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Western ecommerce brands seeking to expand into China cannot ignore the 500lb gorilla that is Tmall.
Even ASOS was recently forced to admit that its best chance of cracking China was to establish a presence on Tmall, while Burberry became the latest UK fashion brand to open a Tmall storefront in April.
In fact the Alibaba-owned marketplace currently has around 2,000 foreign brands among its 70,000 sellers.
So what’s so important about Tmall that it can make the likes of Apple, Uniqlo, Reebok, and ASOS create a store within someone else’s domain rather than rely on their own website?
The B2C marketplace was spun out of Taobao in 2010, which is itself a C2C marketplace that’s similar to eBay. Tmall allows brands and retailers to establish a digital storefront, which is again similar to the new model offered by eBay.
However that comparison isn’t entirely accurate, as Tmall charges sellers high tariffs and allows retailers to create a customised store that matches their existing brand image, including additional features such as bespoke content pages.
And it has quickly grown to become one of the dominant forces in Chinese ecommerce. According to Alexa rankings Tmall is the 8th most-visited site in China, while other research shows that the marketplace accounted for around 50% of China’s burgeoning B2C online retail sales.
So it’s not hard to see the attraction for Western businesses. But what are some of the other reasons that brands should consider Tmall?
One of Tmall’s key selling points for Western brands is the ability to build brand awareness among Chinese consumers.
If your brand has little or no visibility in China then it's useful to be able to join an existing online mall rather than trying to set out on your own.
Tmall dominates the Chinese ecommerce market to such an extent that it is an effective way for brands to showcase themselves to Chinese consumers.
For example, Casio told the Wall Street Journal that it was “impossible not to take advantage” of Tmall for brand building given how many users it attracts.
Guarantee of genuine goods
The danger of counterfeit goods looms large over the Chinese ecommerce market, so one of Tmall’s most attractive selling points is that it guarantees that all items are the real deal.
Tmall sellers have to pay a hefty deposit that they lose if they are caught selling counterfeit goods. These same rules don’t apply to Taobao, for example.
Therefore it establishes a brand's reputation among Chinese consumers, which is particularly important for companies that don't have an established presence in the country.
Guaranteed traffic (almost)
Tmall is an excellent option for brands that are testing the water or just beginning an expansion into China.
Given the site’s massive popularity, it’s likely to be easier to attract traffic to a Tmall storefront than it is to a new ecommerce site, which would require a huge investment in paid search and other marketing channels.
This is certainly true for brands that already have third-party licensed sellers operating on Tmall, as it means that Chinese consumers will already be searching the site for that brand.
For more information on options other than Tmall, read our post investigating whether Baidu pay per click advertising the only way into China?