Tmall is investing in cross-border e-commerce. In 2018, China’s retail imports of cross-border e-commerce reached $11.7 billion, a 39.8% rise year on year
China’s e-commerce market is the largest in the world and already represents more than 40% of the total global e-commerce spending. Even if Today there are also some good local brands in China, Chinese people has still a kind of adoration for abroad goods. Especially when it concerns healthcare, baby products, food supplements or skincare products, Chinese people prefers to turn towards foreign products.
Furthermore, Chinese consumers are becoming more aware of international brands, which reflects in the increased demand for overseas products. In March Tmall Global announced two initiatives for foreign merchants exporting goods to China. And now, after two months, Hanzgozu based e-commerce giant reported new business policy first good feedbacks in June.
Tmall’s new initiatives will make it easier for smaller players to export their wares to China. The two initiatives announced were the Centralized Import Procurement (CIP) and Tmall Overseas Fulfillment (TOF) solutions. Why is Tmall developing these cross-border initiatives?
As China’s biggest cross-border e-commerce platform for nearly five straight years with 32% of the market share, Tmall Global’s has retained its leading position by sourcing the latest and most-popular overseas products for Chinese consumers. Tmall Global currently hosts more than 20,000 brands in over 4,000 categories from 77 countries and regions. As their spending power climbs, Chinese consumers are increasingly looking for high-quality products from reputable international brands. It means that cross-border e-commerce is growing rapidly and Tmall needs to meet demand. In 2018, China’s retail imports of cross-border e-commerce reached 78.6 billion yuan, about 11.7 billion U.S. dollars, and a 39.8% rise year on year.
The Centralized Import Procurement solution aggregates goods in Alibaba’s six global procurement centers, and enables brands to sell through both online and offline channels.
As imported goods demand is increasing, all the major platforms are intensifying their scrutiny of the cross-border supply chain. Thus Chinese e-commerce ecosystem is becoming more challenging. Local Chinese tech giants such as Alibaba or JD still dominate the sector but currently, there are a lot of e-commerce platforms in China, almost more than a dozen, that covering every product category.
© Alizila.com. AI technology was fundamental in the success of the Alibaba’s “Single Day”. Cainiao Network used robots with automated driving to process 1bn orders.
Among them Koala is Tmall Global’s number one competitor in the cross-border space, holding a 24.5% share of the market. Due to not to be overthrown by Beijing based competitor, Tmall have to reform its own business. One of Alibaba’s strongest point is its developed AI based logistic network. Cainiao plans to expand its network of warehouses worldwide, then due to achieve this goal, Alibaba needs to provide a better logistics solution for smaller merchants selling more niche, long-tail products.
Tmall Overseas Fulfillment solutions allow brands to store their goods in TOF warehouses on a consignment basis, while they wait to be shipped to Chinese consumers buying on Tmall Global.
As reported by Alizila, the TOF allows brands to place their products at the nearest Tmall Global fulfillment center for sale on the platform. As part of the TOF solution, the team provides brands with marketing advice and tools to help boost awareness. The TOF solution allows for quicker fulfillment and reduces shipping costs as the goods can be packaged with other merchants’ goods in bulk, instead of being shipped over to China one by one.
Additionally, many merchants have issues with supplying enough inventory for the large China market, where demand can spike and fall very quickly. This approach allows brands to fine-tune their product selection for the market without the need for a physical retail presence in China. Currently, TOF is available in the US, Japan, South Korea and will expand into Europe later this year.