Tmall was launched in 2008 by Taobao as a business-to-consumer (B2C) platform operating from within the Taobao website. It differentiated itself from Taobao as the latter is a consumer-to-consumer (C2C) platform.
Tmall Global was introduced in 2014 and its inception proved to be an important step for Alibaba as it meant they were now able to introduce cross-border e-commerce to the China market. It is now China’s largest marketplace for cross-border B2C and as of 2017, over 16,500 foreign brands with 3,700 different types of products are sold on Tmall Global.
Difference between Tmall and Tmall Global
To register with Tmall as a merchant, sellers would have to register local China entities and relevant products with the authorities. With Tmall Global, sellers need not have a registered company within China and products sold via the platform are imported directly from overseas.
Tmall Global has their own set of requirements when it comes to recruiting overseas merchants to sell on their e-commerce platform. Generally, their main focus is to enlist brand owners. With this in mind, in order to meet the most basic requirements to sell as a foreign merchant on Tmall Global, you will have to:
- Have a registered corporate company outside of China.
- Either be the brand owner or authorized distribution agency. If not, possess the brand purchase voucher.
- Sell authentic products.
- Acquire or already possess relevant stock certificates.
Before you launch your e-shop and officially start selling your products, the following operating processes have to be fulfilled in compliance with consumer laws in China.
Products: all products originally produced or sold overseas must be authentic with a original certificate of origin. They also have to clear international customs in China and the Tmall Global security.
Labelling: product descriptions and all labels must be in Chinese. The international metric system must be used for units of measurement.
Webpage customer support: customer support must be in Chinese.
Logistics: either through direct delivery or delivered from a bonded warehouse in China, orders should be sent out within 120 hours.
After sale service: set locations must be established to offer after sales service.
When selling on Tmall Global, merchants are not required to set up a payment gateway. Payment is made to the seller via Alipay, Alibaba’s localised payment processor.
Funds are transferred directly to your local bank account through Alipay which means you do not require a China bank account. However, you will need to check whether or not your bank is compatible with Alipay.
Cost of setting up a Tmall Global store
A security deposit is required before you can set up your store on Tmall Global. The amount varies as follows: for brands that have successfully registered a ® trademark, the deposit is 50,000 RMB; for brands that hold a temporarily unsuccessful ™ trademark, the deposit is 100,000 RMB. This sum will be refunded should you close your store in the future.
Any compensation that may be needed to be paid to customers in cases where the merchant breaches any terms and conditions of the Tmall Global Merchant Service Agreement or other policies of Tmall Global may be deducted from this security deposit.
Depending on the product category that you sell in, an annual fee will be incurred. This ranges from $5,000 to $10,000. If you sell products that belong to different multiple categories, only the highest amount will be paid.
Again, depending on the product category of any products that are sold, the commission paid to Tmall Global is calculated as CategoryCommissionRate% x (Product Price + Logistics Cost). The category commission rate may be 2% to 4%.
Alipay service fee
There is a 1% service fee applied to each transaction for using Alipay.
How long will it be before my store is set up on Tmall Global?
The regular processing time is known to be between 4 to 8 weeks, including opening an Alipay account, setting your product prices, listing your products, setting up logistics and after sale service.
It may seem like a lot to take in when it comes to setting up a Tmall Global store to sell to Chinese consumers. However, it is important to know that Tmall and Alibaba offer a lot of support and assistance to merchants in the process of setting up their store, and also in the running of operations.
Additionally, our expert team at Didadee is also available to help with any further queries should you need any more information on Tmall Global.