Tmall.com (天猫) is a Chinese website for B2C (Business to Consumer) online retail operated in China by Alibaba Group. First introduced as Taobao Mall (淘寶商城) launched in April 2008 as a dedicated B2C platform and within its consumer e-commerce website, it launched as Tmall in November 2010 to differentiate itself as it’s sellers are either brand owners or authorised distributors. Taobao is a C2C (Consumer to Consumer) online retailer, very similar to its western counterpart, eBay. On 11th January 2012, Tmall officially changed its Chinese name to Tian Mao, the Chinese pronunciation of Tmall, which literally translates to ‘Sky Cat’. It is primarily for local Chinese and International brands to sell their goods to consumers in mainland China, Hong Kong, Macau and Taiwan.
Burberry were the first luxury brand to join Tmall in April 2014. Traditionally, luxury brands have feared to create an online shop in China as they do not want their brand to be perceived as another high street retailer. Luxury brands pride themselves on their service, personal and unique boutique experience where each customer is a client. However, opening an online store means that you can reach consumers who would normally find it difficult access to a bricks and mortar store.
Not everyone can open a store though, Companies with China in-country business operations can apply to Tmall.com and companies with overseas licenses are eligible for Tmall Global. For those on Tmall Global, orders can be fulfilled and shipped from outside of China, and customer payments are settled in the preferred native currency (USD, EUR, GBP, etc). These companies are required to provide a China-based product return arrangement and Chinese-language customer service support. For more information, please visit Tmall’s website directly at the following link:
Just like with WeChat who have different service level accounts, there are three different store formats:
- Flagship Store – Only brands with a trademark (either ® or ™) can open this format. The owner of this store must be an official representative of the brand or hold exclusive authorization documents provided by an official representative of the brand.
- Speciality Store – This type of store is for businesses with brand authorization documents to show they have distribution rights to sell their products without geographical restrictions in the Greater China region.
- Monopolized Store – Sellers with two or more brands within one of Tmall’s product categories can open this type of store.
Of course, there are costs involved which depend on the type of store you go for. Overall, the costs can be broken down into three categories: deposit, technical service fee and sales commission.
- Deposit – This is taken in the event the shop has breached the ‘Taobao Mall Service Agreement’ and sold counterfeit products. These fees will be used to pay liquidated damages to both Tmall and consumers.
- Technical Service Fee – This is an annual fee is payable to Tmall Global yearly for services rende On the second year, to encourage service improvement and sales volume enhancement, the merchant has chance to get a refund if they reach Tmall’s predefined sales target for their product.
- Sales Commission – Tmall keeps 5% of the sales value as commission. This is based on annual revenue excluding shipping costs and are taken on an annual basis.
Opening a store means you will have access to over 500 million consumers who already know and trust brands that are already on Tmall. Having to go through this lengthy process to set up a store reassures the consumers that the shop has been thoroughly checked and will be purchasing genuine products. With Alibaba reporting $9 billion Single’s day sales in 2014, online shopping has become bigger than ever.