How to Sell in China with Tmall Global. Overview - TMO Group

In China's eCommerce market, Tmall (owned by Alibaba Group Holding Ltd.) is the largest online platform. Tmall has over 800 million buyers, and ... All B2BChinaeCommerceHealth&BeautyMagentoDevelopmentSouthEastAsiaOtherCross-bordereCommerceDirectSellingeCommerceDevelopmenteMarketingHostingandSecurityIndustryInsightsNewTechnologiesMobileCommerceNewsOmnichannel(O2O)StatisticsSEOUI/UXDesignWebsiteDevelopmentWeChateCommerce Searchfor: This post wasupdatedinMarch2022.HaveyoualwayswantedtoexpandyourbusinessinChina?ThisarticlewillexploretheopportunitiesforyourorganizationtodriveyoursalesinChinathroughoneofthebiggestsaleschannelsforcross-bordereCommerce:TmallGlobal.TmallvsTmallGlobalTheChinesecross-bordereCommercemarketisnotparticularlyfragmented.Whiletherearelotsofstandalonebrandshops,plentyofsmall-scaleeCommercesites,scoresofspecializedplatforms–thereareafewgiantsthattowerabove,amassinglion’sshareofthemarket.Wearetalking,ofcourse,aboutTMallandJingDong.InChina’seCommercemarket,Tmall(ownedbyAlibabaGroupHoldingLtd.)isthelargestonlineplatform.Tmallhasover800millionbuyers,andover150,000merchants.AsthelargestB2CretailplatforminAsia,businessescanselldirectlytomillionsofcustomersthroughoutChina.Itis,atthesametime,anopenplatformmarketplace:Tmallprovidestheinfrastructuretohostyourstorefrontandunfilteredaccesstohundredsofmillionsofshoppers.OperatingsuchastorefrontissomewhatsimilartooperatingyourownB2CeCommercewebsite,withafewnotabledifferences.ToofferyourproductsthroughregularB2CeCommerceinChina,theproductsmustbeimportedfromabroad,whichrequiresalegalentityinChina.Similarly,openingupastoreonaChineseB2CeCommerceplatformsuchasTmallrequiresacompanywithaChineseentity.However,thereisaneasierwayforforeigncompaniestoreachtheChineseconsumers:largeandrapidlygrowingpartofTMallisTMallGlobal,launchedin2014–aseparateplatform,entirelydedicatedtocross-bordereCommerce.Cross-bordereCommerceissubjecttofewertaxesandcompliancechecks.Morespecifically,productsfromso-called“PositiveListsforcross-bordereCommerce”canbeimportedintobondedwarehousezonesoroverseasdistributioncenterslinkedtoChinesecustomswithoutapplyingforanimportlicenseoranimportcertificate.ThePositiveListisregularlyupdated,withthelatestupdatehappeninginFebruary2022,atwhichpointthelistcontains1.476productcategories.TocheckwhetheryourproductisonthePositiveList,thenpleaseuseTMO’s“PositiveListAmust-knowthingbeforeyouselltoChinaonline:Chinaissueda“PositiveList”forcross-bordereCommerce.Searchtofindwhetheryourproductislisted!PositiveListHelper”.HowTmallGlobalworksTmallGlobalaimedtohelpoverseasvendorscaptureChineseconsumers’boomingappetiteforhighqualityimportedproducts.Itisthecountry’slargestcross-bordereCommerceplatform,connectingover100millionactiveconsumersand30.000internationalbrands.Thesebrandsarerepresentedonindependentlyoperatedshopfronts(stores)orinaparticularcountrypavilion–whichbundlesproductsofdifferentmerchantsfromthesamecountryononepage.Forexample,theimagebelowgivesanexampleoftheHollandPavilion.HollandPaviliononTmallGlobalLeveragingAlibaba’sexpansiveconsumeranalyticsset,TmallGlobalprovidesoverseasvendorsinsightsintoChineseconsumers’shoppingbehaviorandpreferences.“Wearecommittedtoofferingouroverseasclientsmorepersonalizedandcustomizedsolutionssotheycanreceivefasterandmoredirectassistancefromtheplatform,whichwillenableandaccelerategrowth”,saidTmallPresidentJetJing.Suchinformationshouldbetterassistsmall-andmedium-sizedbusinessestomakeinroadsinChina,headded.TmallGlobalfollowsacomplexmerchantworkflowfromordertodelivery,asshownintheflowchartbelow.SimilartoTmall’sdomesticB2Cplatform,TmallGlobaloffersforeignmerchantstheautonomytodesignthestorefront.Itutilizesitscomplexonlinemallstructuretocombineflexibilityandsecurityforitscustomers.TmallGlobalMerchantWorkflow Tmall’sBusinessModelsformerchantsTMallGlobaloffers4businessmodelstochoosefrom.TmallGlobalFlagshipStoreThisisthemostadvancedmodelusedbybrandflagshipstores.ItoffersthemaximumreachtoChineseconsumersandthereforeisidealforbuildingbrandawareness.Itoffersamaximumrangeofpossibletoolsforrunningthestore–fromaccesstoconsumerinsightsdatatousageofpowerfulmarketingandpromotionaltools. Thismodeloffersmaximumflexibilitytoo,asitcanbeusedwithbothbondedwarehouseanddirectshippingapproaches.Brandscanchoosetorunthestorethemselvesoroutsourceittoathirdpartyagency.TMallDirectImportIfyouusethisoption,yourgoodswillbesoldonTMallDirectImportstore.Youwillgetaccesstoawell-developedandmaturechannel,withouthavingtorunyourownstore.Themaindownsidehereisthatyouhaveverylimited,ifany,controlovertheactualsalesprocess,aseverythingismanagedbyTMallDirectImportteamwhosourcethegoodsfromyou.TMallGlobalMinistoreThisformatisaimedatsmallandmedium-sizedbusinesses.Withlowentry/operationcostsandTMallGlobalteam’send-to-endassistance,thisisarealchancetogrowintothenextCross-bordersensation!OverseasfulfillmentThisoptionisidealforcompanieswhowantto“testthewaters”,butarenotreadyforthefull-fledgedcommitmentyet.WiththeOverseasfulfillmentmodelyouonlyneedtodeliverthegoodstooneofTMallGlobaloverseaswarehouses.CaiNiao,thelogisticsarmofTMall,haspartneredwithdozensofpostalservicesacrosstheworld,sochancesare,itissignificantlyeasierthanshippingthegoodstoChina.TMallOverseasFulfillmentteamhandlestherest–marketing,sales,operations,andthedeliveryofthegoodstotheendcustomer.StoreTypesWithinflagshipstoremodel,therearealsoseveralstoretypesthatcanbeopenedonTMallGlobal.Eachtypehasitsownrequirementsandopeningprocess,let’sgothroughthemaintypes.BrandFlagshipStoreThistypeofstoreisreservedforbrandsthemselves,orexclusivedealersauthorizedbythetrademarkholders.Brandissupposedtosellonlyitsownproducts.Theonlyexceptionaregroupbrands–theycansellmultiplebrandsthatarepartofthegroup.Goodsshouldbesupplieddirectlyfromthetrademarkowner. Toopenthistypeofstore,itisrequiredtoprovideacopyoftheoriginalTrademarkRegistrationCertificate.MarketplaceFlagshipStoreThiscategoryisusedbyofflinesupermarketchains,marketplaces,onlineB2Cwebsites.Foreachbrandsoldinthestore,youneedtoproviderelevantdocuments,confirmingthatthestoreisauthorizedtosellthegoods.IndustrialmarketplaceflagshipstoreThistypeofstoresisusedbyofflinechains/marketplacesthatoperateinspecificindustries:(Clothing,Maternity&Baby,Beauty,PersonalCareandsoon).Suchstoreswillhavetolimititsinventorytoseveralproductcategories–thereshouldbenomorethan3ofthem. Inadditiontothedocumentsrequiredforprevioustypes,forgoodssoldinthestore,thisgroupofstoreshastoprovidepurchaseinvoicesfromtrademarkowners.OtherstoretypesTMallprovidesseveralmoreoptionsforpotentialstoretypes,coveringoptionsforfranchiseoperatedstores,specialtystoresfocusedononespecifictypeofgoods,storesusingdirectsalesandsoon.PleaserefertoTMallssupportpageformoreinformationonthis.TMallEntryRequirementsIntheory,anycompanyregisteredoutsideofmainlandChinaiseligibletoparticipateinTmallGlobal.Practically,however,TmallGlobalaimstorecruitoverseasmerchantsthatcanprovidehighestqualitygoodsforChinesehigh-endconsumers.TobeconsideredforTmallGlobal,theymust: HavearegisteredcorporateentityoutsideofmainlandChina. AlreadyhaveanestablishedretailbusinessoutsideofChina Beabrandowner/authorizeddistributor Owntherelevantcertificates BeanauthenticproductsmanufacturerFurthermore,TmallGlobalgenerallytargetscompanies,operatingforover2yearsandwithannualsalesofover10millionUSD.WhenacompanydecidestoentertheChinesemarketthroughTMallGlobal,tocomplywithChineseconsumerlaws,itneedstofollowanumberoftheproceduresandrequirements.ThereareTmallGlobal’sThird-Partyservicesprovidersthatcanhelpwiththeseprocesses.Herearesomeoftherequirements: Productsmustbegenuineandcomplementedwithacertificateoforigin.TheymustclearbothChineseinternationalcustomsandTmallGlobalsecurity. Productdescriptions,aswellaslabels,mustbeprovidedinChinese,withtheinternationalmetricsystemadoptedastheunitofmeasurement.Chineselanguagecustomersupportmustbeavailable,forwhichTmallrecommendsemployingChineseAlitalkcustomerservice. Productsshouldbedispatchedwithin120hoursanddelivereddirectlythroughpersonalpackagesordeliveredfromChinaBondedWarehousingandCross-bordereCommerceTaxReformThebondedwarehousemodelofsellingcross-bordertoChinaismoreaccessibleandconvenientthanever.Checkouthowtousethismodelin2022.China’sbondedwarehousestomainlandChineseconsumers. MerchantsmustsetlocationsforhandlingreturnsinmainlandChina,HongKong,andTaiwanifyousellcommoditiestothoserespectiveregions.EntryProcessBetween2015and2019,Tmallhadaninvitation-onlypolicyforTmallGlobalregistration.Foreigncompanieshadtouseauthorizedthirdpartyservice(so-calledTmallPartners,orTP’s),whohadanexistingrelationshipwithTmall,togainaninvitationtothesite.In2019,theruleswererelaxed.Sincethen,anybodycangoaheadandvisitopenshop.tmall.hktoleaveanapplicationforbecomingaTMallGlobal’smerchant.AllinformationisconvenientlyavailableinbothChineseandEnglish,theapplicationprocessisdescribedinquiteadetail.ApplicationTobeginapplicationforeigncompaniesneedtohaveanactivatedAlipayaccountinadvance–tobeabletosendandreceivepayment.Allrequiredpaperworkneedstobeprepared.Exactlistofdocumentsdependsonthestoretypeandnatureofthegoodsthatitwillsell,butgenerallyyouwillhavetopresentsuchpapers,as:companyregistrationcertificate,statementofauthorizationoftherepresentative,IDdocumentsoftherepresentative,bankaccountcertificate,trademarkregistration(orpowerofattorneyfromatrademarkholder)andsoon.Refertothispageformoredetails:https://rule.tmall.hk/rule/rule_detail.htm?spm=a223k.15929587.7143107721.7.2113548dCeGwQu&id=11000442&tag=selfReviewAfterallrequireddocumentsaresubmitted,TMallwillreviewtheapplication.Officialwebsiteitwouldtakeupto7daysfortheapplicationtogothrough,butitisnotunusualtohaveitunderconsiderationforabitlonger.Activation/agreement/depositIfyourapplicationisapproved,youwouldproceedtothenextstagewherethereareafewmorethingsthatneedtobedone.YouwillreceiveyourTMallGlobalaccountinwhichyoucanstartfillingbasicstoreinformation.YouwillhavetosignallrelevantlegalagreementswithTMallGlobal.Finally,youwillhavetosubmityourdeposit,forwhichyouneedtohaveyourGlobalAlipayaccountverifiedandtoppedup.GoingliveAtthisstageyoubasicallygetyourstorestarted:youhavetoshipgoodstoCaiNiao’swarehouse(orwhateverisapplicableunderthemodelyouhavechosen).Thisiswhenyoucancustomizeyourstore’sappearance,configurethecatalog,etc.Finally,asyoupayanannualfee,yourstorecangoonline.CostsandfeesAlthoughTmallGlobaloffersaconvenientmechanismforgainingentryintotheChinesemarket,youshouldbeawareoftheTmallGlobalmarketplace’scosts.ThecostsassociatedwithoperatingonTmallGlobalcanbedividedintoaSecurityDeposit,ServiceandTechnologyFees,andanAnnualSoftwareServiceFee: Securitydepositrangingbetween50.000-300.000RMBanddependsonthetypeofthestore,typeoftrademark,soldproduct. Theannualfee(Technicalservicefee,asTmallcallsit)rangesfrom30.000USDto60.000RMB,dependingontheparticularproductcategory. OntopoftheTheTechnicalservicefee,Tmallchargesfeebasedonthepercentageofthegoodssold–anditislargelyrangesbetween2%and5% Additionallytothesefees,Cross-bordertransactionfeeischargedbyAlipayforeachtransaction.ConclusionTmallGlobalallowsdomesticChineseonlineconsumerstopurchaseoverseasimportedproducts,andmaybeconsideredaconveniententrystrategyoptiontoreachChineseonlineconsumers.However,thenatureoftheentryrequirements,combinedwiththecostsassociatedwithestablishingapresenceontheplatform,canbeahighentrybarrier.HereatTMOGroup,werecommendentrythroughTmallGlobalforlarger,internationallyestablishedfirmswithanestablishedbrandorsufficientfinancialassetstostimulatetraffictodrivesalesandrevenue.Wouldyouliketoknowwhatentrystrategywillsuityoubest?AreyoucuriousaboutotherchannelsforentryintoChina?PleasecheckoutourarticleexaminingTmallGlobal’smostnotablecompetitor,JD.com,andtheprocessesofsettingupastoreonJD.com.AnAlternativetoTmall:HowtoSellonJD.comInthisthirdarticleaboutTMO'sChinaeCommerceInsights2018wewilldiveintotheInsandOutsofJD.comandforwhoitwillbeanalternativetoTmallThisarticleexplainswhycompaniesJDoffersahigherchanceforsuccessinChina’seCommercemarket.PleasefeelfreetocontactusforamarketopportunityscanoraneCommercestrategydevelopmentproposalatinfo@tmogroup.asia.RelatedResourcesChinaeCommerceMarketGuideChinaHealth&FoodSupplementsIndustryReportRelatedPosts ChinaBondedWarehousingandCross-bordereCommerceTaxReform WeChatStoreSetup:TheBasicstoBuildingaWeChatStore AnAlternativetoTmall:HowtoSellonJD.com TMO’s2018ChinaeCommerceInsights PopularPosts Must-know:10LargestSouthEastAsiaOnlineMarketplacesin2022 Top5ChineseCross-BordereCommercePlatformsin2022 China’sBest-SellingMakeupProductsandBrandsfor6.182021 HowtoSellinChinawithTmallGlobal.Overview ChinaBondedWarehousingandCross-bordereCommerceTaxReform RecentPosts OverseashealthsupplementmarketinChinain2021:TMallsalesanalysis GuidetoB2BSEOinChina Top15ChineseeCommercewebsitesin2022 4MajorAreasB2BeCommerceinChinashouldfocuson WhatisDatabaseIntegration?HowtoUseitineCommerce? 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