E-commerce in China is now the largest in the world. There is a lot to be gained if international companies can successfully sell online in China. T-mall Global seems to be the front-runner for the best platform for online sales in China, however, it also comes with a set of requirements and cost that firms should look into before start investing.
Rapid Expansion of E-commerce in China
With Chinese’s penetration rate skyrocketing, mobile and the internet have become popular mediums for Chinese to shop. China has recently become the largest e-commerce market valuing at 3.88 trillion RMB annually on 2015. The number grew by a staggering 33% from the previous year. It is estimated that it will grow to 9.45 trillion RMB in 2018, which accounts for one-third of the country’s total retail sales. With the country’s population ranking first in the world, the e-commerce market in China represents immense opportunities for Chinese and international companies alike. E-commerce also allows international firms to test their products and brands out before investing in brick and mortar establishments in China. As such, many international firms are looking into gaining access to the massive e-commerce market in China.
T-mall Global: The Answer for International Retailers?
With over half of the market share for online B2C, T-mall is a platform not to be ignored. In 2013, T-mall, owned by tech giant Alibaba, expanded its business outside of China border by launching T-mall Global.
For the first time, international companies without physical store presence in China are allowed to sell to Chinese customers through this online platform. International retailers ship directly from overseas to T-mall warehouses, which goods will then be distributed through its extensive network of warehouses and distribution channels. Products are guaranteed to be delivered within 5-8 days. In addition, payments can also be in international retailer’s currency of choice. Not to lose to T-mall, JD, its biggest competitor, also launched JD Worldwide. However, JD Worldwide is still relatively new compared to the already successful T-mall Global, therefore, experts advise international companies to be cautious when selling through JD Worldwide.
Although T-mall Global seems to be the answer for international players looking into selling their goods online to Chinese customers, T-mall Global has a set of extensive requirements and cost that could deter and disqualify many international companies. International firms have to either be invited directly by T-mall or ran through a TP. A third-party, sometimes referred to as T-mall Partner or Trust Partner (TP), an agency that facilitates international companies without physical store or presence in China to sell their products on T-mall. International firms must also be a registered corporate entity outside of mainland China, has retail and trade qualifications overseas, has been operating for more than two years with annual sales over US$10 million and more. In addition, there are certain products, labeling, logistics and service criteria that must be met by these international companies to gain access to T-mall Global. Unlike popular belief, selling on T-mall doesn’t go light on your bills either. T-mall Global requires a US$25,000 security deposit, US$ 5,000 annual fee and additional sales commission depending on the type of products.
Combat Counterfeit and Gray Market Goods
The listed requirements and cost might be discouraging to some, however selling on T-mall Global is a great way to combat counterfeit and gray market goods. Chinese grey market is huge and hard to diffuse. High-end brands have been struggling for years to combat and control these gray market goods where products are bought overseas and resell in China. Brands have no control over these products’ quality, promotion, marketing or authenticity. Countless damages can be done to the brand if these gray markets are allowed to continue. Therefore, many brands have set its sight in eradicating gray market goods in china. T-mall Global became many brands’ solutions to fight these unauthorized third party sellers. Burberry and Estée Lauder saw a significant drop in third party stores after they sell officially on T-mall. L’Occitane did the same in 2014 with the same hope of seeing the unauthorized sellers disappear from the market. Brands with the same hope should consider T-mall as a solution to the long existing problem.
With more than 50% of market share, T-mall is undoubtedly the primary contender for international online platform firms to sell goods on in China. Even with the extensive requirements and cost, if did well, international retailers can much benefit from selling their products on T-mall Global. In addition to the revenues generated, international retailers will also be able to test their products out as well as combat counterfeit and gray market goods in China. T-mall Global might be the answer that international retailers are looking for after all.
Shared by Daxue Consulting
Over the past eight years, Sarah has led and executed successful digital campaigns for a range of international and local companies in China, Hong Kong and internationally, including: Hong Kong Ocean Park, agnes b, Volkswagen, Premium Tax Free – Watches of Switzerland and Damiani. She has worked with property, travel and hospitality, luxury and fashion clients. As a native Chinese speaker fluent in Mandarin, Cantonese and English, Sarah is also a popular Chinese lifestyle, fashion and travel blogger.
During the day, she was working for Red Digital China, during the night, she expands her interest in creating story-telling content, design, drawing etc.