Tmall Global sales surge by tenfold

Alibaba claims 1,000% rise in 9 months in response to foreign report

Alibaba Group Holding announced Monday that the monthly sales on its e-commerce platform Tmall Global had surged more than 10 times since its launch, after a foreign newspaper said it had failed to help overseas retailers make inroads in the Chinese mainland market.

The monthly transaction volume of Tmall Global, which is intended to help overseas brands reach mainland customers, had surged over 1,000 percent in November from February, Alibaba said in a statement sent to the Global Times, without specifying the sales figures.

This is the first time that Alibaba has disclosed the business performance of Tmall Global, after the Wall Street Journal (WSJ) reported on December 22 that Tmall Global had failed to help inter-national merchants reach out to the mainland market through the platform.

Alibaba said so far around 5,400 overseas brands from 25 countries and regions had opened stores on Tmall Global, and the sales revenue of more than 30 overseas retailers such as Costco, Nature's Bounty, Sugar & Spice and Kirindo had surpassed 10 million yuan ($1.6 million).

Sugar & Spice, a Taiwan-based candy maker, said in the Alibaba statement that it sold 34,000 packages of candies on this year's Singles' Day (November 11), and its sales revenue through Tmall Global is three times that on its own website.

Costco Wholesale, the second-largest US retailer after Wal-Mart Stores Inc, launched its mainland business through Tmall Global on October 12. Its sales revenue surpassed 22 million yuan on Singles' Day, with more than 300 tons of nuts and cranberry snacks sold.

Five overseas merchants achieved sales revenue of over 10 million yuan on this year's Singles' Day, and more than 100 overseas merchants achieved sales revenue of over 1 million yuan, Alibaba said. But these figures are less impressive than that of Tmall's mainland retailers, topped by smartphone maker Xiaomi with sales revenue of 1.56 billion yuan for that day.

"Tmall Global's business is still in the primary stage as it was just launched less than a year ago, and many consumers began to know the online shopping platform after Singles' Day," Wang Xiaoxing, an analyst with IT consultancy Analysys International, told the Global Times Monday

The WSJ report said about 70 percent of the stores on Tmall Global were doing "almost no volume," citing Jacob Cooke, chief executive of digital marketing agency Web Presence in China.

According to Wang, most overseas merchants had failed to understand Chinese consumers' online shopping appetite.

"Products sold by overseas merchants are mostly mid- and high-end products, and they usually do not offer as much discounts as mainland retailers do," he said. "Difficulties in goods returns and replacements also hindered consumers' enthusiasm."

But analysts said the cross-border e-commerce business is still promising. According to estimates from consultancy iResearch, China's cross-border e-commerce transaction volumes are expected to reach 5.2 trillion yuan in 2015 from 3.1 trillion yuan in 2013.

More than 100 overseas retailers, including French cosmetic firm Cosmetic Valley, British healthcare retailer Holland & Barrett, and German supermarket chain Metro are waiting to set up stores on Tmall Global, Alibaba said.

Tmall Global is facing competition from global e-commerce giant Amazon.com Inc, which has allowed mainland consumers to buy products directly from its overseas sites since October.

Alibaba said Monday that Tmall Global had reached cooperation agreements with bonded areas in five cities - Shanghai, Guangzhou, Zhengzhou, Hangzhou and Ningbo - that are involved in a pilot program for cross-border e-commerce services.

Unlike Amazon's direct shipping services, Tmall Global encourages overseas merchants to ship goods in containers to these bonded areas first and then start online sales, which can ensure that mainland consumers can receive goods within five working days.

"Tmall Global is more efficient than Amazon in goods delivery," Tian Rui, a 32 year-old online consumer in Beijing, told the Global Times Monday.

Tian said she bought some shampoos and face masks from the Kirindo store on Tmall Global in late November, and just six days later she received the goods.

"It took longer, usually three or four weeks, for me to get my orders from Amazon. A lot of that time was wasted in customs clearance," she added.