Retailers planning to sell to China could find market entry more difficult with news that Alibaba has tightened up the application procedure for its Tmall eCommerce platform. Tmall has stopped accepting voluntary applications, meaning only pre-approved brands on Tmall's own database are eligible to join the site. The change applies to both the main Tmall platform and Tmall Global, the solution designed for foreign companies wanting easy access to Chinese consumers.
The tightening of rules on new applicants follows Alibaba's recent run-in with the State Administration for Industry and Commerce (SAIC), which accused Alibaba of a litany of wrongdoing, notably the sale of counterfeit goods on its platforms from merchants without business licences, and click-farming.
Tmall's new hardline will reinforce the platform's quality branding (unlike C2C platform Taobao, the B2C Tmall has always required a greater investment to get started) but it represents a major headache for quality Western brands that are not yet known in China and so are unlikely to appear on the approved database. The reduction in fake products and the restoration of confidence in Tmall can only be good for eCommerce in China over the long term - for consumers, merchants and brands alike - but in the short-term it leaves many Western retailers shorter on options for entering the Chinese market.
Other retail options do exist, but few have quite the same power or appeal of Tmall to quality brands. Competing eCommerce platforms are an option, and although there are some big players entering the market they do not yet have the fearsome market share of Tmall. Selling through the integrated stores of social networks such as WeChat is also an option, though this would usually be seen as supplementary to a main store.
Selling on your own website is possible, but will require more infrastructure investment (properly tailoring the site to the Chinese market) and puts responsibility for promotion through Baidu SEO, PPC and social media in the hands of the retailer. Properly undertaken, these are effective strategies although will likely on see results in the mid-term. Whether Tmall relax their application process, or introduce a process of appeal (presently it is impossible to argue your case for inclusion, at least through official channels) remains to be seen, but do not expect Alibaba to soften their stance in the near future.
Backbone IT Group provide a complete service to help businesses reach Chinese customers, with market research and consultancy, Chinese website design and translation, digital marketing, and business support services. For advice on taking the first steps into the Chinese market, or if you would like to improve your offering in the region, call Richard Unwin on 01524 65533 or email firstname.lastname@example.org.