Before we dive into Tmall Global, let’s first take a step back and have a look at what’s happening in the broader industry. As western retailers seek out new markets to offset the global standstill, China provides an attractive proposition. For newcomers, Cross-Border eCommerce (CBEC) offers the most convenient route to market.
Compared to General Trade Registration (GTR), CBEC products can be launched:
Before we continue, it’s important to point out that CBEC only represents roughly 10% of total eCommerce sales in China. Furthermore, goods cannot be listed in physical retail locations, or domestic eCommerce platforms. As such, for businesses who are serious about long-term China growth, GTR should be on the agenda. Leaping from Tmall.hk to Tmall.com has been known to result in a 7-10x boost in brand exposure and sales. Furthermore, we’re seeing indications that animal testing requirements may be relaxed in the future. As such, GTR may soon become feasible for cosmetics companies which are ethically opposed to undertaking animal testing, as is presently required to sell in China.
With a market valuation of ¥415 billion (USD$58B), CBEC provides a vital stop-gap. Businesses can ‘test the market’ inexpensively to see which products are worth GTR investment. For businesses who understand the market, Tmall Global is the ‘holy grail’ of CBEC platforms.
After their purchase of Kaola in 2019, Alibaba is emerging as the dominant force in China’s CBEC space with a 52.5% market share. While Kaola boasts a slightly higher CBEC market share than Tmall, their direct-purchase model relies heavily on price discounting. So, while Kaola is a powerful sales engine not to be dismissed; Tmall Global’s marketplace model offers greater esteem and brand-building advantages.
A listing on Tmall Global (tmall.hk) means your products also appear on Tmall’s domestic platform (tmall.com). This has clear marketing and exposure advantages. Notably, because Tmall is China’s premiere B2C platform with 500 million users and a 61.5% total market share. Furthermore, all Tmall products are also listed on Taobao, Alibaba’s C2C marketplace with 666 million monthly active users.
RooLife Group is an accredited Tmall flagship store operator. We are your Alibaba operations team. We have the in-house capabilities to plan, register, build, operate and grow your Tmall flagship store.
RooLife strongly recommends undertaking a degree of market research before launching on Tmall. This will enable you to optimise your STP strategy and marketing mix; hence maximising your ROI and helping you to avoid costly errors.
Product selection is a key early consideration early on in the piece. Your existing hero SKUs may enjoy a slight advantage here, due to their established domestic presence and availability to daigou. However, brands frequently discover that their top sellers in China differ vastly to local markets. This is most obvious for food and beverage categories. It’s no secret that Chinese consumers frequently show preference for exotic flavours, such as durian, dragonfruit, pomelos, goji berries, macha and red bean.
Big data crawls are a great option to quickly identify popular formats, volumes, flavours, brand messages etc. The Tmall crawl data next to this paragraph summarises monthly orders by price for a niche alcoholic beverage segment. Over this month, 330ml units accounted for 72% of sales. Six-packs were by far the most popular bundle option at nearly 60% overall. Isolating 330ml six-pack orders by price, you can immediately identify key pricing guidelines for your product, and avoid falling into traps.
Each month, Tmall hosts a number of small-medium sales events. Generally speaking, they’ll give you 1-4 weeks notice depending on the size of the promotion. After receiving notice, you may have one-seven day(s) to decide whether or not to participate.
RooLife Group generally utilises three distinct price points to manage Tmall pricing strategies.
Inventory forecasting is a major part of RooLife Group’s monthly work. At any given time, you must be at least three months ahead on your inventory planning. The process is complex for a number of reasons:
One way to address these challenges is to set a simple ROI target for your KOLs and/or sales initiatives. So, for a target ROI ratio of 1.5, you could expect a KOL to generate $1.50 in sales margin for each dollar spent on them. RooLife’s KOL database includes hundreds of influencers who have been trialled and tested for ROI.
China’s digital ecosystem has evolved in such a way that eCommerce platforms fulfil many of the functions westerners rely on Google or branded websites for. Furthermore, businesses can’t simply open a store and expect to see an immediate commercial profit from their investment in Tmall. As such, Tmall should also be viewed as a tool for raising exposure and building brand legitimacy.
There are three key pathways for driving traffic to your Tmall Global store:
AliMama is Alibaba’s full-service marketing insights and management platform. The add-on service provides store operators with various tools to undertake display marketing, search marketing, real-time product bidding, commission-based promotions and various other tools. Alimama enables merchants to maximize traffic and ROI across all of Alibaba’s affiliated channels. It leverages Alibaba’s big-data ecosystem to maximise efficiencies and optimise campaign delivery. Alimama offers a suite of marketing tools and services. Some of the tools we leverage the most include:
Zhizuan (Diamond Booth) is a bid-based advertisement and banner placement service. You can push targeted ads to PC, mobile and/or tablets across a Alibaba’s extensive digital-ecosystem. This includes on Sohu, Taobao, Tmall, iQiyi, Sina and many other platforms.
Express train is a keyword-bidding service which can push your brand/products to the top search results within Tmall/Taobao. The tool also allows for laser-like focus: targeting consumers at specific times and in certain geographies.
DMP is Alibaba’s big-data-driven target-marketing and insights service. It supports you to execute precise, measured, multi-platform campaigns. DMP procures and analyses consumer information across a wide variety of data-points. These include interests, demographics, locations, shopping history etc.
Pinxiabao is a media-purchasing retargeting tool. It enables established, high-performing Tmall merchants to create larger, more prominent ads and banners. These ads are built on keywords which must be related to the brand.
The prevalence of counterfeit and low-quality goods in China is no secret. As a result, product reviews are seen by many consumers as almost a civic duty. The Tmall platform itself has evolved to follow suit. For example, Tmall’s ‘Ask Anyone’ function instantaneously matches you with a previous buyer of the item you’re browsing, enabling a live-chat review.
Upon purchasing from our stores, our customers are encouraged to connect with our self-operated WeChat accounts. WeChat groups are in effect, China’s most effective direct marketing channel. Like organic search marketing, email direct marketing (EDM) never really took off in China.
WeChat Groups enable you to interact directly with your customers. You can send them recipes, incentivise positive feedback with vouchers and coupons, promote new products and campaigns etc. Most importantly though, WeChat groups enable you to turn regular consumers into Key Opinion Consumers (KOCs). Rewarding loyal customers with free gifts and coupons will more often than not result in compelling, positive eWOM. For example, the following video was generated via a KOC.
Article compiled by Alexander Kelso for RooLife Group, May 2020