My previous post introduced Tmall, Alibaba’s mammoth B2C eCommerce platform and talked through the differences in the various Tmall stores available to brands. Next, I will talk through some of the associated costs to set up on the platform, the timelines to ‘go live’ with your store, your in-platform and off-platform marketing best practices (Qumin’s sweet-spot) and also any legal requirements that you may not have considered yet.
As with entering onto any eCommerce marketplace, there is your allocation of resource, outsourcing of expertise to carry out photography, product listings and description. Then, there is customer service, fulfilment, OMS set-up; all taking time, resource and of course, cash. With Tmall and typically with any local China platform, there are additional considerations to take. Most of these considerations will be covered later in the legal section, but from a store set-up perspective, you have more customisation available on your Tmall store compared to Amazon and Rakuten, for example. You have the opportunity to brand your Tmall store front to ensure complete alignment with your own branding. Take Burberry for example, their flagship store could easily be mistaken as cn.burberry.com – See below.
Moving on, we must highlight the upfront fees from Alibaba themselves. First up is the security deposit, this one-time fee is used as collateral in the case of any damages incurred by Tmall.com or any customer. This fee is refunded upon termination of your Tmall service agreement. The size of your security deposit depends on the Tmall store type that you choose to open –
- Flagship Store – 100,000RMB
- Authorised Store – 100,000RMB
- Speciality Store – 150,000RMB
There are various categories of speciality stores that carry different security deposits (click here to find out more).
In addition to the security deposit, there is a technical fee payable on an annual basis. This fee again varies, this time it is dependent upon your primary product category. This fee is either 30,000RMB or 60,000RMB depending on the category. Discover the fees associated to your category here.
As with all eCommerce marketplaces, merchants must pay a commission fee as well based on annual sales. This ranges from 0.5%-5% and again depends on the category of products a merchant is selling.
In summary, merchants will pay a security deposit, a technical fee and commission.
Typically, a Tmall store will take about 4-5 months to open from the first contact with Alibaba, however, there is a lot of back and forth with paper work, trademark, fulfilment, customer service and business status requirements that can slow the process down.
Previously I touched on the in-platform and off-platform marketing to drive traffic to your Tmall store, China is an entirely localised online marketplace. Everything from your social media networks, video streaming platforms and its search engines are all specific to the Chinese market. They therefore require a specialised approach. I am not going into too much detail on this post, though the importance of social media in the Chinese customer journey to purchase is often underestimated outside of China. For example, consumers between the ages of 25-34 are three times more likely to take recommendations from peers on social media than consumers in the US.
Specific to Tmall, there are a few core marketing activities that merchants can undertake to increase the visibility of their brand and products in-platform. These range from search engine optimisation (SEO) of product titles and descriptions to various paid marketing channels to be leveraged to build both brand and product awareness. Tmall ZhiTongChe (Express) is effectively Pay-Per-Click (PPC) within Tmall. It allows merchants to bid on keywords that will display their products as search results. Just as with PPC, this is billed on a Cost-Per-Click (CPC) basis. As well as Zhitongche, we have Zuanzhan (Diamond Booth). Zuanzhan is Tmall’s ultimate brand awareness generation tool. It allows merchants bid for the placement of their banner ads throughout prominent areas for of Tmall’s web real estate. This channel can be compared directly with Googles Display Network. Here, merchants are billed on a Cost-Per-Thousand-Impressions (CPM) basis.
Before you even get started with all of the above, Tmall will put merchants through a rigorous compatibility process. They are ensuring that your brand and your business is setup to deliver the ‘Tmall standard’ level of service to its loyal customer base and that your brand will bring even more value to their marketplace. The basics include –
- China registered business
- Warehousing in China to match their 72 hour return policy
- Brand trademark owner or permission to sell under the trademark in China
- 24 hour Mandarin Chinese customer service capability
- Chinese payment gateway integration (Alipay)
- OMS integration
Merchants require a Tmall Partner in order to achieve most of what I have spoken about in this post. Qumin, Europes leading Chinese digital marketing agency, are ready to help you take your brand on to Tmall China and start trading directly into the worlds largest B2C eCommerce platform.
For enquiries please contact me directly at email@example.com.