What is Tmall?
Tmall is the largest business to consumer (B2C) retail platform in Asia, enabling businesses to sell directly to Chinese consumers. It was founded in 2008 by the Alibaba group after International and domestic brands were becoming frustrated at having to sell their products alongside many counterfeit merchants on Taobao, the Chinese equivalent to a eBay. Tmall is different from Taobao in that it is specifically designed for businesses with certified brands and other legal documentation. The end user also benefits, because when they buy from Tmall they can be confident they are buying genuine goods from the brand itself. Since 2008, Tmall has grown rapidly and depending on what source you look at has the lion share of China's e-commerce market and is pivotal in the success of “singles day”, which has become China's shopping holiday on 11/11 every year. Despite this success, Tmall is still relatively difficult to list on for small to medium size brands outside of China and it is also worth noting, Tmall does not provide fulfilment like Amazon does in the west. This blog will hopefully give you and understanding of how Tmall works and some of the options to get your products listed.
Tmall has comprehensive mobile and desktop versions. A reported 82% of users prefer to shop on mobile so the screenshots below are from the mobile version.
- Activity Centre
- Shopping Basket
The home screen of the Tmall app is relatively clean. The top left and right corners have shortcuts to Mobile payments. The top left giving you the option to scan at merchant’s QR code, while the top right allows you to present your QR code to the merchant. Below, a search bar similar to what you find on Amazon’s homepage. However, at the far right there is a small camera icon which enables you to use your camera to identify the product you're looking for. Slightly lower down you'll see a selection of circular icons which contain shortcuts to other Alibaba services and partners, including Suning, Tmall Supermarket, Food Delivery (e le ma) and Tmall Global which we will come to later. As you continue down the page, you are greeted by a mixture of advertisements, recommended products and special offers all of which is fairly standard for an e-commerce website.
Second tab from the left which looks like plant about to grow takes you to a section designed to let users interact with celebrities and follow shopping influencers so they can keep up with latest trends. This section is organised in a similar way to other Chinese apps with a social function. You can see the trending posts on the home screen. Once you enter post the image may have tags which takes you straight to the product, you can also scroll to the bottom to see all the products mentioned in the article. It's not always about making a direct sales, influencers will also use their posts to give value and advice to their fans.
3. Activity Centre
This section accessible via the middle button in the bottom bar is where the latest promotion activities take place on Tmall. By visiting this page, users can find out what products have a daily deal, information about other upcoming promotions and there is also the option to filter the results for a specific product category.
4. Shopping Basket
The shopping basket is a fairly standard function where users can change their selections without needing to get back to the product page and pay for selected items. This means users do not have to remove an item from the basket if they haven't quite made up their mind. For shoppers who put a lot in their basket, you can also filter your basket by brand. Below the basket area, Tmall take the opportunity to recommend products they think you will like.
As with most account sections, this area contains links to and number of highly useful functions. Hey you can access your saved items, which shops you following, your browsing history and how many red envelope card discounts you have. Below there is a section specifically for dealing with orders which includes orders awaiting payments, awaiting dispatch, goods in transit, awaiting review, returns and an option to see the full selection order management tools. The remainder of the page contains links to access Tmall and Alibaba’s other services from phone top ups to flights and train tickets.
Getting Your Business on Tmall
After seeing the simple yet powerful functionality of Tmall, you may be wondering how you can get your products on Tmall. This is where Tmall becomes a little complex and expensive. We will do best to summarise, however we strongly recommend talking to a professional if this is something you are looking to do.
Tmall vs Tmall Global
Tmall have two platforms:
- tmall.com - The original Tmall platform built for Chinese customers and brands operating in China to use.
- tmall.hk which is commonly known as Tmall Global. For all intents and purposes this is a separate platform to tmall.com, and would justify a blog post in its own right. Tmall users can access it via the home page of Tmall both on desktop and the app. Note on the app where majority of customers shop, Tmall Global loads similar to a browser and in our experience this makes it much slower than tmall.com.
Getting on Tmall
According to Tmall’s own website, in order to get on Tmall your business should:
- Have been operating in China for over three years or have sufficient expenditure to gain traction in the Chinese market.
- Your Business operations and stock should both be located in mainland China
Although not specified, you may also need a Chinese trademark for your brand or products.
Costs of Tmall
The fee structure of Tmall varies depending on your product category. However here are some rough guidelines.
When you first signup you will have a deposit between 50000 - 300000RMB frozen on your business Alipay account, which will be used as collateral in the case Tmall incurs damages. This deposit is returned on termination of the service agreement.
Annual Technology and Service Fee
There is an annual fee of either 30000RMB or 60000RMB depending on the product category. In order to promote Quality service, Tmall Will refund the annual fee by either 50% or 100% depending on the seller rating and annual sales. In any case the seller rating should never fall below 4.6.
Customer Loyalty Program
0.5% is taken from each transaction which is then used by Tmall to reward customers in future promotions.
Finally, there is a commission fee on each transaction depending on your product category between 0.5% - 5%. You may also incur charges from your Alipay account which all Tmall users are required to use.
Getting on Tmall Global
According to Tmall’s own website, in order to get on Tmall global your business should:
- Ensure stock is located outside of mainland China.
- Presence in mainland China between 0 to 2 years
Costs of Tmall Global
When you first signup you will have a deposit between 25000 USD frozen on your Global Alipay account, which will be used as collateral in the case Tmall Global incurs damages. This deposit is returned on termination of the service agreement.
Technology and Service Fees
Depending on your product category, you'll need to pay a technology and service fee between $5000 and $10,000. Unlike Tmall where the Technology and service fee is refunded by either 50% or 100%, the fee is not refunded on Tmall Global.
Finally, there is a commission fee on each transaction depending on your product category between 0.5% - 5%.
Alipay Transaction Fee
Alipay charges of 1% service fee on all Tmall Global transactions. This is taken from the product price and logistics fee.
Despite Alibaba's mission statement "to make business easy to do anywhere", it is surprising Tmall is still so difficult for foreign brands to list on. Whilst the fees are small change for big companies, for the majority of small to medium sized businesses it represents a huge barrier to entry, not to mention the time to process all the paperwork. If you manage to open your stall, the battle has only just begun as you will need to find a way to get traffic to it. Therefore despite being the most popular E-commerce channel in China with a number of advantages, you should not expect Tmall to be an easy option. If you go for it, you should treat it like an investment which may result in losses. Have a plan and budget for marketing and a clear timeframe for expected results.