The Chinese market has become one of the most important consumer markets in the world, with a growing middle class who has money to spend. As e-commerce prospers in China, Tmall has become one of the most successful B2C marketplaces, with smart merchants and shoppers driving every possible product category to success. It is no wonder that international brands have been attracted to China and Tmall like bees to honey! This article will share insights on the key to winning on Tmall in China, the Tmall Partner.
First, why Tmall?
As the largest e-commerce platform in China, Alibaba Group has been a prime destination for foreign brands to enter the Chinese market. In 2010, Alibaba launched Tmall as a business-to-consumer (B2C) platform, allowing foreign brands to sell directly to Chinese consumers. Now, Tmall is the biggest platform in Alibaba's e-commerce empire.
There are so many reasons why international brands should join Tmall. The first and most important reason is the platform's sheer size.
- Tmall is the largest B2C platform in China, with over 500 million active registered customers.
- Tmall has over 50% market share of China’s B2C e-commerce business.
- In the fiscal year ending March 31, 2020, GMV transacted on Tmall reached approximately 3.2 trillion yuan.
The second reason is the ability to target your ideal customer. Tmall offers several marketing options, including search engine marketing (SEM), display advertising and keyword bidding strategies, which help you reach a larger audience. This is especially important if your brand has limited funds to spend on advertising to build awareness and gain market share in China.
Tmall is a curated marketplace, meaning that only the products of sellers who Alibaba has approved can be sold on this platform. Products may be rejected if they do not meet certain requirements, such as having an official brand owner registration certificate (for domestic brands) or having a registered trademark (for foreign brands). The strong brand integrity and a "Flagship Store" approach have driven the success of brands on Tmall.
Key to winning on Tmall – the importance of choosing a TP correctly
Going on the Tmall platform is often the first step for a foreign brand to enter the Chinese market without needing a physical presence in China. And working with a TP (Tmall Partners) is the only way to access the Chinese e-commerce platform. The importance of choosing a good and reliable Tmall Partner should not be underestimated. The major reason is that the way you sell your merchandise is vital to reach bigger sales and profits.
What is TP?
Third-party providers or Tmall Partners (TP) are Professional Service Company with operations in China which provides merchants with high-quality cross-border e-commerce services. Their services include building IT infrastructure, handling customer service, managing warehousing & storage, offering digital marketing & design and logistics services, maintaining web store and delivering web store analytics.
Typically, there are two ways of working with a TP, one being commission based and the other being a buy-sell model. In the commission-based model, the TP acts as the store operating agency on behalf of the brand. The brand will retain complete ownership of the Tmall store and will pay for all the store operation fees and any marketing expenses. The brand will also decide on how to market itself in China. Whereas in the buy-sell model, an authorized brand distributor will buy the inventory and then open a brand flagship store on Tmall themselves. The distributor will be responsible for all the platform and marketing fees, and they will also decide how the product is branded and sold in the market.
Why choosing the right TP is so important?
Choosing the right TP is one of those choices that you need to get right. There are many different types of Tmall Partners, and they are all different. Not all of them are created equally, and not all of them will help your business grow. It is crucial to choose wisely so that you can open up more doors for your business in China.
The right TP will help you grow faster – A good partner will help you get in front of more customers than ever before. Their e-commerce expertise will also help you promote your products better than you ever could on your own.
The right TP will also have more experience and understand the Chinese market. They should be able to advise you on how best to adapt your products or services for Chinese consumers, as well as what type of advertising is most effective in this country.
To conclude, choosing the right Tmall Partner is important, as it can have a huge impact on your business. When you are looking for a Tmall Partner, you are really looking for a team that understands your needs and can deliver high-quality products and services. The right partner will be able to help you navigate the complex Chinese market and give you insights into how best to respond to its demands. They will also be able to provide you with marketing strategies that will help you grow your business in China.
This is only a drop in the ocean. Would you like to know how to find the right TP for your brand and what mistakes to avoid when choosing the TP? Download our white paper or contact our team!
Click on the image to read the white paper
We also hosted a series of webinars with different partners talking about the topic:
- Webinar Replay - How to Improve TPs' Performance on Social Media