The dynamic development and openness to cross-border sales have made Chinese e-commerce dominate. People outside of China are buying on a large scale on Chinese e-commerce platforms, and the Chinese are increasingly willing to open up to cross-border shopping. Selling on Tmall, the largest e-commerce platform in China, can be a hit for those interested in exporting to China. By 2023, more than 40,000 international brands from 90 countries were selling their products on Tmall Global. Many of them were introduced to the Chinese market for the first time.
Cross border e-commerce
Cross-border e-commerce consists of consumers buying products online from manufacturers located in other countries. It is classified mainly for B2B and B2C platforms. In China, cross-border e-commerce is very popular because it gives Chinese people easy access to many foreign products.
Tmall Global is an example of cross-border trade. Thanks to it, the turnover of cross-border e-commerce in China has increased significantly. Cross-border e-commerce reached 1 trillion RMB in 2018 and doubled to RMB 2.11 trillion in 2022.
What is Tmall?
Tmall is a platform for business-to-consumer (B2C) created by the Alibaba Group. Thanks to this platform, Chinese and international companies can sell goods to consumers in Mainland China, Hong Kong, Macao, and Taiwan. It is the second-largest e-commerce site after Taobao and the most visited website in China.
There are two versions of the platform – Tmall.com and Tmall Global. In 2014, Alibaba Group created Tmall Global to enable foreign brands to enter the Chinese market. It allows international companies to sell products directly to Chinese consumers.
Selling on Tmall
The platform made it much easier for foreign brands to enter the Chinese market. Before Tmall Global was established, it was extremely expensive and time-consuming to start selling on the Chinese market. You had to register a local company, open a bank account in China, and send products to the local warehouse. In the case of start-ups and small businesses, such requirements were not achievable. By founding Tmall Global, Alibaba opened the Chinese market to Western brands.
When deciding to sell on the Tmall platform, you should remember to register your trademark. This is necessary to avoid the problems associated with its squatting by Chinese companies, which can then stop the shipment of goods or even their sale to China.
To be well prepared for selling to China, you need to have a proper product. The most important thing is to adapt it to the specifics of the Chinese market. First of all, take care of its Chinese name. You should start working with someone who knows the Chinese language and culture so that the new name is not a faux pas. In addition, the packaging of goods is essential. It has to attract the attention of Chinese consumers. To be successful in selling on Chinese e-commerce, it is also worthwhile to get acquainted with the most popular products on the Tmall platform. These are:
- mother and child products,
- F&B (food and drink),
Entering the Chinese market, you should plan your strategy in advance, from 2 to 5 years. It is also crucial to create customer service mandatory in the Chinese language.
The difference between Tmall.com and Tmall Global
Tmall.com is open to foreign investors. However, you must first register your company in China and open a local bank account. This process can take from 4 to 8 months. The cost of such formalities is between $5,000 and $6,000. In addition, commissions, deposits, and annual technical fees must also be taken into account. All costs of entering the platform can be found on the official page. What is more, you have to store goods in China, which also generates high initial set-up costs and ongoing storage costs. The Tmall.com website is available in the Chinese language only.
Tmall Global does not require company registration in China, a Chinese bank account, or storage in China. To enter Tmall Global, the company must have been operating for more than two years, and its sales exceed $10 million. When selling your products on this website, you need to be the owner of the brand, have a logistical plan to enter the market, and have the required documentation. You must prove that the goods comply with Chinese regulations. One such requirement is CCC certification.