Download How to Be Successful on Tmall.com Chinese B2C eCommerce Strategies

How to Be Successful
on Tmall.com
Chinese B2C eCommerce Strategies
This Digital Jungle new e-book aims to help NonChinese brands to understand the Chinese B2C
eCommerce landscape, and to provide tactical and
practical solutions for conquering the Chinese online
shopping market.
// Page 1
Table of Contents
Introduction .……………………………………………………………3
An Overview of the Chinese B2C Sector.………………………4
Leading Chinese B2C eCommerce Websites.…………………5
Why Do We Recommend Tmall?.…………………………………7
Key Facts About Tmall………………………………………….7
Other Vital eCommerce Information………………………8
How to Differentiate from the Competition?
- Digital Marketing Strategies…………………………………….10
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Introduction
A large number of non-Chinese retailers have started to
invest in the growing field of eCommerce in China, making
eCommerce an indispensable part of their business models.
There are three basic strategies which multinational
companies normally take to enter Chinese e-retail market:
setting up a dedicated brand website, forming a partnership
through purchased equity, or opening up an eshop on
established marketplace sites.
When it comes to small and
medium-sized business in
China, the last strategy is always
their first choice, though large
dedicated B2C sites with
eCommerce capabilities(Dell, for
example) are obviously the
leaders in most other countries .
As reported by China
Daily, “nearly 90 percent of
China's e-tailing industry operates
on marketplace sites that host a
wide universe of small and
medium-sized enterprises and
micro-businesses, providing them
with the tools to set up online
storefronts, list items and collect
payment”. Source: China Daily, 2013
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The total sales of
China’s e-retail
sector is
estimated to
increase by 200%
and reach $360
billion by
2015, when
eCommerce will
account for nearly
10% of all China
retail sales.
Source: Boston Consulting Group, 2012
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An Overview of the Chinese B2C Sector
China’s B2C sector has seen rapid
development in recent years and
reached 350 billion RMB in 2012. The
proportion of eCommerce sales
revenue for B2C sector has increased
from 8% to 30% from 2009 to
2012, and is expected to account for
almost half of the amount by 2015
(see the figure below).
Proportion of Sales
Revenue (%)
100%
90%
The Rise of China’s B2C Sector
8%
14%
24%
80%
30%
35%
41%
46%
70%
65%
59%
54%
2012
2013e
2014e
2015e
70%
60%
50%
40%
92%
86%
77%
30%
20%
10%
0%
2009
2010
2011
C2C
B2C
Source: iResearch Consulting Group, 2013
// Page 4
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Leading Chinese B2C eCommerce Websites
Tm all.com
Tmall.com is a B2C platform owned by
Alibaba Group. It was first introduced via
Taobao in April 2008 as “Taobao Mall.” In
June 2011, Tmall became an independent
company after Alibaba Group reorganised Taobao into
three companies: Taobao Marketplace (a C2C online
shopping platform), eTao (an online price comparison
search tool) and Tmall. Since its establishment, Tmall has
played an important role in supporting leading local and
global brands in their missions to reach out to the growing
Chinese consumer base, as well as leading domestic online
shoppers to purchase quality, brand name goods.
Now, Tmall is the largest B2C marketplace site in
China, accounting for 57% percent revenue market share.
1%
Chinese B2C Market
Penetration
2%
1%
1% 1%
4%
Tmall
360buy
3%
Suning
5%
Tencent B2C
Amazon.cn
5%
Dangdang
Gomei
57%
Vipshop
Yihaodian
20%
Vancl
Others
Source: iResearch Consulting Group, 2013
// Page 5
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JD.com
JD.com, previously named 360buy.com, is
another key player in the Chinese B2C
market (20 percent market share).
Founded in 2004, JD is now the largest 3C
(computers, communications and consumer electronics)
online retailer in China’s B2C market. Additionally, several
international sites for overseas shipping have also been
launched: en.jd.com as its global Chinese-language
site, w.jd.com as its global English site, csg.jd.com and
sg.jd.com as its Singapore sites.
Sunning.com
Suning.com is a B2C eCommerce platform
owned by Suning Appliance Company.
Suning.com is the 3rd largest B2C eCommerce in
terms of turnover. Its main products include
traditional home appliances, 3C
products, general merchandise, etc.
Other key players:
// Page 6
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Why Do We Recommend Tmall?
K ey Facts About Tm all
 Tmall is Asia’s largest B2C shopping platform in terms of
revenue.
 Tmall has more than 57% B2C revenue market share in
China.
 Tmall has over 500 million registered users.
 Tmall is visited by over 40 million unique visitors every
day.
 Tmall’s gross merchandise value reached 200 billion RMB
in 2012.
 Tmall Age Distribution:
10%
9%
26%
18%
37%
18-25
25-31
31-36
36-41
Source: iResearch Consulting Group, 2013
 Many well-known global
brands have opened up eshops on Tmall, including as
Best Buy, Marks and
Spencer, The North Face and
Ralph Lauren.
// Page 7
Tmall features:
A wide variety of
products
High quality
brand products
Solid reputation
and credibility
Large traffic
volume
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Other Vital eCom m erce I nform ation
• Alipay
Alipay Company is an affiliate of Alibaba Group, and its
product Alipay is a third-party online payment system that
relies on escrow process to guarantee that payments and
deliveries are fulfilled.
During the transaction, the payment from the buyer doesn’t
go to the seller’s account directly. It is held by Alipay and
won’t be released to the seller until the buyer acknowledges
the receipt of the goods.
This payment method has played an important role in building
trust among users after it was launched. Alipay now partners
with more than 100 financial institutions including
UnionPay, Visa and Mastercard to provide payment solutions
for Tmall.com as well as more than 460,000 Chinese
businesses.
• Abundant Customer Data
Due to the large volume of transactions proceeded on all the
Alibaba websites every day, there’s no doubt that this
eCommerce giant understands Chinese consumers better than
any other company.
Tmall, as the biggest B2C online shopping platform in China,
has an abundant amount of data
about Chinese customers’
demographics, buying behaviour
and patterns, which shows its
potential to support its sellers in
selecting their target audience.
// Page 8
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• A Marketing Platforms with Multiple Functions
Alibaba Group owns a variety of marketing platforms with
multiple functions for its sellers to use to advertise or promote
their brand(s) and products. The two most popular platforms are:
Tmall Zhitongche (Express) & Tmall Zuanzhan (Diamond Booth).
Tmall Zhitongche allows Tmall sellers to bid on keywords that will
display their products as search result rankings. Sellers are only
billed when a user clicks on an item on a cost per click basis.
Tmall Zuanzhan is more suitable for premium e-tailers that want
to quickly promote the sales of products or build brand
awareness. There are various advertising spaces on Tmall’s
homepage and on its channel pages. Zuanzhan allows e-tailers to
bid for these spaces and charges them for page views. The cost
is billed per one thousand impressions.
Tips:
 Requirements for opening up your Tmall shop
If you want to open up your shop on Tmall, you need to
register your business (which entails submitting all legal
and partnership information) in mainland China to set up
online store.
A trademark in Chinese characters is also required to
apply; this can be obtained from the Trademark Office of
The State Administration For Industry & Commerce of
People’s Republic of China.
 6 most effective ways to promote your product on Tmall
Coupon
Presale
time-limited discount
// Page 9
Free delivery
Giveaways
Group buying
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How to Differentiate From the Competition
- Digital Marketing Strategies
Digital Jungle has an eCommerce client - a China-based
international fashion brand which has their online shop on
Tmall.com. The shop has been struggling to effectively increase
return on investment for digital marketing expenditures. Several
Tmall-owned marketing tools and sales promotions have been
tried and did show an increase in sales. However, using these
services cost the client a significant amount of money as these
tools are billed by amount of traffic driven. Therefore, the ROI did
not meet the company’s expectation.
The key to the question is how to target the right audience. Here
are the digital marketing strategies suggested by Digital Jungle for
use by the client to reach the most valuable audience:
 Content Marketing Strategy
Creating branded stories
 Social Media Strategy
Designing channel mix
Campaigns
Key opinion leaders and brand partners engagement
 Search Marketing Strategy
SEO and SEM for Baidu
// Page 10
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You now have all the key information
for opening and developing your e-tail
business on Tmall. Why not contact
Digital Jungle for further digital
marketing support?
About Digital Jungle:
We are an Asia-based content marketing agency. We
create high-impact content that combines brand
strategies, relevant market data and expert insights into
branded stories and campaigns. We package, publish and
distribute this content to maximize reach, exposure and
brand development.
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