Tom Sheng- category leader, consumer electronics and home cleaning, Tmall Global
On Monday, September 16, Tom Sheng provided valuable information and insights to Global Forum attendees about the advantages of working with Tmall’s ecommerce platform in China.
Tom Sheng has worked for Alibaba/Tmall Global for three years. His current responsibilities include computer hardware, home audio, home video, electric home appliances, laundry, cleaning, smart home and all smart gadgets. Before joining Tmall, Tom was a buyer and merchandiser for several other significant online e-retail platforms for more than 10 years.
China has the largest population in the world. Ecommerce is the best way to enter the Chinese market, especially for small and medium size brands. Cross-border commerce allows a supplier to maintain original packaging and comply with country of origin standards. Other benefits include lower tax rates compared to general trade and unique advantages for testing the market in a rapidly changing retail landscape.
Tmall Global Scope
Tmall Global is the #1 platform for imported goods for the 52nd consecutive month. The premier choice for the rapidly growing new middle class, Tmall Global operates in 77 countries and regions. It carries more than 20,000 international brands with products in 4,000 categories.
Tmall Global Consumer Profile
- 46% of customers are new middle class: Want the best for their family, prioritize safety and quality
- 60% of customers are less than 30 years old: Young millennials want new experiences and are less price-sensitive
- Generation Z — less than 25 years old: Prioritize style, follow celebrity and influencer endorsements
Popular categories include beauty and personal care, health and wellness; baby and maternity.
Getting Started on Tmall Global
Is your brand Tmall global ready? Different platform solutions will depend on depth of brand awareness and brand strategy. Brands may choose a supplier model of export to China or the marketplace model with Tmall Global.
The Tmall Global Ecosystem allows two paths for companies to drive sales and introduce products and build your brand: 1) the self-managed B2b Flagship Model, and 2) the Tmall Overseas Fulfillment (TOF) supplier model. In the Flagship Mel, vendors build their branding and marketing by introducing their brand and product variety. It’s a one-stop hub to introduce a lifestyle, to educate and lock-in the consumer.
The Tmall Overseas Fulfillment (TOF) Model is a wholesale supplier model. Companies sell through the Tmall Global TOF store in direct collaboration with a powerful distribution channel. This provides risk and investment control for market exploration in the import lifestyle supermarket. Tmall Global operates the stores to sell overseas products in this dedicated effort for product and brand incubation. Sheng showed various examples of brand relationships that successfully operated in both methods.
Merchant Marketing Channel
For those using the Flagship Model, Tmall Global is a marketing channel, not just a sales channel. It is a place to build your brand in China, by using their in-app promotions, interactive games, deals on selected items, offline events and celebrity livestreaming. Your content strategy is the key to raising brand awareness. A well-planned 360-degree content strategy across all channels is the way to win in the ecommerce landscape. Sheng outlined the merchant operation homepage that offers a real-time look at your business: monitoring sales, traffic, customer profiles, marketing, customer service and competition.
Tmall Overseas Fulfillment (TOF)
Tmall’s Overseas Fulfillment program is a new model to help overseas brands test the market. Utilizing overseas warehouses for direct fulfillment with inventory flexibility and lower costs for logistics and storage, TOF’s consignment model optimizes assortment and facilitates easy exchange of inventory in the home country.
Merchant benefits include
- 100% access to Chinese consumers seeking overseas products
- Low-cost market entry for testing and assortment optimization
- Wholesale cost basis
- Flexible settlement options in home currency
- Easy returns or exchanges of inventory in home country
How Tmall Overseas Fulfillment Works
Tmall Global manages marketing and selling on the platform. Tmall buyers assist you in selecting product assortment. Merchants ensure delivery of goods to Tmalls warehouse in Los Angeles. Tmall Global then sells the products on its online store and handles delivery to end consumers.
This arrangement is ideal for merchants with multiple brands and more than 1,000 styles or SKUs. Tmall’s tech capability integrates real-time inventory. Drop shipments to designated transit warehouse within 48 hours lowers risk and lowers costs while also expanding assortments and providing new sales opportunities.
Sheng provided examples of numerous scenarios. He then answered some questions from the floor about shipping logistics and patent/trademark protection mechanisms. He spoke with attendees in small groups after the presentation.