The cross-border eCommerce (CBEC) market in China is a booming industry, with over 842 million online shoppers generating more than £838 billion GMV in 2021 and this figure is definitely increasing year by year. To capitalise on this trend, several internet giants have established their own CBEC platforms, the top ones including Tmall Global, JD Worldwide, Kaola, VIP Global, and Amazon Global. These platforms offer a range of services and solutions, from flagship stores to direct sales models, and provides brands with the tools to succeed in China's eCommerce landscape.
In this article, we will introduce three leading CBEC platforms, Tmall Global, JD Worldwide, and Kaola, and explore the services and marketing tools they offered.
Tmall, owned by Alibaba Group Holding Ltd., has emerged as the largest online platform in China. Its Global version for CBEC was launched in 2014 and now has captured nearly 40% of the market share in China CBEC industry, cementing its position as a leading player in this segment. With over 100 million active consumers, Tmall Global has demonstrated an impressive year-over-year growth rate of over 100% in product number, and currently hosts over 39,000 overseas brands. For brands seeking opportunities, TMall Global offers 4 business models to choose from:
Tmall Global Flagship Store is an appealing option for financially robust brands. This flagship store operates like a webshop, but is hosted on the Tmall marketplace. It allows international merchants without a Chinese legal entity to sell directly to Chinese consumers through either a bonded warehouse or direct shipping approach. In this flexible model, brands can choose to manage the store themselves or delegate responsibility to a third-party agency. Tmall Global will also guarantee their reach to Chinese consumers by giving access to its powerful marketing and promotional tools, as well as consumer insights data.
Tmall Direct Import offers brands the opportunity to access a well-established and mature channel without the need to manage their own store. By selling their products to Tmall Direct Import team, brands can receive one-stop services and guidance, including onboarding, logistics and warehousing, and online operations.
Tmall Global Ministore is a comprehensive solution tailored for small- and medium-sized enterprises. This service provides end-to-end assistance to suppliers, including product incubation, brand training, and consumer operations. Notably, Tmall Global Ministore has achieved success, with best-selling products created within 90 days and new products receiving 10 times more traffic compared to other channels.
Overseas Fulfillment offers a compelling prospect for international brands to trial the Tmall Global market with reduced expenses and greater operational flexibility. This service facilitates effective inventory management and simplifies the delivery process by allowing brands to exercise flexible stock control in their home country and direct shipment to China from overseas warehouses. Furthermore, the availability of weekly or monthly settlement options in the home currency adds to this service's adaptability.
JD Worldwide, a subsidiary of JD.com, is also a giant CBEC platform. JD Worldwide boasts an impressive track record since its establishment in April 2015, holding a 25% market share in 2021. Currently, JD Worldwide offers storefronts for over 20,000 brands from more than 100 countries and regions, featuring over ten million SKUs. Moreover, the platform offers an Import Bonded Warehouse and overseas direct delivery service, providing a holistic solution for brands seeking to enter the Chinese market.
JD Worldwide offers two forms of cooperation with brands. Firstly, brands can open an online store, whereby JD serves as a marketplace. For instance, international brands or exclusively authorised distributors can establish a brand/retail flagship store, while overseas brand franchised distributors can open a brand franchised store. This approach enables brands to maintain ownership of inventory and obligations related to operations, customer service, among others. Through this approach, new entrants can showcase their brand stories, offer high-quality products, and build their reputation. Groups can also open multi-brand stores, presenting a diverse range of products to consumers.
Secondly, brands can choose to supply products through JD Worldwide's Direct Sales Model, which is the platform's online B2B2C sales model. Through this approach, brands and official distributors sell inventory to JD and leverage the benefits of JD's brand recognition and reputation. This approach enables businesses to benefit from the JD brand name and recognition, which is instrumental in driving sales and promoting products.
Kaola.com is a leading cross-border import retail e-commerce platform in China, boasting a 20% market share. The platform was founded by Netease in 2015 and originally targeted Australian companies seeking to sell their diverse range of products in mainland China. In 2019, Alibaba Group acquired Netease's Kaola e-commerce platform for US$2 billion.
Kaola's competitive advantage is derived from its unique business model, which is centered around building strong relationships with international brands and directly procuring most of its inventory from overseas suppliers. In addition, Kaola has implemented a QR code-based product tracing system in collaboration with Chinese customs, which has played a crucial role in its success. This system enables Kaola to ensure the authenticity and quality of its products while efficiently identifying and eliminating counterfeit goods.
Similar to Tmall Global and JD Worldwide, Kaola offers two options for selling on its platform. The primary method of collaboration is direct purchase from the brand, while flagship stores are recommended for established brands and heavy sellers.
In conclusion, for international brands seeking to enter the Chinese eCommerce market, platforms like Tmall Global, JD Worldwide, and Kaola provide excellent opportunities to reach millions of consumers in the world's largest eCommerce market. If you are looking to expand your reach in China, consider exploring the possibilities offered by these cross-border eCommerce platforms, we strongly recommend you have an agency with rich Chinese market knowledge to assist, and ADN are always here to help in any way we can.