E-commerce in China operates on a different scale and through different channels than e-commerce in the West. The platforms — Tmall, JD, Douyin, Pinduoduo — control the customer relationship, not the brand. The compliance requirements — product registration, labeling, cross-border logistics, payment processing — are dictated by the platform and by the Chinese regulators. A foreign brand that approaches Chinese e-commerce as an extension of its Western e-commerce strategy fails to understand the fundamental differences.
Here’s how the platform ecosystem works and what foreign brands need to do to sell online in China.
The Platform Landscape
The Chinese e-commerce market is dominated by a small number of platforms, each with its own customer base, its own rules, and its own commercial model. Alibaba’s Tmall is the premium business-to-consumer platform — the platform where established brands sell to Chinese consumers. JD.com is the direct retail platform — JD buys products from brands and sells them to consumers, or brands operate their own stores on JD’s marketplace. Douyin — the Chinese version of TikTok — has built a massive livestream e-commerce business where products are sold through short videos and livestreams. Pinduoduo is the discount platform — strong in lower-tier cities and rural areas, with a group-buying model and aggressive pricing.
A foreign brand that’s entering Chinese e-commerce should start with Tmall Global — the cross-border e-commerce platform that allows brands to sell to Chinese consumers without a Chinese legal entity. Tmall Global is the lowest-barrier entry point — the brand opens a store on Tmall Global, ships products from a bonded warehouse in China or from the brand’s home country warehouse, and pays a commission to Tmall. The brand doesn’t need a Chinese business license, a Chinese bank account, or a Chinese tax registration.
Tmall Global is limited to consumer goods that are on the positive list — the list of products approved for cross-border e-commerce. The positive list covers most consumer goods — cosmetics, food, health supplements,母婴 products, apparel, electronics — and a brand whose products are on the list can sell through Tmall Global without the full Chinese product registration. A brand whose products are not on the list — pharmaceuticals, certain food categories, products requiring Chinese certification — must go through the general trade route with full Chinese product registration and a Chinese legal entity.
The next step is Tmall Domestic — the domestic version of Tmall for brands with a Chinese legal entity. Tmall Domestic requires a Chinese business license, a Chinese trademark registration, full Chinese product registration, and a Chinese bank account. The barrier is higher than Tmall Global, but the market reach is broader — Tmall Domestic is the platform that Chinese consumers trust for authentic branded products, and a brand that’s on Tmall Domestic has credibility that a Tmall Global store doesn’t.
The Store Setup
Opening a store on a Chinese e-commerce platform requires the brand to provide documentation that demonstrates its legitimacy as a brand and the authenticity of its products. For Tmall Global, the documentation includes the brand’s trademark registration in its home country, the brand’s authorization for the store operator — the Chinese company or the individual that will operate the store — and the product registration or the product compliance documentation.
The store operator is the entity that operates the store on behalf of the brand. The store operator can be the brand itself — if the brand has a Chinese legal entity — or a third-party e-commerce operator — the TP, or Tmall Partner, a specialized agency that operates stores on Tmall for foreign brands. The TP is the more common choice for a foreign brand that’s new to Chinese e-commerce — the TP manages the store setup, the product listing, the marketing, the customer service, and the logistics, and the brand provides the product and the brand assets.
The store setup fee varies by platform and by product category. Tmall Global charges an annual service fee — typically several thousand to tens of thousands of dollars depending on the product category — plus a commission on each sale — typically 2% to 5%. Tmall also charges a deposit — a security deposit that’s refundable when the store is closed — of several tens of thousands of dollars. The setup costs are significant, and a brand that’s testing the market should budget for the first year of platform fees and the TP fees before the first sale is made.
The Product Listing
The product listing on a Chinese e-commerce platform is more detailed and more heavily regulated than a listing on Amazon or a brand’s own website. The listing must include the product name, the product description, the product specifications, the product images, the price, and the customer reviews and ratings. The listing must also include the product registration information — the registration number, the registration certificate, the manufacturing license — and the product labeling — the Chinese-language label with the product name, the ingredients, the manufacturer, the production date, the shelf life, and the applicable standards.
The product images are a critical element of the listing. Chinese e-commerce product images are highly stylized — the product is photographed in a studio setting, with model images for apparel, with lifestyle images showing the product in use, and with infographic images showing the product’s features and benefits. A listing that uses the brand’s standard Western product images — a simple product-on-white-background photograph — looks amateurish to Chinese consumers. The listing should invest in professional Chinese-style product photography.
The product description is also more detailed than a Western listing. Chinese consumers read product descriptions thoroughly before purchasing, and the description should answer every question the consumer might have — the material, the dimensions, the weight, the usage instructions, the care instructions, the warranty information. A description that’s a one-paragraph summary loses customers to competitors with more detailed listings.
The Logistics
Chinese e-commerce logistics are faster and more reliable than in most Western markets. A product ordered on Tmall or JD before midday is typically delivered the same day or the next day in major cities, and within two to three days in smaller cities. The speed is a consumer expectation — a Chinese consumer who waits a week for a delivery is an unhappy customer, and the negative reviews will reflect the delivery time.
The logistics for a foreign brand selling through cross-border e-commerce are slower than the domestic standard. A product shipped from a bonded warehouse in China is delivered within two to three days — similar to domestic delivery. A product shipped from the brand’s home country warehouse is delivered within one to two weeks — significantly slower than the domestic standard. The cross-border delivery time is a competitive disadvantage that the brand must address through pricing, through product differentiation, or through the bonded warehouse alternative.
The bonded warehouse model stores the products in a bonded warehouse in China — a warehouse in a free trade zone where the products are stored duty-free and VAT-free until they’re sold. When a consumer purchases the product, the product is cleared through customs and delivered to the consumer. The bonded warehouse model combines the cross-border e-commerce product registration advantages with the domestic delivery speed, and it’s the optimal logistics model for a cross-border e-commerce brand.
The Payment and Settlement
Chinese e-commerce payments are processed through the platform’s payment system — Alipay for Tmall, WeChat Pay and JD Pay for JD, and the platform’s own payment system for Douyin and Pinduoduo. The platform collects the payment from the consumer, deducts the platform commission and the payment processing fee, and remits the balance to the store operator’s account.
The settlement period — the time between the consumer’s payment and the brand’s receipt of the funds — varies by platform and by the store operator’s status. A new store on Tmall may wait 15 to 30 days for the first settlement, with subsequent settlements on a weekly or bi-weekly basis. The settlement delay is a working capital challenge for a brand that’s funding the product inventory and the logistics costs upfront and waiting for the settlement to recover the cost.
The cross-border settlement adds a foreign exchange dimension. The consumer pays in RMB, the platform settles in RMB to the Chinese bank account of the store operator, and the store operator remits the RMB to the foreign brand in a foreign currency. The remittance requires foreign exchange documentation — the e-commerce transaction records, the platform settlement statements, the tax payment certificates — and the foreign exchange controls apply to the remittance.
The Marketing
Chinese e-commerce marketing is dominated by two channels: the platform’s internal marketing tools and the external social media platforms. The platform’s marketing tools include search advertising — the brand pays to appear at the top of the search results for relevant keywords — display advertising — banner ads on the platform’s pages — and participation in the platform’s promotional events — Singles’ Day on November 11, the 618 Shopping Festival in June, and other platform-organized sales events.
The external social media platforms — WeChat, Weibo, Douyin, Xiaohongshu — drive traffic to the brand’s store through content marketing, influencer marketing, and social media advertising. The brand creates content — articles, videos, livestreams — that introduces the brand and the products to Chinese consumers and that links to the brand’s store on the e-commerce platform. The content marketing is typically managed by the TP or by a separate social media agency.
The livestream e-commerce model — where a host presents the products in a livestream and the viewers purchase the products through links in the livestream — is a distinctive Chinese e-commerce channel. A successful livestream can generate millions of dollars in sales in a few hours, and the top livestream hosts — Viya, Li Jiaqi, and others — are celebrities in their own right. A foreign brand that’s entering Chinese e-commerce should include livestream e-commerce in its marketing plan.
