Drapers gives you an exclusive sneak-peek of our interview with Janet Wang, international business development director at Tmall, the Chinese e-shopping centre that has a registered user base of over 500 million, ahead of the full interview in this weekend’s edition.
Why did the Alibaba Group decide to launch Tmall?
Tmall launched in April 2008 for two primary purposes. First, brands needed a direct online channel to the vast Chinese consumer market. Second, there was growing demand for a guarantee of authentic branded products. Today, Tmall has over 500 million registered users. So that means everyone shopping in China shops with us.
Is cash the primary payment method in China?
No, cash on delivery is not the primary payment solution for delivery. Most consumers prefer to pay through Alipay, [Alibaba Group’s in-house card payment solution whereby customer do not release payment until they are happy with the product].
What profile of fashion brand or retailer are you looking for?
Brands with different price points and propositions because we have a very broad customer base. Of course there are brands that attract the mass [market] but we see more and more that there is this niche group of consumers looking for something different and more unique, even if the price can be considered more premium.
Do they come to you or do you go to them?
It works both ways. In the initial stage we do directly talk to a lot of brand owners based on the search demand we have seen in our platform, because there are certain brands that we see consumers searching in large volumes on a daily basis. However, at the same time as Tmall’s portfolio of international brands has grown, a lot of them refer their peers to come and join us.
Which UK brands is there most demand for?
Burberry is probably the most desired. We do see tremendous search volumes of consumers looking for Burberry product.
Does Tmall’s customer vary from one city or province to another?
Yes, because the weather varies dramatically from Northern to Southern China, so consumers buy differently. Winter comes a lot earlier in Northern China and consumers start buying down jackets in the early fall, [whereas] in the South, which is usually 25C all year round, they tend to buy something lighter.
Are consumers in the more developed coastal cities more trend-led?
No, surprisingly. I mean of course Beijing and Shanghai are still the fashion capitals, and the consumers living in second tier cities always look up to them. However, it is fascinating, some of the more statement pieces are sold in second tier cities in some of the wealthy affluent provinces, even if they are not the big cities that [those outside China] know.
Who do you see as your competitors?
We don’t really see direct competition to our business. We are building an ecosystem and a lot of stand-alone etailers actually also have e-shops on Tmall. Also because of the nature of our business model [being a virtual shopping centre and not a retailer] we don’t actually compete with offline businesses either. On the contrary a lot of our merchants have offline stores.
Why should UK fashion brands and retailers enter China via ecommerce?
Starting online will be a lot easier than offline. Offline retail is very competitive and rents are going higher. The late-comers usually don’t get good locations, and with a few stores you can only cover a very limited area. And there are a lot of costs including the physical structure and people, whereas online is relatively simple. You start a site and then you can adjust you brand presentation and product in a timely fashion to respond to the market better. Also, very importantly, then you will realise where [geographically] Chinese consumers are interested in your product and then you can extend it offline.