How to Be Successful on Tmall.com

Chinese B2C eCommerce Strategies

This Digital Jungle new e-book aims to help Non-Chinese brands to understand the Chinese B2C eCommerce landscape, and to provide tactical and practical solutions for conquering the Chinese online shopping market.

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Introduction .……………………………………………………………3

An Overview of the Chinese B2C Sector.………………………4

Leading Chinese B2C eCommerce Websites.…………………5

Why Do We Recommend Tmall?.…………………………………7Key Facts About Tmall………………………………………….7Other Vital eCommerce Information………………………8

How to Differentiate from the Competition? - Digital Marketing Strategies…………………………………….10

Table of Contents

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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

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.

Introduction

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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”.

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Source: China Daily, 2013

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).

An Overview of the Chinese B2C Sector

92% 86%77% 70% 65% 59% 54%

8% 14%24% 30% 35% 41% 46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013e 2014e 2015e

Pro

port

ion

of

Sale

s R

even

ue

(%)

C2C B2CSource: iResearch Consulting Group, 2013

The Rise of China’s B2C Sector

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Leading Chinese B2C eCommerce Websites

57%

20%

5%

5%

3%

2%1%

1%1% 1%

4% Tmall

360buy

Suning

Tencent B2C

Amazon.cn

Dangdang

Gomei

Vipshop

Yihaodian

Vancl

Others

Ch

ines

e B

2C M

arke

tP

enet

rati

on

Source: iResearch Consulting Group, 2013

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.

Tmall.com

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JD.comJD.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.comSuning.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:

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Key Facts About Tmall 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:

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Why Do We Recommend Tmall?

26%

37%

18%

9%10% 18-25

25-3131-3636-41

Source: iResearch Consulting Group, 2013

Tmall features:

A wide variety of productsHigh quality brand productsSolid reputation and credibilityLarge traffic volume

Many well-known global brands have opened up e-shops on Tmall, including as Best Buy, Marks and Spencer, The North Face and Ralph Lauren.

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Other Vital eCommerce Information• AlipayAlipay 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.

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• A Marketing Platforms with Multiple FunctionsAlibaba 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.

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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 TmallCouponPresaletime-limited discount

Free deliveryGiveawaysGroup 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 mixCampaigns Key opinion leaders and brand partners engagement

Search Marketing StrategySEO and SEM for Baidu

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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?

Website: www.digitaljungle.com.cnFacebook: https://www.facebook.com/digitaljunglecnLinkedIn: http://www.linkedin.com/company/digital-jungleSlideshare: http://www.slideshare.net/digitaljungleTwitter: @digitaljunglecnSina Weibo: Digital_Jungle

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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