Alibaba has announced that it intends to attract over 1,000 new global brands to their marketplace over the next year. In particular, they’re focused on beauty and nutritional supplements.

This creates quite an opportunity for established TP (third-party) firms and other cross-border service providers that are often based in-country but are necessary because they work with out-of-country brands on what they need to be successful.

But Tmall is doing its own as well. They are introducing English-language customer service reps, and other marketing goals and programs to help brands be successful. Where is this coming from?

There are reports that Alibaba's selection is hurting as a result of the Coronavirus crisis - particularly foreign brands that Chinese consumers crave in categories where authenticity and integrity as involved, such as luxury, baby, beauty, and some CPG. Resellers are used to taking inventory risk and flying those goods into the country.

With the pandemic, those trips have ended. Resellers are a part of any large global marketplace, and offer a way to see which brands resonate without having to attract a brand directly.

Min Yang weighed in on my initial LinkedIn post with some great insights. I’ll share her words in full:

Tmall/Taobao, of Alibaba, focus on China consumer market while the threshold is high. Brands can hardly succeed without a local TP. Also no out-or-China TP/agency exist because, oh well, you need to be in China to sell in China market.

Everything is China is different. Nothing we know in US works there. It’s another set of tools of google and social media. Plus mobile and social commerce in China are way ahead of US. Chinese consumers would not buy anything new or they have never heard of. So investment in marketing, KOL, is critical. Competition and advertising cost on tmall is worse than Amazon. Think about how much we dislike Chinese sellers on Amazon, now you are going in their territory.

Amazon has a strong marketplace BD team, I would not worry about their continuing growth in sellers. International expansion will be the future of growth though - just not in China.

I agree with Min - any US seller would be hopeless to succeed in China on their own.

Brian Maggio chimed in to say “Unless they've loosened the 1st mile requirements, things are going to have to settle substantially before merchants can hit the 1st mile requirements for Tmall Global. Brands are struggling to get orders out the door domestically in a timely manner right now, and I can't see the penalties being worth the effort until order velocity improves to pre-pandemic levels.”

Mark Gray added: “The best thing Alibaba can do is make it easier to integrate with. Hardest Marketplace I ever dealt with and so many failed brands on there. You only hear about the successful ones unfortunately.” I totally agree, they don't make it easy. I was in charge of a project building an integration to TMall Global and it took an extremely long time. You have to think to yourself that it will take at least 5 years to produce any results - that is how committed you have to be.

With all of this being said, I can't help but wonder - what are Amazon and Target's brand expansion plans?