If you are already familiar with the e-commerce market in China but still don’t know how to start selling your product on these platforms, let’s break it down together with Business Panda—a company that helps Russian brands enter the Chinese market. We will look not only at the most popular marketplaces in China in 2020, but also discuss which platforms allow you to open a store without a Chinese legal entity or any infrastructure in China at all.
Popular Marketplaces in China
As of 2020, the number of Chinese people who prefer online shopping is 710 million.
As of May 2019, Alibaba, JD.com, and Pinduoduo ranked among the top three Chinese e-commerce retailers.
In 2019, total retail sales on Chinese marketplaces reached $1.94 trillion.
Taobao
Taobao, focused on B2C and C2C sales, launched in 2003. The main idea was to enable large and small businesses, and even individuals, to sell products online. On Taobao, you can buy almost anything. This is primarily due to the platform’s low entry requirements for sellers and its small security deposit. Please note: you cannot open a store on Taobao without a Chinese legal or individual entity. Taobao’s user base exceeds 490 million.
What you need to open a store on Taobao:
Chinese legal entity;
Chinese bank account;
Alipay account;
PRC passport;
Deposit—1,000 CNY, refundable upon closing the store.
Tmall
Tmall is geared toward large Chinese and international companies, allowing well-known brands to sell to Chinese consumers.
Monthly traffic: 512 million visitors. Unlike Taobao, the registration process on Tmall is much more complex and deposits are significantly higher. Before registration, your brand undergoes a review for suitability on the platform. You’ll need to register and fill out all necessary documentation.
What you need to open a store on Tmall:
Chinese legal entity;
Chinese bank account;
Alipay account;
PRC passport;
Trademark information;
Product license copy;
Additional requirements;
Registered capital of at least 1 million yuan;
Company must have been in the market for over a year.
Cost:
Security deposit: ¥50,000–¥100,000 depending on product type;
Annual platform fee: ¥30,000 for electronics, ¥60,000 for clothing and food;
Sales commission: 2–5% depending on category; e.g., 5% for clothing and food.
Tmall Global
Tmall Global is a cross-border platform for international brands, allowing Chinese consumers to buy high-quality imports. It has over 3.5 million monthly users.
What you need to open a store on Tmall Global:
Legal entity—Chinese or foreign;
US dollar bank statement;
Company Alipay account;
Company representative's passport;
Trademark information;
Product license copy.
Cost:
Security deposit: $25,000;
Additional fee: $5,000–$10,000 (depending on product category);
Sales commission: 0–10%;
Alipay processing fee: 1%.
JD.com (Jingdong Mall)
JD.com is one of China’s leading B2C e-commerce platforms. Founded in 1998, it started with media but soon expanded to electronics, phones, and computers. Since 2012, the platform has engaged in international trade, and in 2014 Tencent acquired a 15% stake. As of June 2020, JD.com had 250 million monthly users (vs. 170 million on Tmall.com).
What you need to open a store on JD.com:
Chinese legal entity;
Chinese bank account;
Alipay account;
Company representative's passport;
Trademark information;
Product license copy;
Tax residency certificate;
Presence of ® or TM.
Cost:
Security deposit: ¥50,000;
Annual platform fee: ¥12,000;
Sales commission: 2–10% depending on industry and fulfillment model.
JD.com vs. JD.hk: The difference is similar to Tmall vs. Tmall Global: JD.com mainly lists Chinese companies or foreign ones with a local legal entity, while JD.hk is designed for foreign companies, making entry into China’s market easier.
What you need for JD.hk:
Legal entity—Chinese or foreign;
US dollar bank statement;
Company Alipay account;
Company representative’s passport;
Trademark;
Product license copy;
Logo registration documents;
Presence of ® or TM.
Cost:
Deposit: $15,000;
Service fee: $1,000/year;
Sales commission: 2–8%.
Little Red Book (Xiaohongshu)
Little Red Book (Xiaohongshu) is a social network with e-commerce features, similar to Instagram’s shopping experience. In 2019, active users surpassed 200 million—88% of them are women in Tier 1 and 2 cities, and 70% were born after 1995. Content includes product reviews, deals, and promotions. The platform focuses on cosmetics, clothing, baby food, food, and fitness items.
What you need to open a store on Little Red Book:
Legal entity—Chinese or foreign;
Company representative’s passport or driver’s license;
Bank statement;
Overseas registered trademark.
Cost:
Minimum deposit: $3,500;
Sales commission: negotiated individually.
VIP (Vipshop)
VIP, launched in 2008, specializes in clothing, cosmetics, personal care, and mom & baby products. In 2019, it had 69 million active annual users. According to Deloitte’s “Global Powers of Retailing 2019,” VIP ranked second among the “50 fastest-growing marketplaces.” VIP enforces high standards for product quality and documentation, including customs paperwork for imported goods.
What you need to open a store on VIP:
Legal entity—Chinese or foreign;
Company representative’s passport or driver’s license;
Bank statement in yuan;
Overseas registered trademark.
Cost:
Security deposit: ¥105,000;
Sales commission: 3.8–9.8%;
Platform fee: ¥600.
Kaola
Kaola, focused on imported goods, is relatively new among China’s e-commerce giants. It was founded in 2015 by Netease (an IT giant). As of July 2020, Kaola had 1.9 million monthly users.
What you need to open a store on Kaola:
Easiest to register and verify through a Taobao account; foreign companies can start selling without a Chinese business license.
Required documents:
Legal entity—Chinese or foreign;
Company representative’s passport or driver’s license;
Bank statement;
Trademark; *Other documents upon request.
Cost:
Placement cost is determined after application, averaging about $1,000;
Sales commission: 2–10%.
About Business Panda
Business Panda is the operator of the "Russian Commodities Pavilion" project in Chengdu, Sichuan Province, PRC—one of the largest platforms bringing together over 1,000 Chinese trading agents.
The Russian Commodities Pavilion is a platform for the effective entry of Russian brands’ products into the Chinese market and for building cultural, economic, regional, and intergovernmental ties. The project is implemented with the support of the Chengdu Bureau of Commerce (PRC).
Business Panda LLC wishes you a successful launch and great sales volumes in the Chinese export market.