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TMall - Gateway to China's Growing E-Commerce Market

  |  May 21, 2013   |  Comments   |  

Is it the digital sales channel for brands in China?

According to Euromonitor, Alibaba Group's TMall, a B2C sales platform solely dedicated to official brand stores selling to Greater China, will overtake Amazon in revenue by 2015.  It will officially become the world's biggest e-commerce site, leaving the likes of eBay and other pure-players in its wake.

And, to further cement its position as a key global player, Alibaba Group has just announced a $586 million investment in Sina Weibo - the biggest deal yet for the Chinese Internet industry. In the past, Alibaba's ventures into social and mobile selling just didn't deliver the required results. But this close collaboration between two of the world's most significant platforms is clearly designed to enable them to become the dominant force in social and mobile commerce. It's a win-win situation for both businesses - Alibaba will get the social/mobile reach it requires to generate even greater profits and Weibo will take an important step toward becoming a social business platform.

What this adds up to for brands is that, now more than ever, TMall is becoming a force to be reckoned with on the global digital stage; one that can't - and shouldn't - be ignored.

The digital sales channel for brands in China?

An increasing number of "big names" (Coca-Cola, Nike, Microsoft, Disney, Apple, and more) are looking to the East as a viable and long-term source of revenue, and it's no wonder; the e-commerce figures for China are impressive:

  • More than 242 million people in China shop online and they're expected to have spent US$265 billion by the end of 2013.
  • Collectively, they currently spend around $40,000 a second online.

And it's evident that brands with ambitions to expand into China need to consider TMall as part of their strategy:

  • 54 percent of all online shoppers in China use TMall, way ahead of its nearest rival 360Buy, at 17 percent. (Source: Alibaba)

Currently, TMall has over 70,000 official brands in 50,000 stores and is attractive to businesses for a variety of reasons:

  • It's based on the infrastructure Alibaba developed for Taobao Marketplace, China's leading C2C online platform for small businesses and individual entrepreneurs, and uses the payment system Alipay. Users are familiar with the way it works and all the services offered and trust the mechanism they have been using for online shopping over the years.
  • Unlike Taobao, TMall only accepts verified stores, so there's a guarantee that products sold online are real, which builds consumers' trust and in turn conversion rates. Trade in counterfeit products is a serious issue, and consumers are prepared to pay a premium for items that are certified as genuine.
  • Taobao pushes TMall stores actively over and above other stores, which results in more and higher converting traffic.
  • TMall's mobile app for iPhone, iPad, and Android has an average rating of 4.5 stars and contributed to a massive 600 percent increase in mobile commerce in 2012, for TMall and Taobao marketplace combined.

The annual Singles Day sale (an event held on November 11, celebrating people who are still living the single life) shows just how much TMall has grown since 2008, with sales amounting to RMB50 million, RMB936 million, and RMB3.36 billion in the years 2009, 2010, and 2011 respectively, leaping to a massive RMB19 billion in 2012. (Source: Alibaba)

Terms and fees

Besides having impressive sales figures, TMall is a straightforward way to reach out to consumers living remote from tier one cities where foreign brands usually establish a physical presence on entering the market. However, setting up a TMall shop without understanding the Chinese language or having a trusted local partner can be challenging. I'll share the key considerations in part two of my column tomorrow.

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ABOUT THE AUTHOR

Elisa Harca

With a background in running high-profile campaigns for major brands while at Glue, Digitas and now Red Ant, Elisa has spent the past 13 years exploring and developing new ways for global brands including Swatch, MTV, MAC Cosmetics, Samsung, and Ericsson to engage with their audiences. She has worked with clients extensively in the North America, Europe and most recently Asia. Recommended as an expert digital and mobile consultant by market leaders, she is recognized worldwide for her professionalism, integrity and her ability to help brands navigate the increasingly complex global digital landscape.

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