The Difference Between Tmall & Taobao | Advantages & Disadvantages
Tmall is a B2C (business to consumer) platform and Taobao is a C2C (consumer to consumer) platform.
In this article:
- What are these platforms and how are they different?
- Why are there two platforms?
- What are the advantages and disadvantages of each platform?
- Problems in running a Tmall store (And how to set up a successful one)
What are these platforms and how are they different?
Both Tmall & Taobao are ecommerce platforms that belong to the Alibaba Group. The most basic difference is that anyone with a valid Chinese ID can open a Taobao store whereas only verified businesses can open Tmall stores.
But it can be confusing because if you said either..
Tmall is a part of Taobao, or
Tmall and Taobao are independent platforms
You’d always be correct. They’re both true.
To the regular shopper: Tmall is just a part of Taobao
Everyone in China uses the Taobao mobile app and they know that Tmall is a part of Taobao. When you search for any product, both Tmall and Taobao listings show up in the results list. Even though there is an independent Tmall mobile app, almost nobody uses it. Taobao is the single gateway to all stores in the Alibaba ecosystem.
To sellers: Tmall is all that matters
That’s because Alibaba hugely favors Tmall over Taobao. Whenever people search for products in the Taobao app, Tmall listings get most of the top 10 search results. The first few search results get the majority of traffic so naturally Tmall stores earn more revenue.
On top of that, Alibaba’s ecosystem is heavily driven by promotional events. Most of the time, only Tmall stores have the right to even apply to high profile events.
So for brands launching in China, it’s a no-brainer. Tmall is the only choice. Here’s a video explaining everything in 90 seconds.
Watch on Youtube: https://www.youtube.com/watch?v=vHbDtbIfNyA
Why are there two platforms?
There used to be only a Taobao with no Tmall. Taobao launched in 2003 and it was (and still is) very easy to launch a store. But it was rampant with counterfeits and Alibaba’s founder Jack Ma did not want to let that define his brand.
Tmall was born in 2008 to fix Alibaba’s image. It’s very hard to open a Tmall store. There’s more bureaucracy involved than opening a physical retail store. By having a platform dedicated to verified businesses, Alibaba was able to boost consumer confidence in its name and the rest is history.
Even to this day, Tmall and Taobao exist as independent platforms but not for long. Alibaba announced in January 2022 that it will unify Tmall and Taobao for a better user experience.
What are the advantages and disadvantages of each platform?
- For sellers, Taobao isn’t entirely out of the question.
- Anyone can set up a store.
- No platform commission taken away on each sale
- It gets very little traffic compared to a Tmall store.
- No access to most high profile events.
- Less consumer confidence in Taobao stores.
But a Taobao store would only make sense to individuals with very limited budget.
- It’s what Alibaba actively markets to its consumers. All major events like Singles Day (Nov. 11) use the Tmall name.
- In Taobao’s search results, the best spots always go to Tmall stores
- High consumer confidence
- A lot of paperwork just to launch a store
- Relatively high upfront costs and day-to-day operating costs
Tmall is clearly the only viable choice for any serious brand targeting the Chinese market. But running a successful Tmall store is not as simple as choosing Tmall over Taobao.
Problems in running a Tmall store (And how to set up a successful one)
Competition is extremely fierce on Tmall, both with Chinese and other foreign brands. That can lead to very expensive marketing costs.
It’s easy to lose control of pricing and inventory when distributors undercut you.
There’s a lot of overhead just to run the day to day operations of a Tmall store.
Tmall stores get access to events, but it doesn’t mean the access is guaranteed. It can be very difficult to earn a spot in big events.
These are just a few of many issues in the world of Tmall. You need to find a partner that understands how to deal with all these issues effectively.
Here’s our ebook on running a successful Tmall store.
It shows you a checklist to help you assess whether you’re ready to enter the Chinese market, exactly what it costs to run a store, as well as insider strategies for market research, activation and building a business case.
Also check out our other publications. We have other free ebooks on:
- Why You Must Brand Your Way into China – The hidden factor behind every success story in China
- Why Brands Struggle in China – Real stories of brands and their struggles in running ecommerce in China