TMALL GLOBAL

Alibaba’s Mission & Vision

OUR MISSION OUR VISION

To make it easy to do business anywhere To build the future infrastructure of commerce
To be a company that lasts at least 102 years

FOUNDED IN HANGZHOU IN 1999

The Alibaba Economy
DIGITAL MEDIA & LOCAL
ENTERTAINMENT CORE COMMERCE SERVICES

PAYMENT & FINANCIAL SERVICES

LOGISTICS

MARKETING SERVICES & DATA MANAGEMENT PLATFORM

CLOUD COMPUTING
The China Opportunity Today
Retail Market Retail Market Online Taste for
Size Penetration Imported Goods

In 2016 China became Online penetration of China’s The proportion of online

the world’s largest retail overall retail market consumers in China who buy
market at will reach foreign/ imported goods
US $ 4.88 trillion 33% by 2020 40% of online
consumers
Source: 1 & 3 eMarketer 2016, 2 Statista 2017, 4 Oliver Wyman 2016
The China Opportunity Tomorrow

731 Million 300 Million

Internet Users in China Middle-class Consumers.
Compared to The middle class population is set to double
by 2020. Which is the economic equivalent
of adding an economy the size of Germany.

Europe (739 M) US (326 M) ANZ (30 M) In 2020

Source: China Internet Network Information Center - 39th “China Internet Development Statistics Report”
Alibaba Ecommerce Key Milestones
Tmall Global
Taobao (C2C) 1st Double 11 (Cross border B2C) 9th Double 11
2008 Nov 2011 May 2016

2003 Nov 2009 Feb 2014 Nov 2017

Taobao Mall Tmall (B2C) Tmall Global

Direct Import

529m Monthly 60%+ Consumers 90%+ of Total 20m+ Comments

Active Consumers are Under 30 Transaction on and Sharing on the
Years Old Mobile Mobile Everyday
China’s Largest B2C Platform – TMALL
E-commerce in China: The Biggest Players
% of B2C Sales
Tmall.com 56.6

JD.com 24.7

Suning.com 4.3

Vip.com 3.5

Gome.com.cn 1.2

Yhd.com 1.1

Amazon.cn 0.8

Dandang.com 0.7

Jumei.com 0.5

Others 6.7

Source: The Market Mogul; iResearch China; US Department of Commerce

2017 Double 11 Shopping Festival
~ 140,000 Participating Brands
and Merchants
US$25.3 Billion
Total GMV

39% YoY Growth

90% Mobile GMV

1.48 billion Total Payment

Transactions
812 million Delivery Orders
Processed by Cainiao Network
Chinese Consumers Love Imported Products

Provide what’s best for Buy directly from global

Try new experiences
the family brands

(mini baby boom, birth rate 18m-20m p.a. in 2017-2020; second

children (or above) may rise to 56% of newborns by 2020)

Source: Tmall Global & CBNData. 2016 Cross-border consumption report. Photo: Alibaba Group via Panorama, Unplash Nordwood Themes
Cross Border Ecommerce – China
By 2020, half of all Chinese online shoppers will have bought an item from cross border e-commerce
Cross-border ecommerce buyers in China (millions)
292
272
249
221
CBEC Market
Size (US$ BN) 181
2016 $79 128
2017 $100
75
2018 $115

2014 2015 2016 2017e 2018e 2019e 2020e

% of online shoppers 20.0 31.0 40.0 45.5 48.0 49.5 50.7

% of population 6.5 11.2 15.8 19.1 21.5 23.4 25.0

Source: Emarketer 2016; 2017. Internet users who have made at least one purchase from a foreign seller either directly or through an intermediate, excl. Hong Kong
Customized Platform Solutions Suiting Brands Situation
• Taobao Global, Tmall Direct Import (TDI) and Tmall Global – Help brands enter the Chinese market
• TMALL – Help brands already in China.
• Lazada and PayTM – Help brands expand to SEA and India

Products
Chinese
Chinese consumers & Brand
consumers already
in China

Products & Brand Products & Brand India SEA

from overseas already in China consumers consumers
In Mainland China In Mainland China
Legal entity Outside of
Outside ofChina
China
(subsidiary or distributor) (subsidiary or distributor)
Bank account In home
home country
country In Mainland China In Mainland China
Payment In home
home currency
currency In CNY In CNY
Trademark registered In home
home country
country In Mainland China In Mainland China
Warehouse Outside of
Outside ofChina
China In Mainland China In Mainland China
Shipping to Chinese
From overseas
From overseas From within Mainland China From within Mainland China
consumers
Is Your Brand TMALL Global Ready ?
Different Platform Solutions Based on Depth of Brand Awareness
Brands Export-to-China Solutions

Less known in China,

Boutique / new brands or
Established companies testing
a new brand Supplier
Model
Somewhat known in
China or Established
brands with limited
SKU selection Enter TMALL Global if Your Brand is Well Known in China.

Household
names in
China Seller Model
Enter TMALL GLOBAL to Expand Business
Step 1 Step 2 Step 3
Low to Medium Brand Awareness Medium to High Brand Awareness Global Brand Awareness
• Build brand awareness & product • Extend business volume by setting up • Further grow through online distribution
acceptance China OMNI-channel strategy • Integrate sales from multiple channels
Business • Prepare for local market entry • Build local presence and consumer empowered by big data
(trademark, set up Chinese subsidiary, connection • Upgrade customer service and experience
Value etc.) • CRM management • Further build brand affinity and loyalty
• Entry into Southeast Asia via Lazada

Platforms
+ +
Offline presence Offline presence & Online distribution

Marketing
& Media
ENTER
 TMALL GLOBAL OVERVIEW

14,000+ 63 3,700+
International Countries Categories
Brands and Regions

Photo: Alibaba Group

Popular Categories on TMALL GLOBAL

Other
Daily
Consumption

Beauty & Personal Care Apparel & Beauty &

Shoes Personal Care

Health Supplements

Mother & Baby

Mother & Baby
Food &
Groceries
(incl. Health
Supplements)

Source: Tmall Global & CBNData. 2016 Cross-border consumption report

Popular Countries for Imported Products
Top 5 Countries of Origin, 2016
Distribution of Products on TMG based on Country of Origin (% share of Total TMG sales)

Japan

United States

Australia

Germany

South Korea
>10% 1-10% 0.1-1% 0.01-0.1% N/A
Source: Tmall Global & CBNData. 2016 Cross-border consumption report
Consumer Profile on TMG

Tmall Global consumers are Tmall Global consumers live in Consumers under 30 years old
mostly female, under 35. China’s wealthiest cities. are the fastest growing group.

Yearly split by age group

70% • Shanghai
Female
• Beijing
• Hangzhou
Annual Income • Guangzhou
Over RMB100,000 • Shenzhen
(US$14,500)
2014 2015 2016
<23 23-28 29-35 36-50 >50

Source: Tmall Global & CBNData. 2016 Cross-border consumption report.

TMG Consumer Profile (Contd.)

1 New Parents 2 Young millennial (<30 y.o.) 3 Generation Z (<23 y.o.)

Want the best for their baby Want new experiences Fastest growing group

Prioritize safety Prioritize style Prioritize style

Spend 65% of their money Less price-sensitive than other Follow celebrity & influencer
on Mother & Baby products groups (KOL) endorsements

Popular products Popular products Popular products

Milk, Infant formula Sports shoes Celebrity-branded items

Diapers Sports gear Cartoon stuffed animals

Baby food Alcohol (wine) Model kits

Source: Tmall Global & CBNData. Popular products refer to products often bought by one consumer group but not others. Cosmetics & Food items are popular among all groups.
BUSINESS MODEL
Tmall Global – Educate/ Sell/ Engage

TMALL Global Ecosystem

An Overseas Brand’s Ultimate Destination to
Invest in Brand Building / Product Introduction & Sales
FLAGSHIP MODEL TMALL DIRECT IMPORT

Self managed Tmall Global flagship store Supplier model

Partner with TP to run store operations Sold through TMALL Global TDI store
Fees (Deposit, Annual, Commission, Service) B2C B2B Fees (Deposit)

Flagship Store: Direct Collaboration with a powerful distribution Channel:

Build Branding and Marketing Billboard Supply Chain Depth / Risk Control

Discover New Lifestyle Import Lifestyle Supermarket

Introduce Brands, Product Variety • • Platform to Sell High Volume Products
A channel to educate, Customer Lock in • • Channel to introduce mature products
One stop hub to introduce a Lifestyle • • Dedicated effort for new products on Flagship Store
1. Flagship Store Model

Bulk Bonded Store Sale Domestic Buyer

shipping warehouse operation delivery

Merchant (together with TP) is responsible

for the entire business chain including –
marketing/branding, daily operations,
customer service, logistics.
Managing TMG Flagship Store Via
Third-Party Services (TPS)
3rd Party Partner (TP)
• Leads execution
• Leads daily store operations

Cainiao Logistics
• Leads overall effort • Facilitates cross-border logistics
Brand • Sets strategy • Provides logistics data & analytical tools
Owner or
• Secures marketing budget
Retailer Tmall or Tmall Global
• Works with other stakeholders
• Supports IT and payment infrastructure
• Provides access to store data & analytical tools
• Provides support for digital traffic
• Provides paid marketing solutions (Alimama)
• Provides Key Account (KA) support if applicable
TPs Manage Daily Store Operations

TPs can be an operating agency on behalf of the

brand OR a distributor who also takes inventory

• Create operations plan

• Execute store opening
• Decorate store & input product information
• Operate store on a daily basis: Product management,
campaign planning and execution
• Execute day-to-day marketing and promotions: Network
promotions, daily consumer marketing, brand marketing
• Provide Customer Service to consumers
• Support logistic needs: Cross-border logistics,
warehouse services, courier services
• Provide regular reports: Operations report and analysis
Logistics Powered by

1 Bonded Warehouse 3 Consolidated Shipping

Brands pre-ship goods to Cainiao warehouses Brands pack, label, and ship goods to Cainiao’s
in one of six Chinese cities in anticipation warehouses outside of China after a customer
of customer order. Fastest delivery option places an order. Cainiao consolidates with orders from
(max. 7 days) other brands. It then ships to China by flight and to the
consumer (max. 14 days)

2 HK/AU Fulfillment Center (GFC) 4 Direct Mail

Brands ship goods to Cainiao’s warehouses in Brands ship goods directly from country of
Hong Kong or Australia before order takes origin to the consumer. Brands could use non-
place. Consignment model. Cainiao picks, packs, labels, Cainiao services (DHL, FedEx, etc.). Not recommended
and ships the goods once consumers place an order. because delivery times cannot be guaranteed
2. TMALL Direct Import Model

Branding

Bulk Bonded TDI Store Sale Domestic Buyer

shipping warehouse delivery

Merchant to ensure for delivery of Tmall Direct Import will be

goods to a warehouse of TMG responsible for selling the products
choice (Incoterms – CIF). Merchant on the TDI store and handle
is also responsible for branding and deliveries to end consumers.
marketing on and off the platform.
 MARKETING
ON TMALL GLOBAL
Marketing to Your Chinese Consumers .
SOME EXAMPLES OF THE TAOBAO APP HOME PAGE AND SELECTED CONTENT MARKETING CHANNELS IN THE APP
TMALL Global as a Marketing Channel
• Tmall Global is not a pure sales channel, it’s a place to build your brand in China
• Swisse combined cutting edge online and offline marketing for its Super Brand Day

Deals on
In-App promotions Interactive games selected items Offline event in Shanghai Celebrity livestreaming

Celebrity popular
Taobao homepage “Catch the cat” & “Car racing” Deals on 20+ products Co-branded with Ferrari with young consumers
Integrated Marketing Channels
At Alibaba Digital Media and Entertainment are Completely Integrated into the Market Places

Taobao & Tmall Apps

Shopping, Marketing,
and Entertainment platforms

Entertainment
Youku Tudou (“Chinese Youtube”)
Alibaba Pictures, Alibaba Sports,
Largest video site in China
One “Super ID” Alibaba Music, Tmall TV

Personalized User
Experience
Across all
platforms

UC Web
2nd largest mobile web browser Weibo (“Chinese Twitter”)
and newsfeed Largest microblogging site
Selected Brands on Tmall Global
Supermarkets Fashion Department Stores Beauty, Personal Care, Mother & Baby
Cosmetics

Health & Pharmacy Fast-Moving Consumer Food & Beverages

Goods (FMCG)
GETTING STARTED
ON TMALL GLOBAL
On-Boarding on TMG – Steps Involved

1 2 3 4

Assessment Store Store Operation &

& Preparation Application Development Optimization

Approval Launch
On-Boarding Timeline – Tmall Global
Understand the Provide TMG with Find and select Tmall Develop detailed plan
1 Assessment platform brand and product Partner (TP) with TP
& Preparation information
2-4 weeks*

Submit Store Register Alipay Register Taobao Receive Store Submit

2 Store Application Files Global Account Account Invitation Code Company/Brand
Application Qualifications
TMG APPROVAL
2 weeks*

Sign contract & Design store & upload Upload information Ship products
3 Store register with Cainiao products into Cainiao system (according to service)
Development
3-6 weeks*

Managing TP Building brand Testing the market Fueling continued

4 Operation & awareness growth
Optimization
Ongoing

*Actual timeframes may vary

Alibaba: Making it Easy to do Business Anywhere

TENS OF MILLIONS 2 BILLION

OF MERCHANTS CONSUMERS

GLOBAL GLOBAL GLOBAL GLOBAL GLOBAL

BUY SELL PAY TRAVEL DELIVER
Alibaba: Making it Easy to do Business Anywhere

TENS OF MILLIONS 2 BILLION

OF MERCHANTS CONSUMERS

GLOBAL GLOBAL GLOBAL GLOBAL GLOBAL

BUY SELL PAY TRAVEL DELIVER
APPENDIX
TMG Flagship Store – Fee Structure
Security Deposit Annual Fee Commission Fee TP Partner Logistics

A one-time of 150,000- An annual fee of 30- A commission of 0.50% Fix fee and commission Depending on the
300,000 RMB is used 60,000 RMB, - 5% based on product structure. Fee and mode of logistics,
as collateral in case of depending on the categories, plus 1% commission amount prices will vary. Bonded
any damages of category the store’s Alipay service fee per varies from TP to TP. warehouse being the
expenses incurred products belong to item sold most cost efficient and
under the service direct mail the most
agreement with Tmall costly.
Global

Tmall Global’s most recent fee structure can be found here:

https://rule.tmall.hk/rule/rule_detail.htm?spm=0.0.0.0.34zhwp&id=1891&tag=self
TMALL direct – Fee Structure
Security Deposit

A one-time of 150,000-
300,000 RMB is used
as collateral in case of
any damages of
expenses incurred
under the service
agreement with Tmall
Global
Bonded Warehouse

6 cities

North: Zhengzhou 19 warehouses

East: Shanghai,
Ningbo, Hangzhou
West: Chongqing 400K sq. meters

South: Guangzhou 1.5M packages/day

Bonded Warehouse

Once goods arrive at the bonded

warehouse, Cainiao takes care of the rest

Order Payment
Electronic
Sales Bulk Clearance Domestic Buyer
forecast shipping Order
delivery

Seller Seller ships to Buyer places Logistics After Buyer

estimates Cainiao* order which clearance, receives
potential bonded goes to our product is product
sales of warehouse via system. System matches order, payment delivered
products sea/air using Warehouse and logistics data for custom nationwide
own forwarder. picks, packs clearance.
and ships out

Cainiao* Network is Alibaba’s logistics arm

Bonded Warehouse
Advantages vs. Disadvantages
• Guaranteed Fast Lead Time • Inventory Commitment
Cainiao guarantees that every order will arrive within a Sellers must allocate a part of their inventory to
week of consumer purchase be placed in China
• Stable Inventory • Expiration
Inventory is stored beforehand to prevent stock-outs during Products that are not sold quickly may expire
promotion events and discarded
• Lower Total Costs
Sellers can bulk ship to local bonded warehouse, resulting
in lower transport cost per item
• Low Import Taxes
Under the cross border scheme, taxes are at 11.9%

• Products with stable demand

Suitable for • High turnover
• Long shelf life
Consolidated shipping (warehouses outside China)

Japan:
London S. Korea Tokyo &
Osaka
9 countries
Hong
US: L.A &
Kong
Newcastle
Frankfurt 13 warehouses

Taipei
AU: Sydney
& Melbourne 100K sq. meters

100K packages/day
NZ: Auckland
Consolidated shipping

Order

Once goods arrive at the

Buyer
Cainiao warehouse, Cainiao
places order
takes care of the rest

Order Electronic Payment

Clearance

Pick & Pack, Overseas Air freight Domestic Buyer

Outbound warehouse delivery
Logistics

Seller packs, print Product Export custom After clearance, Buyer

label prepares arrives at clearance and System matches order, product is receives
product for ship Cainiao freight to payment and logistics data delivered product
out warehouse China for custom clearance. nationwide
Consolidated shipping
Advantages vs. Disadvantages
• Guaranteed Delivery • Longer Lead Time
Cainiao guarantees that every order will arrive within 2 weeks, if Lead time is double that of a bonded warehouse
not we will compensate the consumer. [brands have to send order in China
to warehouse within 48 or 72 hours]
• Higher Cost
• Domestic shipping Higher costs compared to the bonded
Sellers ship to Cainiao warehouses in their home country warehouse model
(if applicable)
• Pilot Testing
For new products, sellers can test market demand before
committing to a bonded warehouse solution
• Low Import Taxes
Under the cross border scheme, taxes are at 11.9%

• Seasonal demand
Suitable for • New products
• High variety, low turnover
Global Fulfillment Center (GFC)
AVAILABLE IN AUSTRALIA & HONG KONG ONLY*

Once goods arrive at the

Cainiao warehouse, Cainiao
takes care of the rest
Bulk shipping to AU
or HK warehouse

GFC Payment
Order Electronic
Clearance

Order Stock, Domestic Buyer

Pick & Pack, Air freight
delivery
Outbound Logistics

Buyer Warehouse Export custom After clearance, Buyer

places order receives order clearance and System matches order, payment product is receives
on platform and prepares freight to China and logistics data for custom delivered product
ship out clearance. nationwide
*As of March 2017
Global Fulfillment Center (GFC)
Advantages vs. Disadvantages
• Consignment service • Higher Cost
Cainiao picks, packs, and takes care of the order once goods are Higher costs compared to the bonded
in the GFC warehouse model
• Domestic shipping (AU or HK only)
AU or HK based sellers ship to Cainiao GFCs in their home
countries
• Pilot Testing
For new products, sellers can test market demand before
committing to a bonded warehouse solution
• Low Import Taxes
Under the cross border scheme, taxes are at 11.9%

• Sellers with products in Australia or in Hong Kong

Suitable for • Sellers who prefer to outsource picking and packing
• High variety, low turnover products
Import Taxes by category
Tax Rate Tax-Free Order Threshold (RMB)
Category Direct Mail (Logistic Cross Border Direct Mail (Logistic Cross Border
Option 4) (Logistic Options 1, 2, 3) Option 4) (Logistic Options 1, 2, 3)
Mother & Baby
15% 333
Food
11.9%
Apparel & Shoes
30% 166 N/A
Electronics
Wine 60% 21% 83
Cosmetics 60% 11.9% – 26.35% 83

Cosmetics and Skincare category: High-end or for the masses?

Price / Net Weight Average unit price
>= 10RMB < 10RMB >=15RMB <15RMB
Classification (Tax Rate) High-end (26.35%) For the masses (11.90%) High-end (26.35%) For the masses (11.90%)

Note: Government regulations change often in China. Connect with your Cainiao contact person for the latest rates
On-Boarding on TMG – Steps Involved

Assessment
1
& Preparation

Store Launch Operation &

Approval 3 4
Development Optimization

Store
2
Application