A well known brand had entered China and opened a Tmall store, then a few years later they were forced to close it. The brand released a statement to the press citing “Taobao counterfeits” & explaining that they couldn’t compete.

But that wasn’t the real reason. 30 days before they closed the store, the CFO in China had us in to do an audit on their Tmall store. Contrary to what they released to the press, their failure was rooted in 2 things, neither related to counterfeits.

The 1st was they had a parallel importer based in Beijing who was purchasing discounted brand goods from the brand’s offline wholesale distribution network overseas, bringing them to China & selling them for less than the brand could!

But, the REAL reason for failure was that the brand had advisors that thought they were very clever to set up a private template inside Tmall. A HUGE mistake.

Little known fact, when you’re on the private template in Tmall, you are not in the Taobao search index. In our portfolio of Tmall stores that we operate, 85-90% of all transactions originate through the Taobao app. And my point isn’t to belabor the fact that this brand failed. It’s that it doesn’t matter how big you are. China can eat you alive very quickly. It’s a minefield.

#China #eCommerce #Tmall #Taobao #TP #WinnerTakesAll