China's largest online retailer is looking outward with a new initiative called “Tmall World” that targets Chinese consumers living overseas with localized payment solutions, logistics, and marketing campaigns.
Alibaba announced its plan on Monday to target the 100 million overseas Chinese consumers in its “priority markets,” Hong Kong, Taiwan, Singapore, and Malaysia, giving them easier access to purchasing products on Tmall. Tmall World will kick off with a “Mid-Year Mega Sale” from June 18 to 20.
Many Chinese consumers in these countries are already familiar with Tmall, but Tmall World is designed to make the e-commerce experience more efficient and localized. Alibaba will work with local e-commerce players, including Southeast Asian retailer Lazada Group, to deliver the logistics and payment needs unique to each market. In a precursor to these efforts, Alibaba bought a controlling stake in Lazada last year.
Any brand that currently has a shop on the Tmall platform will now have the option to sell to markets outside of mainland China through this initiative. Although the company confirmed this was optional.
While it’s unlikely that international luxury brands coming into China through Tmall will benefit from this initiative, local mainland Chinese luxury brands on the platform or brands that still don’t have a presence outside of the mainland will now have a channel for expanding their reach.
Chinese luxury brands are already much more open to embracing Tmall, according to the findings from Digital intelligence firm L2’s 2017 Digital IQ Index: China Luxury, which benchmarks 89 luxury brands' digital performance in China. Currently, there is a presence of mainland and Hong Kong jewelry brands on the platform, including Hong Kong’s Chow Tai Fook and Chow Sang Sang, Zbird from Shanghai, and Bloves from Shenzhen.
“Tmall World will likely be a benefit to any kind of Chinese brand because it’s giving them a wider, global market,” Liz Flora Editor of Asia Pacific Research at L2. “It will give Chinese brands a global advantage.”
Aside from Chinese luxury brands, companies on Tmall that do off-brand “luxury” goods, ones that look nearly identical to the real thing but don’t adopt the brand name, will also potentially have access to more markets. Already, international luxury brands are wary of this category of fake goods on Tmall and several have thus adopted alternative online retail platforms for selling to mainland Chinese consumers.
Currently, Tmall World is only focused on parts of Southeast Asia and Greater China, but Alibaba said it planned to launch the service in other parts of the world as well. The group’s affiliate company, Ant Financial, which oversees mobile payment solution company Alipay, is already expanding in the United States and Europe, which could set the foundation for further building upon an online retail economy.