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Published August 12, 2020
Published August 12, 2020
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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.

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 question 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/ 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.

There are also distributors and retailers that will bring newer brands to market on Tmall/ 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.

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.