(This story was originally published by Internet Retailer)
Two of Alibaba Group Holding Ltd.’s Chinese Web marketplaces are combining to boost online sales in China for U.S.-based vitamin and nutritional supplement brand Puritan’s Pride.
Puritan’s Pride opened a Web store in October 2014 on Tmall Global, a special section of Alibaba’s Tmall.com online shopping portal for foreign brands that don’t operate physical stores and have not obtained business licenses to operate in China. China’s government has adopted rules in recent years enabling Chinese consumers to legally buy via the Web from foreign companies without China business licenses.
Daily sales on Puritan Pride’s store on Tmall Global average about 200,000 yuan ($30,421) versus 50,000 yuan ($7,600) at the same time in last year,” according to Sara Han, vice president of Ecmoho, a Shanghai-based company that manages the Tmall Global store for Puritan’s Pride.
Puritan’s Pride confirms that its sales in China are growing, and that Ecmoho is managing its online business there.
For a new brand entering China the big challenge is attracting customers, Han says. Puritan’s Pride has done that in large measure by promoting its products on Juhuasuan.com, another Alibaba marketplace that features short-term deals. “About 80% of new consumers to Puritan’s Pride store now come from Juhuasuan.com,” Han says.
“In a test in last August, we sold 3,000 bottles of glucosamine, a supplement for joint health, via Juhuasuan in one day,” Han says. “After that, we sold 40,000 bottles of this products, with 70% of the sales coming on Juhuasuan.com on Singles’ Day 2015.” That’s a big day of online sales that Alibaba and other e-commerce companies offer in China every Nov. 11.
Juhuasuan features limited-time deals from merchants that operate stores on Taobao and Tmall, Alibaba’s two biggest consumer-facing marketplaces in China. “Most of big names on Tmall Global have worked with us and those brands’ sales on Juhuasuan are getting close to their sales on Tmall Global,” Liu Bo, Juhuasuan’s general manager tells Internet Retailer. “About 30 million users visit our site every day.”
Juhuasuan lists only 450 products each day and each product is offered for no more than two days.
“Every merchant on Taobao and Tmall can apply to sell on Juhuasuan, but we only choose the best products based on their historical sales and service records.” Liu says, “For the new overseas brands on Tmall Global, we take the brand’s influence in the global market into consideration and give them priority for selling on Juhuasuan.com.”
Juhuasuan.com charges a one-time fee of 10,000-20,000 yuan ($1,521-$3,042) for each product offered and also collects a commission of 1%-5%, depending on the product category, Liu says.
For a fuller report on the openings for foreign companies to sell online in China, see “Open Door Policy” in the November 2015 issue of Internet Retailer magazine.
For more Chinese e-commerce data, please click here for Internet Retailer 2015 China 500.
Frank Tong is Internet Retailer’s senior editor for China.