Establishing an online shop alone is a sterile action, the brand needs to invest on Medias so they can get a high traffic on the shop. You can’t actually sell in China if you don’t invest in your branding, people have to know your brand, and they will search about comments on Chinese Social Medias. 15% to 30% of anticipated revenues in performance budgets should be invested in Medias. (more information here

DSR (Direct Seller Rating) score:

Tmall is mainly focused on consumer satisfaction. After any purchase made, the consumer rates the shopping experience by three indicators: Logistics, Customer service and product quality, the score is from 1 to 5. Improving the entire e-commerce chain is crucial to maximize the DSR rate of your Tmall shop. A penalty system is established by Alibaba for those who fall under a certain rate. If your shop stays below 4.7 in one of the three key indicators for 3 consecutive months, it will most likely be shut down.

 Alibaba big data:

In order to target the exact user group, the agency will use special technology to create what is known as custom tags to those groups of users that will fit in the brand and price point and will result in the highest possible result, in such a way not let those 500 million active shoppers vaporized.

Price policy, Merchandising Strategy & positioning:

You have to maintain a stable brand positioning by focusing on a good merchandising strategy and price policy. Everything nowadays in the modern retail business in transparent, you also have to maintain a stable brand positioning.

 

If you need a Tmall Partner , you can ask us, see our E-Commerce Offer. 

 

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