First things first
There are 2 dominant players that outshine everyone else: Alibaba and Jindong represent 86% of the Chinese online market.
Alibaba: What is the difference between Taobao and Tmall?
Taobao and Tmall both belong to Alibaba and are accessible on the same link: Taobao.com Tmall is essentially a sub-group of stores from the vast Taobao catalogue. The reason Alibaba launched Tmall was to provide customers a safer place to shop by creating a new set of more restrictive rules for companies to register Tmall shops.
Taobao.com: Tmall is a part of Taobao
In practice, Tmall is home to big brands whereas Taobao is home to smaller brands and individual sellers.
Furthermore, Tmall also offers the option of opening cross-border stores under the brand 'Tmall Global'. These stores are registered using foreign business entities and typically ship products to customers from outside Mainland China. Cross-border stores are listed alongside other stores on Taobao.
Jindong, or JD in short, is the long time #2 on the Chinese market. It is accessible on JD.com Jindong is particularly strong in electronics as many customers perceive it as a more trusted platform for more expensive purchases.
So where should I open my store?
Both Alibaba and Jindong come with vast customer bases and the question of where you should open your store comes down to the costs of opening and running a store on these platforms. The costs will vary depending on the category of products you’re selling.
Let’s take a look at what the costs for opening a store with cosmetics:
50 000 - 500 000 CNY *
0 - 30 000 CNY **
* Depending on the type of store: (Flagship, Speciality, Cross border) and trademark category (’TM' and ‘R’)
** Depending on annual sales volume
Opening a store on Taobao is by far the cheapest option which makes it suitable for smaller and medium size brands that haven’t yet fully committed to investing larger sums on the Chinese market.
Tmall and Jindong offer more ‘prestige’ as they are viewed as more trustworthy by the customers.
Picking the right platform
(1) You are a smaller brand:
Start by opening a Taobao store and invest your resources into creating proper Chinese brand identity and storytelling first. Once all is up and running you should consider opening Tmall and Jindong store.
(2) You are a larger brand:
Create presence on both Tmall and Jindong from the get-go. This will require larger up-front costs and a professional partner to create your presence without any initial hiccups.
There are other platforms
Many smaller brands adopted approach targeting customers on niche platforms. This comes with its own set of pros and cons.
WeChat Store is perhaps the most well known alternative, but there are also other options, such as own e-shop, Little Red Book and many more.
A WeChat Store or own e-shop will let you take full control of your sales channels - no deposits and fees required. While this sounds attractive to many western brands, it is simply not where the Chinese customers are. If you are serious about China and want to generate long term sales, Alibaba and Jindong are the platforms where you need to be
That said, WeChat Stores and e-shops have their place and the non-existence of sales commission makes them a good fit for your promotional campaigns or for in-store shopping. However, unlike Alibaba and Jindong, they will typically not generate ongoing sales without strong marketing effort. Moreover, Tmall and Jindong offer fantastic and reasonably cheap advertising options that WeChat simply cannot match.
Focus your attention on Alibaba and Jindong
Chinese e-commerce is different
The Chinese shoppers expect online shops to look a certain way - and it is very different from the ‘western’ aesthetic. Let’s have a look at Sony’s official website for the global audience and compare it to their official presence in China.
Global landing page
Chinese landing page on Sony’s official Jindong store
Global product page
Tmall product page
Sony’s Chinese visual identity and presentation is completely different. We see wild colors, illustrations and many options presented to shoppers.
Other brands, both global and Chinese, adopted very similar style of presentation.
As painful as it is, brands have to be prepared to adjust their own identity to China if they want to succeed.
E-commerce in China is a huge industry and we can never cover every aspect of it in just one article. If you want to find out more, send us a message and we’ll help you find the approach to China’s e-commerce that will work best for you.