Selling Products to the Chinese Market on Taobao

Wanting to market your product to the Chinese market? Then you have probably heard of Taobao, the number one e-commerce site in China owned by Alibaba Group.

China is the world’s largest online shopping market, with about 467 million online consumers spending about 26.1 trillion yuan—and increasing every year. For this reason, starting a business on Taobao can be very attractive because this online store eliminates or significantly reduces many traditional business obstacles such as rent, storage and staff. This reduces the seller’s per-product cost, which can mean lower prices for customers. Using Taobao to establish a presence and develop brand equity can also help build interest in a product, and serve as a stepping stone to establishing a bricks and mortar shop in China.

Similar to E-Bay, sellers are able to post goods for sale either through a fixed price or auction. However, auctions make up a small percentage of transactions. The majority of the products are new merchandise sold at fixed prices. Buyers can assess seller backgrounds by information available on the site, including ratings, comments and complaints.

Ready to get started selling on Taobao? Let’s go!

Step 1 – Create An Account on Taobao

To set up a Taobao store, you need to have an account with a Chinese bank, as well as a Chinese resident card (Shen Fen Zheng) or foreign passport. If you have these things simply register a new account on Taobao. However, if you are a corporation without a presence in China, Taobao is not the right solution for you. Instead, you will need to use Tmall Global which can be used by corporations that do not have a base in China.

Once you answer all the required questions and submit your request, you will need to activate the new Taobao account by email. Once the account has been activated, you can start buying and selling on Taobao.

You also need to set up a payment method so that people can purchase your products (or so, as an individual, you can pay for them). Alipay, another Alibaba product, is the primary payment method used on Taobao.

Step 2 – Market Your Product – Organic Methods

To ensure your product comes up early in the search results, it is very important to use the keywords that people are searching on the platform. Examples of keywords include the brand and model, product features, adjectives describing the product, etc. This will require some research about the most searched keywords on Taobao so it’s best to obtain insight from native Chinese speakers familiar with the platform. In other words, don’t simply translate English keywords and assume they will generate success in Chinese.

Another great free way to market your brand and your product is through the Taobao Bulletin Boards (BBS), which are essentially website forums. Having your product mentioned in a post is a great way to promote your store because those reading will frequently click the link to your store.

Step 3 – Market Your Product – Paid Methods

A paid search ad (Zhi Ton Che) is a good way to have your product show up higher in search results.

There are a few ways to advertise on Taobao. One is via a search ad through Zhi Tong Che. This is basically similar to a Google keyword ad. For example, if you are searching for “eye cream”, a brand such as Estée Lauder can pay for that keyword, resulting in their product appearing first. Another option is paid display ads (Zuan Zhan) which provides a more visual representation of the product or brand.

Taobao also has a content marketing platform called 微淘. This allows Key Opinion Leaders (KOLs) and stores to promote products/brands in various ways, such as though shopping lists, Q&A, short videos etc. Taobao then recommends some of the content to an individual’s homepage based on their interests.

Step 4 – Plan for Sales Campaigns

The pink banner on the Taobao homepage shows a promotion for 520 day, a Chinese celebration similar to Valentine’s Day where people commonly purchase and gifts.

Taobao will often organize sales campaigns based on various themes. As long as your list of items qualifies, you can participate in these events to promote your store. For example, the biggest online shopping day in China is Single’s Day (光棍节) on November 11. A Single’s Day sales event will offer a series of promotions and deep discounts in one day, generating billions of dollars of online transactions. Other popular days to organize sales campaigns include 520 Day (May 20), the 618 shopping festival (June 18) and Double 12 (December 12). Plan to take advantage of these important online shopping days as you develop your strategy.

Key Takeaways

Although big brands such as Nike, Adidas and Samsung have been taking advantage of China’s powerful e-commerce market opportunities, smaller companies can also benefit from the popularity of online shopping in China by selling their products on Taobao. However, if you are looking to expand into Taobao, you will need to adapt your marketing strategy to avoid cultural misunderstandings and pitfalls.

Not a Chinese company? Then Taobao is not the right solution for you. Instead, learn more about Tmall Global which can be used by corporations that do not have a base in China.

Not sure if e-commerce is right for you? There are plenty of other ways to market your products to Chinese speaking people, both locally and abroad. Setting up accounts on WeChat, using cultural marketing to adapt your message to different markets, and organizing Chinese language media buys are just a few of the areas we have experience in. Contact us to discuss your goals and we’d be happy to recommend various options that are suitable for your business.