Chinese online marketplace Tmall Global has unveiled two key initiatives to bring US$200 billion worth of international goods into China over the next five years.
The Alibaba Group strategy is designed to assist businesses of all sizes enter the China market.
The initiatives – the Centralised Import Procurement (CIP) and Tmall Overseas Fulfillment (TOF) – are import solutions offered by Tmall Global to help international brands accelerate their entry into China and capitalise on hot demand for high-quality products.
Alibaba unveiled the CIP program as a key part of Alibaba’s New Retail business. By leveraging the six procurement centres Alibaba has set up across the globe, the program sources imported goods for all the online and offline outlets within the Alibaba ecosystem, including technology-driven grocery chain Freshippo (known as “Hema” in Chinese), Tmall Supermarket and Intime Department Store.
The program is a quick and low-risk way for international brands to enter China allowing them to reach the nearly 700 million active users on Alibaba platforms.
TOF is a consignment solution that allows brands to place a small batch of products at one of the TOF centres to be sold on the Tmall Global platform. This gives businesses around the world a chance to try out and fine tune their product assortment before making a full entry into China. TOF centres are currently available in Japan, South Korea and the US, with plans to expand into Europe later this year.
“These new initiatives on Tmall Global, supported by the entire Alibaba ecosystem and benefiting both current and future partners, are needed enhancements as we strive to meet the rising demand of Chinese consumers for high-quality international products,” said Tmall import-export GM Alvin Liu.
To support the initiatives, Alibaba’s smart logistics network, Cainiao, will continue to expand its bonded warehouses in China with an aim to triple its total size to 3 million square metres in three years.
“Over the years, Tmall Global has added a full suite of innovative and value-added services to help overseas brands succeed in the China market,” said Liu, “including plugging them in to the entire Alibaba economy. The consumer insight from our ecosystem provides Tmall Global partners a complete view of their customers’ engagements even if they do not have operations in China. These market entry and in-market expansion programs are our key differentiators and have created unique benefits for international brands.”
Tmall Global data shows China’s demands for imported goods is gaining strong traction across age groups, regions and categories. Generation Z, comprising those born after 2000, is the fastest-growing consumer group on the platform.
The platform is attracting more shoppers in less developed regions, and Tmall Global has successfully propelled the growth of three categories: anti-hair loss products, beauty-from-within products such as collagen drinks and trendy footwear in 2018.
China’s Gen Z is also fueling demand for pet products and beauty devices. Last year, the number of pet-related brands on Tmall Global doubled from the previous year, and sales of beauty devices on the platform also quadrupled from a year earlier.
Recognising young Chinese consumers’ love for content, Tmall Global will continue to offer brands a raft of content-generating tools to boost brand awareness. By tapping into Alibaba’s own digital-media channels, such as Taobao Livestream, brands can directly speak to Chinese consumer through multiple touchpoints, including livestream services, videos and testimonials by popular influencers and key opinion leaders.
According to Chinese data-analytics firm Analysys, Tmall Global is the biggest cross-border platform in China. The platform offers Chinese consumers more than 20,000 overseas brands and more than 4000 product categories from 77 countries and regions.