The Chinese e-commerce ecosystem is the largest in the world. With a population running into billions of people, and over 600 million internet users, the Chinese online business environment is a pot of gold that has been tapped into for many years by the Jack Ma led Alibaba group.
The largest e-commerce website in China is taobao.com, but it only services Chinese businesses located in China, and it is basically a customer to customer platform.
Then the Alibaba group launched Tmall. Tmall allows businesses open online stores, but the requirement for opening an online store on Tmall ranges from having a physical warehouse and physical store in China and passing through other regulations of opening a physically present business in China.
Taobao and Tmall share some similarities and lots of differences. Taobao is a marketplace, with lots of vendors, chaotic, crowded and not much organized, while Tmall is a mall, structured, organized, and the goods sold there are from quality brands. The similarity between Tmall and Taobao is that you must already have a physical presence in mainland China before you can open an account on the platform.
Due to the difficulty of international businesses scaling through the process required for opening a store on Tmall or Taobao, the Alibaba group launched Tmall Global. Tmall global affords international businesses with no physical presence in mainland China the opportunity to service the gargantuan Chinese e-commerce ecosystem.
In this article, I will take you through the length and breadth of the largest business to customer platform in China, Tmall and Tmall global, telling you everything you need to know, especially if you’re planning to enter into the Chinese E-commerce environment.
Tmall and Tmall Global are different platforms owned by a single company. Tmall China is for businesses that have a physical presence in mainland China. To have a store on Tmall, your business has to be registered in China, and it must have a merchant trading license from China.
Tmall Global, on the other hand, helps to solve the difficulties businesses not domiciled in China encounter to have a store in China. Difficulties like administrative hurdles to get your business registered and your license issued. Difficulties encountered in setting up a physical shop and warehouse.
Tmall Global allows international businesses with no physical presence in mainland China set up an online store on the Alibaba group’s platform, and help them tap into the very large and profitable Chinese E-commerce ecosystem.
The major difference between Tmall and Tmall global is that Tmall accepts only businesses that have an offline presence in China. That means you must have a physical store, a warehouse, your business must be registered in China, and you must have a license issued to you, that makes you eligible to operate as a business in China, while Tmall global comes with an entirely different concept.
Tmall global allows businesses not located in China, that is you don’t need to have a physical store, a warehouse, you don’t need to be registered with the Chinese authorities, and also you don’t need to have a Chinese business license for you to trade with Chinese customers to have access to the Chinese E-commerce environment.
All you need to set up shop on Tmall Global is just to meet the requirements needed to set up by Tmall Global.
There are certain requirements you must meet before setting up a store on Tmall and Tmall global. Setting up shop on Tmall, you will need
• A physical store to sell where buyers can come to pick up there goods, or where your products are displayed, and warehouse where your goods are stored.
• You need your business to be registered in China, and you need to have a merchant trading license from China, allowing you to do business in China.
The requirement for setting up shop on Tmall Global is a different ball game
• You must be a registered business outside of mainland China, preferably in your country.
• You must have relevant qualifications that allow you to partake in overseas trading.
• You must have the relevant stock certificate.
• You must be a brand owner or an authorized agency. And you must have purchase vouchers.
• Your business must have been operating for more than two years, with sales of more than $10 million.
• Your product should preferably be a popular brand overseas.
• Brand owners and authorized agencies are preferred.
• Branded Business To Customer business in your home country is preferred.
You can set up three different types of stores on Tmall global. There are three different types of stores on the platform you can choose from, but it must be aligned with the type of business your company operates.
To open a flagship store as a brand owner on the Tmall Global platform, you need to provide a trademark registration certificate for your brand. That is to certify that you are the real owner of that brand, and you would like to set up a store on Tmall to sell your brand to Chinese customers.
To open a flagship store as a merchant on the Tmall Global website, you will need to provide proof of authorization from the brand owners to operate a flagship store on Tmall global.
To open a specialty store on Tmall Global, you need to be a merchant with documents of brand authorization giving you distribution rights to sell their products without geographical restrictions in China.
An authorized store can be opened on Tmall if the merchant has the license to sell brand goods on their store. Authorized stores, also called franchise stores, can sell different products on their stores but is dependent on them having the authorization to sell those brands on their store.
You can sell varieties of products on your Tmall store. The products that can be sold on the Tmall Global store range from normal goods like cosmetics, baby food, beauty tools, supplements, , baby care, baby clothes, toys, clothes, watches, accessories, jewelry, skincare, lingerie, kitchen utensils, beverages, and household appliances, to luxury imported cars like Ferrari, Lamborghini and Mercedes, to expensive wines.
On Tmall Global you can sell anything, and there are consumers willing to buy anything you offer.
The process of applying for and setting up a store on Tmall Global is simple and straightforward.
• Submit your product information to Tmall, and wait for verification. This can take up to 10 working days.
• Register an international Alipay account, your funds are transferred Into your Alipay account.
• Sign an agreement with Tmall and pay the annual service and deposit fee.
• Open the store. This includes signing up on Tmall Global platform, taking a test, complete further requirements needed, add your products, then launch your store. You start selling immediately.
To set up shop on the Tmall platform, you need to cover up just the deposit fee and the annual service fee.
The deposit fee required before setting up a store on Tmall is between $8000 and $25000 depending on your product category. And it is used to pay back customers who are not satisfied with products delivered to them if the products were counterfeit or not up to the standard advertised.
This annual service fee is paid to Tmall Global for services rendered, and it is paid yearly. The service fee range from $5000 to $10000 dollars, depending on your product category.
To store and ship your products to Chinese customers requires you to have a good logistics plan that will help improve your Tmall Global business. You have two options to choose from, you can either use bonded warehouses or carrier postal services.
They both operate differently. For a bonded warehouse you export your goods to China in bulk, to a warehouse located there in China. The goods are shipped to and stored in these warehouses till there is an order, then the goods are transported to the customers who ordered it.
For carrier postal services, the goods are shipped directly by the company to the customers who ordered for it. The goods are required to pass through customs every time a good is shipped.
The pros of these methods are for a bonded warehouse the delivery is fast, lower shipping costs, fast approach to orders, while the disadvantages are the high initial set up cost, and ongoing inventory and warehouse costs.
For a carrier postal service, the pros are you don’t need upfront set up fees, and the cost of delivering goods balances with your increase in sales, the disadvantages are the slower delivery speed, higher delivery cost, delay in delivery due to customs check.
An international company is paid using their Alipay account, that is why you’re required to open an Alipay account before setup. Alipay works just like PayPal, linking the company’s Alipay merchant account with the company’s bank account, and the funds is sent immediately it is requested.
If you have any doubt with opening store on Tmall, please contact us. No matter how big or small your business are, we will help you open a store, source quality and affordable products, and we will ship them directly to you. Also we provide below services:
• Product Sourcing: With over 10 years experience in this field, our team will keep your mind at peace, and you will be sure that the products are supplied through a responsible supply chain.
• Amazon FBA sourcing service: We offer you Amazon seller services, from product procurement, to brand labeling, quality inspection, packaging services, product photographing and also shipping of products to FBA warehouses. Just tell us what you need, and we will help ship your products to your warehouse at lightning speed.
• Business and sourcing ideas: If you walk into our office, we will share business and sourcing ideas with you, even if you are importing yourself, our ideas will help you avoid mistakes that will be costly to your business. Our advice will surely help your business turn out better.