Alibaba's Tmall Courts Western Brands With How-To Guide

Western brands: China's Tmall.com wants you. And for brands embarrassed to admit they still don't understand how Alibaba's massive online mall works, there's a new online how-to guide in English. With Alibaba's IPO expected next year, Tmall's move to enlist more foreign brands and build name recognition in the West couldn't hurt with investors, either. Tmall commands about half the business-to-consumer marketplace in China, and already hosts an impressive roster of foreign storefronts from Adidas to Godiva to Pampers. A Tmall presence is an efficient way for foreign brands to reach the Chinese masses, including those in lower-tier cities without great shopping. While Alibaba's Taobao is comparable to eBay, Tmall feels more like an online mall, with storefronts for brands and retailers. The guide issued last week lays out launch procedures, payment schedules and commission fees, and it walks brands through what buyers see when they make a purchase – a process tricky to navigate without knowledge of Chinese. One brand just launched on Tmall is the National Football League, using nfl.tmall.com to help bring football culture to China. In China, "when you want to buy something, you're going on Tmall," said Richard Young, NFL managing director in China. Mr. Young expects Tmall to grow increasingly open to non-Chinese speakers. Reports suggest Alibaba Group Holding Ltd.'s IPO might take place in the United States, and the company recently led a $206 million investment in U.S. online retailer ShopRunner, an Amazon.com competitor. Yahoo!, a shareholder, announced last week that Alibaba's second-quarter revenues jumped 60% to $1.73 billion. Tmall, which has gone on roadshows from Atlanta to Seattle promoting itself, has an international business development team that put together the new guide, Alibaba spokeswoman Florence Shih said. "Chinese consumers have a growing demand and appetite for Western brands," she said, adding that Tmall wants to give them a wide selection to choose from. Another U.S. brand to join Tmall recently was Little Giraffe, which makes high-end baby gear. Its Tmall site features shots of Suri Cruise and other Hollywood stars' kids clutching its blankets. CEO Trish Moreno said she appreciates Tmall's focus on brand authenticity. "It's important in that market for the customer to trust in the e-commerce experience," she said. Tmall sellers pay a deposit that they lose if they sell fakes. From a consumer standpoint, that guarantee offers one advantage over standalone e-commerce sites and Taobao. Tmall does have drawbacks. Brands pay commission. And for some luxury brands, consumers might want a store experience if they're paying full-price for designer sunglasses, said Mary Bergstrom, founder and managing director of The Bergstrom Group consultancy on China. And it's not a perfect communication tool, since brands "are selling within (Tmall's) templates," she said. Product videos, for example, aren't always welcome. Brands on Tmall might also consider a China web page to "tell your story, introduce yourself, link to other pages and put up videos," said Frank Lavin, a former U.S. under secretary of commerce for international trade who founded Export Now, which helps U.S. companies run Tmall shops. In China, e-tailing generated more than $190 billion in sales in 2012, a figure expected to grow quickly as more Chinese gain broadband and 3G access. For now, 5 to 6% of all Chinese retail is e-commerce, compared to 5% in the U.S., according to a March report from McKinsey Global Institute. Buying online is a slightly different – and sometimes better -- experience in China than elsewhere. Some retailers let buyers pay cash on delivery. And some even let people try on clothes while the delivery person waits – if clothes don't fit, they can be returned instantly.

Alibaba's Tmall Courts Western Brands With How-To Guide

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