by Ker Zheng
Tmall is China's largest B2C brand e-commerce platform, and its cross-border e-commerce subplatform Tmall Global is perfect for brands who want to set up an e-commerce presence in China without a legal Chinese entity.
That being said, not every brand can get on Tmall and clients often come to us asking questions like "can my brand get on Tmall?", and "what kind of sales numbers can I expect on Tmall?".
While results vary from brand to brand and there are a lot of factors that can affect brand sales on Tmall, there are a few things that you can do to gauge Chinese demand for your products.
Below we break down how you can "audit" your brand and assess your chances for success in China's e-commerce market.
Market Opportunity Analysis
The first thing you have to ask yourself is how big the market opportunity is for your particular subcategory and how intense the competition is.
For example, you could choose a highly niche subcategory like high-end shampoo for dogs and there'd be less competition, but the market opportunity would be limited and your brand could hit a ceiling with sales. On the other hand, you could try to sell a new milk powder brand for babies but there are already many incumbent brands in that space selling at attractive prices.
Also you have to keep in mind the switching costs for a particular subcategory - for baby milk powder and food products, parents are less likely to stray from the main brands because of fear that the quality could be shoddy and potentially harmful.
The switching costs for baby apparel, however, are much lower because children always outgrow their clothing and parents are always looking for new items to outfit their children with. Such factors like these vary from category to category, and you have to ask yourself whether the potential market opportunity is worth the risks and investments required.
Download our 53-page guide for global brands on Tmall Global. Learn about all of the requirements and options for merchants, as well as tips and tricks on how to drive traffic and sales.
Brand Reputation Analysis
Now let's move to the brand audit. Contrary to popular belief, a new brand cannot simply launch a store on Tmall just because it wants to. There's an extensive application and vetting process, and Tmall staff use all sorts of algorithms and tools to see how much sales your brand can generate in the first year.
At the end of the day, Tmall and the TPs (Tmall partners) involved are focused on growing GMV, or gross merchandise value (total value of sales), because their own KPIs are dependent on GMV and their own revenues are derived from sales commissions. If your brand has no brand awareness then first year GMV will be very low because it takes a while to grow a brand and for customers to get comfortable with a new brand.
In short, Tmall wants foreign brands that already have some brand awareness in the China market.
But how does a foreign brand build awareness in China if it does not have any official sales channels in the market?
This questions perplexes a lot of foreign brands that begin to explore the China market for the first time.
The truth is that a lot of foreign brands first build their brand awareness amongst the Chinese influencers and gray-market daigou sellers living abroad in the US, Australia, UK, etc.
Many of them tend to be students that started blogging about their life abroad on Chinese social media platforms or started bringing back imported products to China to sell at a profit through shops on WeChat/Taobao.
Some of these gray-market daigou sellers are even influencers on their own and can have immense sway in nudging their loyal customers towards a new brand. Many brands often work with them to build brand awareness in China before they officially launch a store on Tmall.
And so there are a few ways to gauge this brand awareness, which we list below:
1. Brand search on Taobao
Check Taobao and multi-brand retailer stores on Tmall/JD.com to see if there are any daigou or retailers/distributors bringing your product back to China and selling them online. Taobao is a C2C peer marketplace where just about anyone can open a store, and so it's become the main platform for gray-market daigou sellers to post their goods.
The below screenshot shows search results for a UK jewelry brand, Missoma. Missoma does not yet have an official China e-commerce store, but daigou resellers are selling the products on Taobao. This indicates that there is some initial brand awareness and that the brand might be ready to launch its own store on Tmall.
Missoma search results on Taobao
There are also distributors and retailers that will bring newer brands to market on Tmall/JD.com if they think the brands have potential. Below are Tmall search results for the pain relief brand Panadol. While Panadol does not yet have an official Tmall store, it's being sold by Australian pharmacy retailer Chemist Warehouse. The sales numbers don't look high, so maybe the brand isn't that popular in China just yet.
Panadol search results on Tmall/Tmall Global
2. Brand search on Baidu
Another tool to use is Baidu's search engine, which turns up search results from different social media, e-commerce, and content websites to see if there have been any social commentary or PR surrounding your brand.
The below results show that Missoma is present on a few affiliate content and deals websites for imported products. This means that there is some brand awareness in the market. If you click on the second link, it'll show that Missoma is selling through an affiliate channel, 55haitao, meaning that the affiliate website directs traffic and sales to Missoma's UK website in exchange for a sales commission. This means that even though Missoma does not have an official China presence, it can still reach Chinese consumers through affiliate channels.
3. Brand search on Chinese social media platforms
Lastly, you should do a search for your brand on the three main social media platforms: WeChat, Xiaohongshu, and Weibo. The posts and articles on these platforms will give a taste of what consumers and influencers think about your brand, and whether or not their perception of your brand is headed in the right direction. The below posts show that there are a number of influencers writing WeChat articles about Missoma (left) with over 100,000 views, and there are many relevant posts on Xiaohongshu (right) as well.
Posts about Missoma on WeChat (left) and Xiaohongshu (right)
The below screenshots from Weibo show product reviews and even videos that discuss the Missoma brand. Weibo has the widest reach for influencers because it's more of a public platform; media platforms, influencers, and celebrities are all very active on Weibo. WeChat, on the other hand, prevents strangers from following and viewing user profiles if they are not connected.
An image post (left) and video post (right) about Missoma's brand on Weibo
If you've done all of the above and found that your brand has some recognition in China's digital ecosystem, then your brand might be ready for Tmall and you can consult a TP (Tmall partner) or applying directly via Tmall's English-language portal.
What Do I Do if I have Zero Brand Awareness in China?
If you've done the above three steps and found little to no search results for your brand, then chances are your brand is not ready for Tmall.
What you CAN do, however, is start to build brand awareness by working with digital marketing agencies, daigou resellers, and influencers in China.
These people will help create buzz on Chinese social media platforms and start to shape public perception of your brand. Once there's enough content on your brand out there, people will feel more comfortable buying your products. After about a year or so of building brand awareness, you can then come back to the option of selling on Tmall.
In short, brand marketing with WeChat, daigou, influencers, etc. can take your brand's awareness in China from zero to one, and Tmall can take it from one to 100.
But if you're a brand that absolutely HAS to have a sales channel before investing in marketing in China, there's a few things you can do:
1. Link up with affiliate marketing channels where content posts on websites such as SMZDM, 55haitao, Linkhaitao, Dealmoon, etc. drive sales to your English website in exchange for a commission. This is not a bad option, but affiliates have to have confidence in your brand and there may be logistics issues in shipping from international warehouses.
2. Set up a WeChat shop. This is a possibility, but in general it is still hard to drive sales to a WeChat shop without any brand awareness. The ROI on advertising and even influencer marketing on WeChat is still comparatively low and many people do not feel comfortable making e-commerce purchases on WeChat.
3. Approach an existing multi-brand shop on Tmall, JD.com, etc. and ask them if you can sell on their shop. The downside of this option is that they may charge a very high fee for this (as much as 70% of sales), and you still need to invest in brand marketing outside of Tmall to build brand awareness.
1. Brands have to take a serious look at their subcategory and where they fit in in the China market if they want to launch on Alibaba's Tmall platform
2. Contrary to popular belief, Tmall prefers brands that already have some awareness in the China market, mostly through Chinese influencers or daigou resellers living abroad who bring back the products to resell on Taobao. Brands can do a search on Taobao, Baidu, and Chinese social media platforms to assess how much awareness there is in the China market
3. Brands with zero brand awareness amongst Chinese customers should invest in brand marketing for at least a year before selling on Tmall. Those are who are determined to set up an e-commerce channel before investing any amount of money in marketing can either sell through affiliate channels, WeChat, or existing multi-brand stores on Tmall, JD.com, etc.