Alibaba Group’s 11.11 Global Shopping Festival is underway, with more than 290,000 merchants from around the world taking part on the company’s platforms.
To help overseas brands tap into this massive opportunity and reach the 900 million Chinese consumers expected to participate, cross-border e-commerce marketplace Tmall Global has ramped up preparations under the watch of general manager Anita Lyu.
Thanks to recent upgrades, brands using Tmall Global can include short videos from influencers and Key Opinion Consumers (KOCs) on their product pages, while a freshly launched warehouse network facilitates next-day deliveries in China. What’s more, a new production facility is helping global manufacturers customize products for Chinese consumers.
We caught up with Lyu to learn about these developments and hear her take on the latest cross-border consumption trends in China, as well as her expectations for this 11.11.
The following transcript has been translated from Mandarin and edited for clarity and brevity
Q. While some countries like China have started to rebound from the pandemic, others are still wrestling with its impact. Given this backdrop, what is the value and significance of the 11.11 Global Shopping Festival for international brands? What are your expectations for this 11.11?
A. Demand is still looking strong in China. I think it has become an extremely important market for global brands, especially amid the pandemic. Despite macroeconomic challenges, we hope to help international brands find growth. Tmall Global is fully prepared on multiple fronts, with specialized service capabilities supporting merchants and consumers.
We want to help brands large and small to be successful while providing the best shopping experience to consumers. This 11.11, we hope our consumers can sit back, relax and shop comfortably.
Q. Can you share some examples of new or different things that Tmall Global is trying this year?
A. In the past year, Tmall Global has seen an average of 400 brands join the platform each month. Each 11.11 Global Shopping Festival is a prime opportunity to debut these newly joined brands and products, so this year, we’re very much looking forward to surprising consumers.
We are also continuing to upgrade our service capabilities to better meet consumer needs. For categories like food and nutritional supplements— where consumers highly value quality and freshness — Tmall Global has introduced a model that helps brands process and repackage their ingredients and raw materials into products tailored for Chinese consumers within facilities in bonded zones.
We also launched our “New Discoveries” content marketing channel and have continued to build our ecosystem of KOCs to enrich content around imported products.
Q. There’s been a repatriation of consumer spending in China due to pandemic travel restrictions. Do you think this trend will continue?
A. In the first five months of 2021, China imported RMB6.7 trillion (US$1.05 trillion) worth of goods, which is an almost 25% year-over-year increase. We are seeing Chinese consumers’ lifestyles evolving. A lot of spending that might have taken place during their travels abroad prior to the pandemic has now shifted to cross-border platforms, such as Tmall Global — especially among consumers who are familiar with overseas brands or looking to buy quality international products.
This trend is continuing to grow. Even in a post-Covid world, we expect some consumer habits will endure. After all, they’ve become used to buying quality global goods on e-commerce platforms. Online shopping can transcend geographical boundaries. It’s the best way to deliver products into the hands of consumers — much easier than having to haul all their luggage back home.
Q. What are some growing products and categories on Alibaba’s cross-border platforms?
A. Different types of consumers have different needs. For example, middle-class female consumers have gradually shifted from mainly buying for their families to spending more on self-care. The pet and home furnishing categories have also seen rapid growth. We’ve also seen new categories, such as designer toys, become popular among Generation Z consumers in the past few years.
Q. Any countries doing particularly well?
A. Japanese products have always been popular ever since cross-border e-commerce took root in China. Today, items from markets such as the U.S., South Korea and Germany are also extremely sought after.
China’s retail environment has changed. Previously, we used to provide consumers with key products from brands that are well-known overseas. But today, we incubate brands and new categories based on consumer needs.
So there has been a shift from the big household names to more niche brands offering innovative products that meet consumer demands. For example, we recently partnered with French baby-care brand Enfance Paris to roll out a rinse-free baby shampoo, with Chinese mothers in mind. The brand has seen sales increase by 300% year-on-year in the first six months of this year.
Consumers are now also exposed to more product offerings and choices. Aside from imported goods, we have also seen a rise in homegrown brands. Chinese consumers today are looking for products that appeal to them, whether it’s because they appreciate the brand, product quality or service.
Q. Has this increased popularity of Chinese brands impacted international companies‘ growth in China?
A. In a lot of ways, Chinese brands have offered us inspiration. Behind the rise of local brands are founders who are striving to satisfy Chinese consumers’ varied demands, from the product design and packaging to their marketing and services. I think consumers having more options has actually fueled an upgrade to their quality of life. It’s also led to new market opportunities. Chinese and international brands are working hand in hand to change consumers’ lifestyles and their awareness about categories, such as home furnishing and appliances.
Q. What sets Tmall Global apart from other cross-border platforms in China? Why does it remain the go-to platform for global brands entering China?
A. Alibaba’s e-commerce platforms Taobao, Tmall and Tmall Global continue to be Chinese consumers’ preferred destinations to shop global brands. They especially appeal to consumers who are seeking to improve their lifestyles. We’ve continued to see our customer base grow significantly, along with their annual spending and the average revenue per user (a metric that gauges a company’s revenue per user) on our platforms.
Alibaba also offers a one-stop, full suite of services that help brands understand and unpack consumer insights, as well as promote and launch its products, open stores and handle logistics. Tmall Global operates warehouses all over the world, including a 20,000-square-meter bonded warehouse in China. Our entire supply chain, from cross-border to China domestic logistics, is very mature. In other words, this helps us ensure a satisfactory experience for consumers.
Finally, our business model is very unique. We welcome brands and retailers to operate their own flagship stores on Tmall Global. But that is not the only way to work with us. Small and medium-sized businesses have the option of selling their products via our self-operated channels. We also offer a full-service retail solution, with Tmall Global taking care of all retail operations for brands as they explore the China market.
Q. Tell us more about Tmall Global‘s self-operated channel.
A. From the first day we launched self-operated solutions, the goal has been to serve consumers. Consumers want a one-stop hub — a single store that offers similar products. Based on this insight, we launched a dedicated store for cosmetics. It has since helped us to meet customer needs and incubate products from international brands, boosting their visibility in front of Chinese consumers. We will create more stores like this going forward, including a flagship store for imported pet products.
Q. How are you upgrading logistics services for cross-border merchants on Tmall Global?
A. We are enhancing our logistics services based on different industry needs. For example, secondhand luxury and vintage goods has been a fast-growing sector. To better meet this demand, our Tmall Overseas Fulfillment model supports the sales of secondhand luxury items, where there’s often just one of each item in stock, allowing merchants to store them in Tmall Global’s overseas warehouses, which they can use to quickly ship products to Chinese consumers.
Also, we worked with Cainiao Network to launch a dedicated perfume flight route and create special packaging to address safety concerns of transporting small-batch fragrances to China via air.
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