So you have decided that Tmall Global is the platform that suits your business better than the alternatives, but what are the next considerations and the requirements to establish yourself on the platform?
Tmall Global is the largest cross border e-commerce platform in China and since the platform was introduced in 2014 the number of cross-border e-commerce retail consumers has grown rapidly, having increased tenfold by 2017. This strong growth trend has continued to steadily increase since then.
Tmall Global helps streamline the process into the vast and diverse Chinese e-commerce environment. It allows cross border businesses access into the market without many of the crucial documents and requirements that are needed in order to establish a regular TMALL flagship store.
For any company that seeks to enter into and flourish in the Chinese market, the opportunity presented by Tmall Global may sound like an attractive proposition. This article will further inform you on the platform, it will explore the various options that it has to offer and will highlight a number of important factors that are worth taking into consideration.
Tmall Global works upon an invitational basis. Specific companies are selected and offered the opportunity to join the platform. Only highly sought after overseas merchants are desired, as they appeal most to the high-end consumers interested in luxury foreign goods. Generally Tmall Global target businesses that have been operating for over two years and which generate more than $10 million dollars revenue.
It is focused around opening the Chinese market to companies that are based and registered abroad, and have not yet established operations on the Chinese mainland. Unlike a regular Tmall flagship store, establishing a Tmall Global store does not require your business to have been registered in China for a year nor does your business need a Chinese trademark.
While a Chinese bank account is not required for Tmall Global, you must set up an Alipay account. Alipay is an online payment system that can be compared to PayPal. Once this is set up payments linked between your Alipay merchant account and your domestic bank account.
Tmall Global requires more basic merchant information than the regular Tmall platform. Fewer and more easily attainable documents are needed, such as trademarks in the businesses country of origin, stock certificates, completed brand and product category forms, a valid business licence and copies of bank statements are among the most significant required documents.
While you are required to provide fewer documents on the Tmall Global platform in comparison to the regular Tmall platform, your brand and its products must comply with Chinese consumer laws. You must be able to prove your products are genuine and pass both Chinese customs and Tmall Global security checks. Product webpage descriptions and labelling must also be provided in Chinese, and importantly, Chinese language customer support and after sales teams are required in mainland China, Hong Kong, and Taiwan, if you sell commodities to those respective regions. This is a necessity, as they deal with returns and any issues customers have post purchase, which is linked to the deposit payment.
Tmall Global Partners
Tmall Global has Third Party service providers, Tmall partners, who assist your company through the process of store application and development. They guide your businesses entrance onto the platform and into the Chinese market. They assist in your preparation of all the relevant documents and information that is required, as mentioned above. Tmall partners help you overcome many of the issues that may otherwise arise from the various requirements of establishing a regular Tmall flagship store. These are outlined in the in the previous article (click link here).
For example, Tmall Global does not require your company to have arranged your own storage facilities and a logistical network within China. Tmall partners can arrange bonded warehouses and help your company with the logistical difficulties by providing assistance from their trusted partner Cainiao, a large logistical company that is also part of the Alibaba group. This would act as an alternative to the other Tmall Global cross border option, where your business would directly deliver packages from its domestic supply source.
This additional support and streamlining process does come at a cost though. The initial deposit that is required to establish a store on Tmall Global ranges from 25,000 USD up to around 45,000 USD depending on the companies industry and its products. This is a one-time fee (held in Tmall Global’s Alipay account) and is used as a guarantee in the case of any damages or expenses incurred by Tmall Global or any customer, or as a result of merchants’ breach of the terms and conditions. Additionally the annual fee is either 5,000 USD or 10,000 USD depending on the product. While the higher start up and maintenance fees include additional services, it is important to be aware of the additional costs and to take them into consideration.
Time To Market
The entry process of establishing a Tmall Global storefront can be divided into the following steps: entry preparations, store application, store development, pre-launch and eventually launch. This process often takes around 4 to 8 weeks to complete and may seem like an attractive alternative if your company is not yet registered in China. This is compared to a regular Tmall flagship store, which requires your business to have been registered in China for a year. The prospect of this considerably shorter time to market would save your business crucial time and money.
Another factor that applies specifically to Tmall Global and drastically decreases the time to market is that there is no requirement for products to be approved and licenced by the National Medical Products Administration (previously known as the Chinese food and drug administration, CFDA). This is often a costly and lengthy process, and avoiding it means that Tmall Global merchants their products can be sold directly from the foreign country to the Chinese consumer. This applies most significantly to the foreign, luxury, cosmetic and supplements industries that perform extremely well in the Chinese e-commerce and cross border spheres.
With years of experience in the Chinese e-commerce and Chinese cross border business market, our specialists can help establish your business onto the Tmall Global platform. If you feel that Tmall Global is right for your business, but you have not been invited onto the platform, contact us and we will help with your entrance into the Chinese market.
Also be sure to check out our upcoming articles, which will focus on China as the largest e-commerce market in the world, and how the foreign and luxury goods market are booming.