China’s Consumer Brands Megasite TMall Grows by Leaps and Bounds
On Nov 11, 2011, Singles Day, TMall held a massive one-day sale, resulting in a total of 3.36 billion Chinese Yuan in revenue (530 million US Dollars). With massive support from Taobao, TMall has seen incredible growth throughout 2011. In this post I’m going to introduce TMall and explain some of the major changes TMall made in 2011 and early 2012.
TMall’s homepage on Nov.11th . It says, “Prices From 10 Years Ago” and “50% Off”
What is TMall?
Taobao is the EBay of China – an online C2C and B2C sales platform. TMall is sub-brand of Taobao that is dedicated to official, branded stores. If I were to compare Taobao to a shopping district in China, TMall would be the biggest glitzy department store, while the other Taobao stores would be like the little stores on the streets of China. Anybody can start a store on Taobao. To start a store on TMall, you need to be a brand, and pay a fairly large fee.
TMall has over 70,000 brands such as Nike, Gap, Coach, Nokia and even Chevrolet. If you want to open an online shop in TMall, you need to get verified. If you sell Adidas products, you would need to provide evidence that you are a legal, authorized dealer. You’d have to show where you buy your products and prove that they are real. Also you need to pay a deposit fee. If you’re caught selling fake goods, the deposit fee will be used to pay customer refunds. Besides the deposit, you have to pay a service fee as well.
This provides TMall store owners with several benefits. For one, customers trust TMall more than they trust other online retailers. Trust is a major issue in Chinese e-commerce. Secondly, Taobao pushes TMall stores more than it does other online stores. So, as store owner you get more traffic, and higher converting traffic.
A Taobao search results page. The products from TMall stores (marked with a “T” icon) show up before the products from other Taobao vendors.
On November 1st, 2010, Taobao announced that TMall would become a stand-alone brand, and they put it on its own domain: TMall.com. They also announced that they would spend 200 million Yuan promoting TMall.
TMall's brand page
TMall’s Record-breaking Shopping Festivals
On Nov 11th, almost every store on TMall joined in on the sale. With so many products at 40% off, 70% off, or even up to 90% off, people were sitting in front of their computers waiting for midnight to arrive. Sales reached 100 million Yuan within 8 minutes. That’s about 2 million US Dollars per minute. Total sales that day reached 3.36 billion Yuan.
3.42 million people accessed TMall on the first minute of Nov.11th. This is how was I waiting for the sale!
TMall didn’t stop there though. They announced a follow up sale on Dec 12th. This time all of Taobao joined it, so the results were even more astounding. Including TMall stores and other Taobao stores, sales reached 4.38 billion in sales in one day.
TMall has been running a Singles Day sale for the past three years, and the sales have increased greatly each time. In 2009, they had sales of 50 million, in 2010, sales increased to 936 million and in 2011, sales reached 3.36 billion.
What made such a huge difference this year?
- More and more Chinese people shop online now. (For more info, see our previous post on Chinese Internet user demographics over the past 15 years.)
- A lot more brands have joined TMall ove the past 2 years,
- Taobao has invested a lot more money in promoting the sale, not only online but offline as well.
TMall ads are everywhere - bus stations, subways….
TMall Jacks Up Fees
Taobao recently increased TMall fees substantially. To have a store in TMall, you must pay both a service fee and a deposit. In October of 2011, the service fee was increased from 6,000 Yuan to 30,000 or 60,000 Yuan. On January 1st, deposits were raised from 10,000 Yuan to 50,000-150,000 Yuan. Small businesses have dropped out to make way for big-brand stores.
TMall has promised to improve their service for store owners. 1.8 billion Yuan will be spent on improving TMall’s technology and promotions in 2012.
For more info on TMall’s fees, see http://zhaoshang.TMall.com/ (Chinese).
TMall’s Aggressive Advertising
TMall has also adjusted their advertising messages lately. Their previous slogan was “无人上街，不代表没人逛街” which means “Just because nobody’s on the street, doesn’t mean nobody’s shopping”. Their video ad shows empty department stores and streets, as if nobody is buying anything in brick-and-mortar stores because they’re all shopping online at TMall. This slogan angered other retailers though, who saw it as forcing price competition.
In 2011, TMall changed their attitude and came out with the new slogan “让欲望不再失望”, which means “You won’t be disappointed.” What they mean is that TMall is open 24/7, so you can get what you want whenever you want it. It focuses on convenience and opportunity rather than price. The song was written by Hong Kong musician Peter Millward, and has now become quite popular online. The tone of the video presents TMall as a high-class online retailer, which matches their mission to weed out unauthentic products.
TMall’s New Chinese Name
On January 11th, 2011 TMall changed its Chinese name from 淘宝商城 (Taobao Mall) to 天猫 (Sky Cat), which has a similar pronunciation to “TMall”. Taobao stated that the cat is symbolic of fashion, so it fits TMall well. From the new domain name to the new Chinese brand name, we can see that TMall is becoming more and more independent from Taobao in terms of branding.
TMall is now running a competition for the new logo for 天猫 all over the world with a 600,000 Yuan prize for the winner. Check it out here (English and Chinese).
天猫 is the new Chinese name for TMall.
Online shopping is still newer to Chinese people than it is to Westerners. As Chinese Internet users gain more and more trust in online payment and online shopping in general, the opportunity to sell to them continues to grow. If you’re thinking of selling physical consumer products to Chinese Internet users, Taobao and TMall are the first websites you should familiarize yourself with.