July 05, 2019

China's Tmall - Things you need to know

Entering the Chinese market is worth considering. If you want to expand your influence and enter a potentially high-profit segment, it is now easier than ever. Where it was once economically struggling, China is now booming. 

Internet users in China are estimated at around 632 million and growing. The younger generations are spending time online and buying online. If you are selling products online, it means offering your products through popular channels such as Taobao.

So, what is Taobao? And what is the difference of Taobao, Tmall and Tmall Global?

The key difference between Tmall and Taobao is that while Tmall is a B2C platform, Taobao is C2C (think of it like the difference between Amazon). Tmall was set up largely because consumers felt more comfortable buying goods from a company directly rather than from an individual. 

Taobao Marketplace– is a huge online store with millions of Chinese sellers and shops, operating on a C2C system.

This system allows sales of goods and services between individuals. For example, Taobao acts as an intermediary (a platform) in sales between private parties (the seller as an individual and the buyer/consumer).

Taobao marketplace offers possibility for individuals to open an online shop on its website, as long as those potential sellers meet certain requirements.

Tаоbао Mall (Tmall) – a trade site based on Tаоbао platform, operating on B2C system. Such trade model assumes the seller must be a legal entity (be an organization, an official manufacturer or a registered brand) offering their goods and services to end consumers.

For opening a shop on Tmall, the legal entity needs to provide all appropriate documentations to confirm reliability, genuineness and the real fact of existence of the organization, company, manufacturer or brand.  This approach eliminates the risk that an unscrupulous seller with products of dubious quality will trade on Tmall.

Taobao guarantees that all goods on Tmall are official and authentic. On each seller’s page, you can see certificates of quality and compliance.

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Taobao Mall Global(Tmall.hk)– Tmall International, a B2C platform part of Alibaba Group, is a popular online marketplace in China where many international brands are selling their products. Nowadays, Tmall has over a 50% market share of the B2C business in China and soon will become the largest e-commerce platform.

It has become the easiest way to penetrate into the Chinese market because Tmall International provides a cross border business model for many foreign brands and retailers to expand their business into China.

Type of Stores on TMall Global 

1. Flagship Store: only brands with a trademark (either ® or ™) can open flagship stores. The owner of the store must be the formal representative of the brand or hold exclusive authorization documents for setting up a Tmall flagship store provided by the formal representative of the brand.

2. Specialty Store: merchants with brand authorization documents giving them distribution rights to sell products without geographical restrictions in the Greater China region are eligible to open this store format.

3. Franchise Store or “Monopolized” Store: Merchants who hold brand licensing goods can open a franchise shop in Tmall. This means that retailers can sell two or more types of goods in several different categories. This includes two types: stores authorized to sell goods of certain brand; and stores authorized to sell multiple sub-brands which belong to the same controller.

Written by Fangrui Xu

Source: https://www.webretailer.com/lean-commerce/tmall-global/