A survey of five thousand mainland Chinese online shoppers, conducted by Web Presence In China, a digital agency located in Beijing, has found that such shoppers do not see Tmall Hong Kong as an attractive platform.
“Eighty-two percent of five thousand respondents said they have never visited the Tmall Hong Kong platform,” says Alba Guedez, who conducts China market analysis for Web Presence in China. “Only three percent of respondents had visited Tmall Hong Kong more than once, and less than one percent had purchased an item from the platform.”
“The results come as no surprise,” says Jacob Cooke, CEO of Web Presence In China. “Tmall Hong Kong was never intended for mainland Chinese shoppers. Rather, this is Alibaba’s strategy to expand its presence in Hong Kong and Taiwan, and chiefly to have as broad a portfolio as possible for its IPO.”
“The downside is the many companies now offering western brands services in establishing and selling on Tmall Hong Kong, and conflating that entity with the real Tmall. Because establishing on Tmall Hong Kong doesn’t require any of the rigor in licensing and fulfillment that the real Tmall does, such services are easy to deliver. Realizing even a fraction of the Tmall sales possible on the original platform will be much harder, of course.”
Indeed, the markets for Tmall Hong Kong’s intended audience, online shoppers in Hong Kong and Taiwan, present a far smaller and more fragmented prospect than that of the real Tmall. The first reason entails population: Taiwan’s 23 million people, and Hong Kong’s 7 million, when combined don’t even match the 38 million of Chongqing, mainland China’s largest city.
The corresponding online markets are similarly miniscule in comparison to the mainland China ecommerce juggernaut. Taiwan’s B2C ecommerce totaled $4.8 billion in 2013, while Hong Kong’s is expected to reach $3.5 billion by 2015. Combined, these total under three percent of mainland China’s $298 billion ecommerce market in 2013.
Another issue lies in the difficulty of Tmall Hong Kong penetrating these smaller markets. Cedric Delzenne, director of the Hong Kong chapter of The Founder Institute, an early stage start-up incubator, calls e-commerce in Hong Kong “a marketer’s nightmare”, explaining Hong Kong is “a relatively small market with a high cost of customer acquisition, one of the highest rates of penetration as regards to smartphones and social media and yet very poor conversion rates from those sources.”
“The growth of China e-commerce is in mainland China,” advises Hilary Li, an account manager at Web Presence In China. “This is where the growth is, and where Tmall already controls half of all B2C commerce. Yes, it is easier to set up on Tmall Hong Kong, and to get your products there. But it is much, much harder to achieve robust sales and growth on that platform. Companies that are committing to a Tmall Store for growth in China are well-advised to establish on the original platform, and direct their efforts where they will have the highest impact, on the mainland.”
Web Presence In China is a full-service China digital marketing firm, headquartered in Beijing, with offices in Vancouver and Perth. Web Presence In China offers tech supported marketing solutions that deliver industry-leading ROI for clients in not only China but also the APAC region.
Company Name: Web Presence In China
Contact Person: Ernie Diaz
Phone: +10 85803111