Your Guide to China E-commerce: Tmall Global, Kaola, and JD Worldwide
Thinking how you can build your e-commerce page via Chinese online malls?
Tmall Global, Kaola, and JD Worldwide are some of the popular cross-border e-commerce platforms that offer overseas companies options to sell their products to Chinese consumers.
Alibaba’s Tmall Global is one of the largest e-commerce platforms in Mainland China. The company’s target market are international brands. Most of them are big, deep-pocketed brands, and Tmall Global has a set of requirements before you can start.
The e-commerce market is ripe and ready. As of this writing, there are 610 million online shoppers, according to China Internet Watch 2018 report. And 593 million of those online shoppers are using mobile devices to shop. According to Forrester, the online retailing market in China is expected to reach $1.8 trillion in 2022. Alibaba and JD.com are the two leading e-commerce giants in China.
Explore these e-commerce platforms and see which one suits your company’s status, goals, and plans in the future.
Alibaba’s Tmall Global
Alibaba’s Tmall Global has the largest user base when it comes to online shoppers in China. But the company has stringent qualifications for foreign brands who want to sell in this platform. Tmall Global has a by-invitation-only policy for eligible brands.
Most of the famous and on-demand merchandise among shoppers are baby food, healthcare, and luxury items in the United States, Germany, and Australia. Meanwhile, skincare and cosmetics from South Korea and Japan are the inklings of young female shoppers.
Things you need to know:
- To qualify, you must meet the retail and trade qualifications overseas
- You must be a brand owner
- A corporation operating more than two years with annual sales of more than $10 million
- The process is quite cumbersome as you need to work with an authorized agency
- You must be the one to map out your logistics plan
- You’ll be the one to ship items straight from your warehouse to China
- Alibaba doesn’t have its own logistics system. But it can recommend logistics partners and companies
- Expect to cash out around $2,000 up to $24,000 for your online store
- Pay security deposit up to $25,000
- Technical fees are around $5,000 up to $10,000
- Commission fees around 3%-7%
Kaola is another e-commerce platform, which is also getting more attraction from foreign brands. While NetEase is known for its niche in gaming and email services, the company saw the importance of e-commerce these days.
According to the China Cross-border E-commerce Monitoring Report for 2019, Kaola accounts for 27.5% of market share, followed by Tmall Global and Dolphin.
There are 30 million registered on Kaola as of this writing. The platform focuses on selling food products, from health and wellness categories to baby food and more. Maternity and baby products are also on-demand and imported snacks.
Things you need to know:
- Application and entry to the platform is more lenient than Tmall Global
- Kaola owns big warehouses in China
- Facilitates quick payments
- To sell on Kaola, you can do it in two ways: sourcing cooperation (where Kaola will buy products from you directly) or third-party or flagship store (set-up online store and sell directly to consumers)
- If you set-up store, you must have legitimate documents and brand authorization to validate your corporate entity
- Have good credit standing
- You can apply via the website if you want to set-up your online d store
- Expect to cash out around $10,000 – $15,000 for the initial deposit
- Kaola takes a commission of about 2%-10%, depending on the product category
- Pay annual membership fee of $1,000
- Expect to cash out around $2,000 up to $24,000 for your online store (hire marketers, content writers and team to design it)
JD.com is the second largest e-commerce platform in the Mainland, which has a cutthroat competition against Alibaba’s Tmall.
With its global e-commerce platform, JD Worldwide, there’s a difference between Tmall and JD. Each one serves a different audience — shoppers on Tmall shop for cosmetics, food and beverages and clothes.
Shoppers on JD Worldwide will browse the platform to shop for home appliances and electronics. It has a robust logistics compared to Alibaba’s Tmall, which of course, on top of that charges slightly high commission percentage and fees.
Things you need to know:
- It offers flexibility for foreign brands and is more lenient when it comes to qualifications compared to Tmall Global
- Has a robust logistics network and systems, which makes the shipping more convenient on the seller’s side
- It supports WeChatPay, JD Pay, and bank cards
- Offers 4 different store types (brand flagship store; franchised store, outlet store, exclusive store)
- It has 7 fulfilment centers and 166 warehouses in 44 cities to expedite the shipping
- To qualify you must have complete documents to validate your corporate entity legally, public bank account
- You must be eligible and meet the requirements
- The top priority of JD Worldwide for sellers (if you’re selling the following: maternity and baby products, health and nutrition, food and beverages, shoes, cosmetics)
- For overseas companies, you must have registered capital of more than $76,000
- Security deposit is around $1,500 – $2,300 (depends on the product category)
- Technical fee around $150 (annual basis)
- Commission fees around 3-10% + 0.85% for the shipping services
Which is which?
Now that you have an overview of how each e-commerce platforms, it doesn’t mean that you’ll give it a go at once. You still need to do more research and work with a team who can help you assess your status and if it’s a workable plan.
There’s no guarantee that if you register or set up an online shop on Tmall Global, you’ll generate a ton of sales. Rarely that happens.
The secret lies in a solid marketing plan and strategies, especially on setting up the store, the content, localization and more.
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