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  • Interesting Question? Tmall or Tmall Global, who is a representative of China e-commerce to world?

    Post by : expatree
In China Alibaba group shows the strength on B2C e-commerce retail business thanks to his online weapon, taobao.com and tmall.com these two platforms. Take advantage of the benefits of cross-border e-commerce policy by China government, Alibaba soon built up another online platform, “Tmall Global” towards to worldwide audience. Not satisfied with the domestic leadership, a bigger ambition shows Alibaba is trying to connect the world and get occupied oversea market share as much as possible.
 
Unfortunately Tmall Global’s current achievement is below public expectation although Alibaba did a huge advertising investment on both local and foreign market. “Local registered entity is not required in China” such kind of idea sounds interesting for foreign brand supplier to have a tryout, but Tmall Global still faces a big challenge issue, in additional to the ambiguity fact data on its sales performance, not transparency at all. On the other hand, compared to Tmall domestic, Tmall Global is dreaming up “domination” situation in cross-border e-commerce business, and it’s too far away from this target, JD.com etc. and other small to medium platforms are carving up this new fast growing market against Tmall Global. Most foreign companies take a “wait-and-see” attitude towards to Tmall Global invitation.
 
There might be an interesting question, that how much difference gap between Tmall domestic and Tmall Global. It reports in 2014 Tmall domestic platform achieved 60.4% market share of B2C China e-commerce, however it has to be embarrassed that the total sales volume of Tmall Global does not exceed 5% of Tmall domestic volume even in Double 11 campaign.
 
Comparison on the hot product categories, obviously we find “Apparel/Shoes/Bag, 3C device and Household” these 3 are on the top of list in Tmall domestic; and Tmall Global seems have a different story, “Baby&kids, Cosmetics and Health product” indicated FMCG product is a majority shopping list to Chinese consumers. This huge gap of shopping behavior actually makes sense, local Chinese is suffering enough for food safety scandal such as “poisoned baby formula”, “unqualified cosmetics” and “fake advertising on health products” etc. The loss of confidence on local sales channel creates a potential market demanding for cross-border products.
 
Another big challenge is logistics solution for goods return issue in Tmall Global. As required all products cannot be sent back as long as it has been shipping out from bounded warehouse. That means brand supplier has to prepare a local physical place for storage purpose. Not limited to this problem, the returned goods cannot be resellable in a commercial legality way because it lacks of Chinese local qualification of products.
 
Again, amounts of Tmall Global visit traffic comes from Tmall domestic consumers because of “Tmall” reputation. Tmall Global consumers are used to make a DSR score (product description, customer support, logistic service) benchmark inline with Tmall domestic policy. It requires fast goods delivery speed and refund speed no matter this is cross broad business or not, lower competence in logistics capability of Tmall Global cannot meet consumers’ expectation. For example, in case of “apparel & shoes” supplier, the average goods return rate is about 17-20%, how to handle increased workload in Tmall Global becomes a big headache, until now Tmall Global, Alibaba himself has nothing to do to solve this issue happened in cross-border e-commerce business.

Go back to question, we have to admit Tmall Global is still in startup stage, or in another word cross-border e-commerce business in China has to be more mature, not only foreign brand suppliers but also consumers expect improvement in all means. In addition, cross-border e-commerce business should mainly serve for "B2C" or "B2B", this will be argued by experts.

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Date:2016-07-08 11:37:54
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