05 - 07 March, 2020
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Here’s How Tmall Became a Dominant Force in the Asian Ecommerce Market
When B2B retail giant Alibaba decided to launch Tmall – an ecommerce platform designed to help local and international businesses sell brand name goods to mainland Chinese consumers – it’s hard to imagine that a decade later Tmall would have 500 million active users and sit as the world’s ninth most visited website.
What, then, is the secret behind Tmall’s success? Is it the customer experience, the technology, the size, a combination of these factors, or something else entirely?
Tmall has a host of features which make it an ideal ecommerce platform. It has the very latest in transactional technology forming its backbone, as well as a huge selection of products. The cluster effect also brings businesses offering similar products and services together, and with “strength in numbers”, companies operating within Tmall can speak with a single voice to tackle industry challenges.
However, while the utility and functionality of the site are clearly big parts of Tmall’s success, they by no means provide the entire picture.
Another significant factor comes down to the psychology of Tmall’s strategy, which takes strength from the era of mass prosperity presently being enjoyed by Chinese consumers. Before a society becomes prosperous, spending is mainly focused on items of necessity, while luxury or treat spending is much sparser. However, after that same society achieves prosperity, discretionary purchasing increases as spending priorities shift from what consumers need, to what they want.
To meet the new demands, Tmall recognized that its a platform needed to build a customer journey along five distinct steps – discovery, engagement, entertainment, validation, and transaction mechanics.
Discovery is about predicting what your customers want and making sure they are able to find it. People generally visit platforms such as Tmall without a specific purchase in mind, so the onus is on the platform to help them discover the items or brands they don’t yet know they want.
Engagement is about beginning the conversation with the customer to start leading them down the sales funnel. Entertainment helps with this process, as it can offer further information about the product while simultaneously creating an emotional connection with the customer – video is great for this. Validation is about making consumers feel good about the purchase, and is achieved via building peer approval and gaining endorsement by key opinion leaders (KOLs).
Finally, once the consumer has been sufficiently tempted by the product over the first four steps, it’s important that the mechanics behind the transaction work in such a way as to make the purchase fast, smooth, simple, and secure.
If a customer wants to buy a piece of sporting equipment, they may not have a particular brand or specific product in mind. They visit Tmall because they know it has a huge range of products due to the cluster effect bringing similar providers together, and can browse through their options with ease. The platform guides consumers by suggesting products along data points – such as the same brand/style used by prominent professional sportspeople – or customer feedback, all the while engaging and entertaining them using things like video.
Tmall works by having a strategy which brings all five key steps together. It uses them strategically to guide customers through the sales funnel, and takes steps to engage them along every part of the process. The ease at which ecommerce is accessed, and thus abandoned, means that it’s easy to lose a customer at any stage of the process, so it’s important to keep them engaged and avoid those dreaded abandoned shopping carts.
While customer choice and technology are a big part of the puzzle when it comes to understanding the success of Tmall, a strategy which considers both the psychology of the customer and the changing nature of the Chinese market lies at the heart of it. As China continues to gain in prosperity, more and more platforms would do well to follow the lead of Tmall to help their business grow in the same fashion.
“In China, Alibaba with its Taobao and Tmall dominates the e-marketplace landscape. The large selection of brands and products available on these platforms satisfies the expectations of Chinese consumers who mainly seek choice, speed of delivery, practicality and simplicity of action,” writes Digital Marketing & Business Shanghai. “Marketplaces like Tmall or JD.com are the main strategic entry points for foreign brands’ China market penetration. During the last 11/11, the most important online sales period in the world, Alibaba set a record of $17.8 billion in GMV.”
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