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Before Tmall Global, accessing China’s ecommerce market was extremely costly. Perhaps the most expensive market in the world to tap into.
You had to register a local company, open a bank account and ship products to a local warehouse.
For Startups and Small businesses, this was not even on the table.
But Tmall Global changed everything.
Once Tmall Global opened up in 2014, American and European ecommerce companies could start selling directly to Chinese consumers, on one of the China’s largest and most visited online marketplaces.
All this while getting paid in US dollars or Euros, directly to a local bank account.
In this guide, you will learn everything you must know about the difference between Tmall and Tmall Global, Alipay payments, order fulfillment and both fixed and flexible costs.
What is Tmall.com?
Tmall.com is an ecommerce platform owned by Alibaba Group in Hangzhou. It started out originally as Taobao Mall, and a premium alternative to Taobao.com.
For the record, Taobao.com is also owned by Alibaba.com, and by far the largest ecommerce platform in the country.
So why did Alibaba start Tmall?
As said, Tmall.com launched as a premium ecommerce platform, where online shoppers can buy brand name products from within China, but also internationally.
What is Tmall Global?
I heard about Tmall Global for the first time in 2015. Two friends from my home country, Sweden, had exported food products for a couple of years, to wholesalers in Zhengzhou.
Now, they had launched a store on Tmall Global, allowing them sell products from their warehouse in Sweden – directly to consumers in China.
And, get paid in the local currency. All paid to their bank account.
At first it sounded too good to be true. But let’s go back to the origins of Tmall Global.
Alibaba launched Tmall Global in early 2014, which allows overseas companies to sell products directly to consumers in Mainland China.
This might not sound like much, but it was, and still is, a complete game changer in the world of China ecommerce.
Tmall Global allows companies in, for example, Europe and America to sell products B2C to Chinese consumers.
And, as I mentioned, get paid in their own currencies.
This can be achieved without even having a local Chinese company, or bank account. Previously, selling online in China required a local company entity, office, employees and bank account.
Not to mention the capital controls, that made it hard to take profits made in RMB out of the country.
This is out of reach for many startups and SMEs.
Why should I not just open a Shopify store for the Chinese market?
China is a very marketplace focused country. In cities like Shanghai, you will find entire shopping malls specialized in a single product category.
Chinese shoppers also take these habits when they go online. Unlike us westerners, they don’t search for individual brands online, but go to one of the established marketplaces.
This includes Tmall, Taobao and JD.
On Tmall, you get traffic and sales on day one. Setting up an independent online store in China can be done, but it’s going to cost you a lot more in marketing.
What is the difference between Tmall and Tmall Global?
Tmall Global doesn’t require that you set up a Chinese company or bank account. This was mandatory, if you wanted to sell anything to Chinese consumers before Tmall Global was opened.
In addition, you don’t need to keep the products in China.
Tmall.com is opened to foreign invested businesses. That said, you do need to register a company in China, and setup a local bank account – a process that can easily take 4 to 8 months (trust me, I have personal experience).
Not to mention that it will cost you at least $5,000 to $6,000. Sometimes twice that.
And, you must keep stock in China.
Tmall Global is much easier to get into, compared to ‘regular Tmall’.
Can anyone start selling Tmall Global?
The short answer is no. Tmall Global sets the bar high, and the approval process takes 4 to 8 weeks. Assuming you meet some of the following criteria:
1. You must prove that you own the brand (trademark) or have a license from the brand owner
2. You need a logistics plan
3. You need “sufficient assets”
4. Prepare documentation and prove that the products comply with Chinese product regulations (i.e., CCC or CIQ). Click here for a complete list of documents.
Read these articles to learn more about product certification in China:
- Products That Need CCC Certification in China: A Complete Guide (Link)
- CIQ – China Inspection and Quarantine: The Definitive Guide (Link)
The requirements differ depending on the type of store you intend to open. At the time of writing, you have these alternatives:
- Flagship Store (Brand owners only)
- Flagship Store (Marketplace)
- Authorized Store (Requires authorization from brand owner)
- Speciality Store
In short, Tmall Global is all about selling authentic, high quality, brand name goods. This is also what China wants right now.
Can I sell any type of product on Tmall?
Tmall.com is strictly B2C, so everything that falls into the B2B category goes away. Tmall Global is hosted on a Hong Kong domain, Tmall.hk.
For example, you can sell products in the following categories:
- Skin care
- Beauty tools
- Baby food
- Baby care
- Baby clothes
- Household appliances
- Kitchen utensils
How much does it cost to setup a Tmall store?
Before you can open the store, you need to pay a US$25,000 security deposit. Notice that this is need a fee, but a deposit. The money will be refunded if you decide to close the store.
Tmall may also deduct from the security deposit, to compensate customers.
Tmall charges a fixed yearly fee, based on the product category you want to sell in. Most categories cost $5,000 to $10,000 per year. A complete overview is provided on this page.
If you want to sell in multiple categories, you don’t need to pay more than one category fee. However, you will pay the highest amount.
For example, if Category A is $5,000, and Category B is $10,000, you will pay a total yearly fee of $10,000.
In addition to the yearly fee, Tmall is also charging a commission based on the order value.
It’s calculated as following:
Tmall Commission Fee = XX% x (Product Price + Freight Cost)
The commission depends on the product category, and normally varies between 2 to 4%.
Alipay service fee
In addition, Alipay, which is the payment processor for Tmall.hk, charge a 1% service fee.
If you sell a product for 1000 RMB, you will therefore pay a transaction fee of 10 RMB. Simple maths.
This sounds really expensive. Is there any other way to start selling on Tmall?
Yes, you can partner with a Tmall agent, that let you use their existing store to sell your product.
Thus, you don’t need to come up with the security deposit and yearly fee by yourself, but expect a higher transaction cost per sold product – as the Tmall agent must ultimately cover their costs too.
That said, it’s a great way to test the Chinese ecommerce market without investing too much upfront.
How long does it take before we can start selling?
As stated on Tmall.com, the normal processing time is 4 to 8 weeks. However, this includes everything from opening an Alipay ready bank account, to product pricing, product listings and more.
That makes Tmall a bit different, is that they offer a lot of support to overseas sellers, to help bridge the gap to the Chinese ecommerce market.
What kind of documents do I need to apply?
For starters, you need to have a company, and present some sort of business license or company certificate.
You must also print and sign the Tmall service agreement, provide ID of the director and a recent bank statement.
What makes Tmall unique is the emphasis on branding. Tmall only wants brand owners, and sellers that hold licenses from the original brand, to sell on the Tmall Global platform.
Thus, they also require either of the following:
a. Trademark registration document (registered in your country)
b. Brand licensing agreement (with brand owner)
Do I need to translate the product descriptions to Chinese?
Yes, you need to provide product listings translated to simplified Chinese (not traditional Chinese) for your Tmall Global store.
Don’t worry. You don’t need to get a PhD in Chinese literature. Simply hire a translation company like this one, or find a freelancer on Upwork.com.
How do I store and ship items to our Chinese customers?
When selling on Tmall.com, you must both have a Chinese business license and the product stock within the country.
That is, however, not the case when it comes to Tmall Global, as you are allowed to sell products from your current base.
This will of course result in longer delivery times, but is still an excellent way to test the Chinese ecommerce market.
Keep in mind that Chinese shoppers are not that sensitive to long delivery times, as overseas products have long considered to be more valuable.
That still remains the case.
How do I get paid when selling on Tmall?
You get paid via Alipay, which is Alibaba’s (the owner of Tmall) own payment processor. As such, you don’t need to set up your own payment gateway.
Tmall shoppers can easily pay the products using their UnionPay cards, or even cash on delivery (which is very popular in Mainland China) – while Alipay takes care of the rest.
And the beauty of this is that you don’t even need a Chinese bank account (not that you could get one without a Chinese company anyway).
Instead, Alipay transfers the funds directly to your local bank account. This might not sound like much, but given that China still implements strict capital controls, it’s what makes Tmall truly unique.
Just remember to check if your bank is Alipay compatible. If not, you need to look for a local bank that is.
What is the difference between Tmall and Taobao?
As said, Tmall originated as the premium branch of Tmall. The original name for Tmall was actually Taobao mall.
And, both are owned by Alibaba Group, founded by Jack Ma.
Yet, they are very different.
Taobao.com much more focused on local brands and sellers, while Tmall has more of a premium brand.
As an American or European company looking to sell on one of Alibaba’s platforms, Tmall is your only serious option.
How can you help me take the next step?
Do you need help with CIQ, CCC or setting up your first Tmall store? We work with leading consultants and service providers – that can help you through every part of the process:
a. CIQ, CCC, labeling and laboratory testing
b. Shipping and customs
c. Selling on Tmall, JD Worldwide & other platforms
d. Finding retailers and distributors for your products
What are you waiting for? Click here to request a free quotation.