Date: 27 June 2017
Source: Webpower China
If an international brand wants to establish online business in China, Tmall is the marketplace it can almost never avoid. To make things easier, brands can work with Tmall Provides (TPs).
What exactly is TP?
TPs are agencies certified by Tmall to help sellers with their marketing, logistics, IP protection, IT development and more. In fact, Tmall global accept foreign merchants ONLY if they work with a TP.
Why should I work with TPs?
Besides the mandatory part, one of the biggest reason for collaborating with TPs is that they speak the local language. They are able to assist international brands with quick responses to consumer demands. They are the expert of the local market – knowing exactly how Chinese consumers are like.
How does it work?
In general, TPs charge brands in 3 ways: 1) fixed monthly service fee; 2) commission based on sales; or 3) mix of 1) and 2). Working with TPs could be pricy. Typically, a resourceful TP charges anywhere between 20,000 to 100,000 RMB per month (fixed fee); or a 5% – 10% of revenue share. Note that this cost is only going for TPs, excluding platform fees and commissions.
Is there any risk working with TPs?
Yes, there is. Despite that TP could be a great help for new comers in China, it can also bring additional challenges. First off, cross-border e-commerce is still a relatively new business in China. Secondly, being certified does not guarantee quality.
What should I look out for when working with TPs?
Select on service expertise
TPs usually offer one-stop solution, even though they may have limited experience in some regards. Determine what specialties are most important to you, and make the selection accordingly.
Select on product category
Tmall often classify TPs by product category, so as to better assist its vendors. For instance, TPs dealing with food & beverage would have different expertise than those handling baby care products.
Select on geographic location
Apart from national regulations, cross-border e-commerce pilot zones may have their specific procedures. Therefore, selecting the right location may give you easier access to online business in China.