- Tmall is the largest B2C platform in China with over 500 million registered customers
- Tmall has over 50% market share of China’s B2C e-commerce business
- Success of brands on Tmall is driven by strong a brand integrity and a “Flagship Store” approach
“As retailers and brands frame their strategies, they can’t minimize the importance of Tmall, the dominant site where the majority of China’s B2C purchases take place.”Alibaba generated revenues of USD $270 billion in 2013, and shows strong signs of continued growth in 2014. On the most recent “Single’s Day”, the Chinese equivalent of Black Friday or Cyber Monday, sales on Tmall and Taobao topped USD $5.75 billion in a single 24-hour period – an 80% growth over the previous year’s event.
How did Tmall become so popular?Tmall is an offshoot of another successful Alibaba e-commerce platform – Taobao. The key difference between Tmall and Taobao is that while Tmall is a B2C platform, Taobao is C2C (think of it like the difference between Amazon and Ebay). Tmall was set up largely because consumers felt more comfortable buying goods from a company directly rather than from an individual. Also, it was found the vast majority of the revenue from C2C sites (96% in 2012) was from the sales of new items – not second-hand. Thus a key driver for Tmall’s success is brand integrity. Only the brand owner or authorized dealer may operate a Tmall store. Tmall allows brands to manage their own sales, product offerings, and branding in Chinese e-commerce. There are a few key differences between Tmall and popular western online marketplaces. The most noticeable difference for retailers is the existence of “Flagship Stores” on Tmall. If a brand like Nike runs an Amazon storefront, there is not much aesthetic difference between Nike’s Amazon storefront and the rest of Amazon (See: Nike on Amazon). On Tmall, Nike’s Flagship Store is closer to a standalone website (See: Nike on Tmall).