In the fiscal year ending March 2018, Alibaba recorded a Gross Merchandise Value (GMV) of USD 768 billion across its platforms, with revenues from sales commissions amounting to USD 34 billion.
Tmall Classic and Tmall Global
The platform has two main versions:
- Tmall Classic, dedicated to companies (Chinese or foreign) that have a legal entity in China.
- Tmall Global, designed for foreign businesses without a legal entity in China.
Sectors
Tmall is a generalist marketplace where all consumer categories can be sold. However, the main sectors are apparel and accessories, beauty and cosmetics, and luxury goods.
Geographic reach
Tmall mainly targets consumers in Mainland China, Hong Kong, Macao, and Taiwan.
Accessibility for foreign brands
Thanks to the growing cross-border eCommerce market and Chinese consumers’ strong demand for foreign goods, regulations have facilitated online market entry compared to physical presence. Foreign products are widely available both on Tmall Classic and Tmall Global.
That said, Tmall Classic requires stricter conditions. To open a store, companies must meet criteria such as:
- Having a Chinese legal entity with at least 3 years of presence.
- Using local warehouses.
- Registering with Alipay and opening a Chinese bank account compatible with it.
- Working with certified Tmall Partners (TPs) for operations and compliance.
Applications are subject to Tmall’s evaluation process before approval.
Core services
Tmall’s business model revolves around several key services:
- Technology platform – Merchants pay an annual fee (RMB 30,000–60,000 depending on sector) plus a sales commission of 2–5%. A refundable security deposit is also required (RMB 10,000–300,000 depending on category and store type). Fees may be reimbursed if revenue and consumer ratings exceed set thresholds.
- Payment system – All transactions are processed exclusively through Alipay, ensuring secure payments and buyer protection.
- Marketing services – Tmall pages are not indexed by external search engines, which drives all traffic through its homepage. This creates significant opportunities for internal advertising, such as homepage banners (around €15,000/day for central placement).
- Data analysis & CRM – Merchants can access detailed analytics, customer profiling, and CRM tools to improve targeting and performance.
- Customer care – Interaction with customers is crucial: reviews are left by about 80% of buyers, influencing brand reputation. Assistance is offered via email, phone, or app.
- Logistics – Managed by Cainiao Logistics, Alibaba’s affiliate, which partners with domestic and international carriers to provide services from international shipping and customs clearance to warehousing, delivery, and returns management.
Store formats
Tmall offers three main store options:
- Flagship stores – mono-brand, managed directly by the brand or licensed distributor in China.
- Authorized stores – multi-brand, operated by a merchant with distribution rights.
- Specialty stores – focused on vertical product categories.
Role of Tmall Partners (TPs)
TPs are specialized service providers essential for success on Tmall. They assist with operations, logistics, marketing, and customer care. Costs typically include fixed service fees and a sales commission (5–12%). Choosing the right TP depends on sector expertise, service coverage (full-service vs. specialized), and pricing.
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