Chinese E-Commerce Giant Tmall Woos American Brands

    Tmall recently embarked on its first U.S. tour, hitting Chicago, Detroit, Atlanta and Seattle in search of new business opportunities and retail partnerships.
    Jing Daily
    Nora ChenAuthor
      Published   in Finance

    Tmall Recently Wrapped Up American Sourcing Tour#

    Last year, writing on Coach's trial store on Tmall, the Alibaba Group's B2C online shopping unit, Jing Daily noted that we felt it was premature to predict if other global brands would follow the brand's lead and launch their own branded Tmall stores. Now, eight months later, the (recently spun-off) Tmall is adding more US-branded goods to its site in the pursuit of meeting the growing Chinese demand for products and brands born and bred in the US-of-A.

    This month, Tmall embarked on its first U.S. tour, hitting Chicago, Detroit, Atlanta and Seattle to raise export awareness and educate US businesses about e-commerce opportunities in China. In a recent interview with Bloomberg, Janet Wang, a director from Tmall's International Business Development department, commented on how the Alibaba Group is widening the range of foreign goods on its site including larger, middle-market names as China's middle class can increasingly afford them:

    Demand for foreign brands remains on the up and up. Our goal is to continue to fulfill the demands and provide our customers with the most comprehensive brand and product selection. As Chinese consumers become more sophisticated, they are becoming more open minded to foreign brands.

    Tmall, which promotes itself as the destination for authentic products, distinguishes itself from sister sites Aliexpress and Taobao, from which Tmall separated in 2011. In contrast to former sister C2C site Taobao Marketplace -- often (and somewhat inaccurately) called the Chinese eBay -- where counterfeits still abound, Tmall boasts better quality control and anti-counterfeiting measures. This has been instrumental in the interest, however tentative, that some higher-end Western brands have shown in opening Tmall stores to tap China's booming e-commerce market.

    Now, with eyes potentially moving towards feeding a growing Chinese hunger for “Made in US” heritage tags, Tmall is proving to be a foil character to Aliexpress (Alibaba’s answer to the international, specifically American, interest in finding and sourcing premium products from a range of home-grown Chinese brands, hand-picked by the Alibaba team). Aimed mostly at overseas markets, Aliexpress offers a collection of “Designed in China” goods that would otherwise remain unknown to non-Chinese (and Chinese) shoppers.

    While Tmall-US collaborations may indeed help meet the demands of shoppers by adding yet another venue for shoppers to get their hands on their favorite products, it remains open-ended whether partnering with Tmall will significantly boost business for these brands.

    However, for smaller, independent American brands who have not yet set foot in the China market in any measurable way, such as Red Wing, Woolrich, Engineered Garments, Tellason and Billy Reid, teaming up with Tmall may just be their ticket in if or when they decide to woo the quality-minded Chinese consumer. As Tmall accounted for 37 percent of China’s business-to-consumer online commerce market in the first-quarter of last year, any share of this activity may be significant for new entrants in the Chinese market.

    For respected smaller (yet high-end) names such as Allen Edmonds that already have plans to move into China, Tmall could be a good first launch platform, compared to Taobao or a much more expensive full-featured dedicated e-commerce site and easier than finding a willing stockist or opening a full-blown flagship store.

    This will be particularly true if Tmall plans to continue, as the company puts it, “catering to the increasingly sophisticated Chinese." As Tmall proves to be a fan favorite of younger Chinese consumers -- racking in a total of 3.36 billion yuan in revenue (US$533.5 million), in a one-day sale on “Singles Day” alone -- major American brands like Levi's, as well as upstart, made-by-hand niche players may be the perfect position to cash in.

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