Selling online in China is not like setting up an e-commerce operation in Europe or North America. The platforms are different, the regulatory framework is different, and the customer acquisition economics are different. A foreign brand that treats China as just another market to add to its Shopify or Amazon setup will discover that the Chinese e-commerce ecosystem operates by its own rules.
Here’s what foreign brands need to know about platforms, payment, logistics, and compliance before they start selling online in China.
The Platform Landscape
The Chinese e-commerce market is dominated by two platforms — Alibaba’s Taobao and Tmall ecosystem, and JD.com — with newer entrants including Pinduoduo for group-buy and value-focused consumers, and Douyin for livestream-driven commerce.
Tmall is the platform most relevant to foreign brands. Tmall operates two store types — Tmall Global for cross-border sales where the goods are shipped from overseas warehouses, and Tmall Domestic for brands with a Chinese entity that hold inventory in China. Tmall Global allows foreign brands to sell to Chinese consumers without a Chinese company registration, using the cross-border e-commerce customs regime. Tmall Domestic requires a Chinese company, a trademark registration, and product registrations where applicable.
JD.com operates a marketplace model where third-party merchants sell on the platform, and a first-party model where JD buys products from brands and sells them as JD’s own inventory. For foreign brands, the JD first-party model can be attractive because JD handles the logistics, customer service, and returns, but the brand gives up pricing control and customer data.
Pinduoduo has grown rapidly by targeting price-sensitive consumers and rural markets. Its group-buy model — users form groups to buy products at lower prices — is effective for consumer packaged goods but less suited to premium brands.
Douyin, the Chinese version of TikTok, has built a significant e-commerce business through livestream selling. Influencers and brand accounts host livestreams demonstrating products, and viewers purchase directly through the app. This channel is particularly effective for fashion, cosmetics, and lifestyle products where visual demonstration matters.
Setting Up a Tmall Global Store
Tmall Global requires the foreign brand to have a corporate entity outside China, a registered trademark, and a track record of sales in its home market. The brand applies for a storefront, pays a deposit that varies by product category — typically RMB 50,000 to RMB 300,000 — and agrees to an annual service fee.
The Tmall Global store operates under the cross-border e-commerce framework. Products sold through the store are treated as personal-use imports. The consumer pays import duties, VAT, and consumption tax at cross-border e-commerce rates, which are lower than the rates that apply to general trade imports. Products imported through this channel do not require the Chinese product registration, testing, and certification that would apply to products sold through domestic channels.
The logistics for Tmall Global are typically handled through bonded warehouses in China’s cross-border e-commerce pilot zones. The brand ships products to a bonded warehouse in China, and when a consumer places an order, the product is cleared through customs and delivered to the consumer. The bonded warehouse model reduces delivery times to one to three days in major cities, which is comparable to domestic e-commerce.
The biggest challenge for Tmall Global sellers is customer acquisition. Tmall is crowded — millions of products compete for attention, and without a paid advertising budget, a new storefront will receive minimal organic traffic. The cost of customer acquisition through Tmall’s advertising platform is competitive with the cost of customer acquisition through Google and Facebook in Western markets, but the conversion dynamics are different. Chinese consumers comparison-shop aggressively and expect detailed product information, user reviews, and competitive pricing.
Setting Up a Tmall Domestic Store
A Tmall Domestic store requires a Chinese business license — typically a WFOE — a Chinese-registered trademark, and the necessary product registrations and certifications for the product category. The requirements are more demanding than Tmall Global, but the market access is broader — a Tmall Domestic store reaches the entire Chinese e-commerce market, not just cross-border shoppers.
The product registration requirement varies by category. Cosmetics sold through Tmall Domestic require a hygiene license from the NMPA. Food products require import registration with the GAC and a food business license from the local market regulation bureau. These registrations take time — three to six months for cosmetics, six to twelve months for certain food categories — but once obtained, they open the domestic market to the brand.
The advantage of a Tmall Domestic store is that it’s indistinguishable from a domestic brand’s storefront. Chinese consumers don’t see it as a foreign store — they see it as a store that sells an imported brand, which is a more established retail concept in China. The logistics are also simpler because the products are in domestic warehouses and can be shipped through the domestic express delivery network.
Payment and Settlement
Chinese e-commerce payment is dominated by Alipay and WeChat Pay. Together they account for over ninety percent of online payment transactions. A foreign brand selling on a Chinese platform doesn’t need to integrate these payment systems directly — the platform handles payment processing — but a brand that operates its own website in China needs to integrate both Alipay and WeChat Pay.
The settlement cycle on most platforms is fifteen to thirty days after the transaction. The platform withholds payment during the return and refund period and releases it after the period expires. The brand’s Chinese entity receives the settlement in RMB and must account for the revenue, the platform fees, and the advertising costs in its Chinese financial statements and tax returns.
Foreign brands selling on Tmall Global from overseas receive settlement in the currency of the service agreement with Tmall — typically USD for US companies, EUR for European companies — which avoids the China foreign exchange controls and the RMB repatriation issues that apply to domestic sales.
Compliance and Regulatory Considerations
Cross-border e-commerce through Tmall Global operates in a regulatory light-touch zone. Products do not require Chinese market authorization as long as they are sold through the cross-border e-commerce channel and are for personal use. This is a significant commercial advantage, but it also means the regulatory status can change — the Chinese government has periodically tightened the definition of what can be sold through cross-border e-commerce, and products that are legal today could require market authorization tomorrow.
Domestic e-commerce through a WFOE is subject to the full range of Chinese regulatory requirements. Product registration, labeling in Chinese, advertising content regulation — the Tmall storefront must comply with the same rules as a physical store. The platform enforces these requirements aggressively because the regulators enforce them against the platform.
Data privacy is a growing area of regulatory attention. Tmall and JD collect and process consumer data, and the platform’s privacy policy governs the use of that data. A brand that wants to collect its own consumer data — through a membership program, for example — needs to comply with China’s Personal Information Protection Law, which imposes requirements for consent, purpose limitation, and data localization.
The advertising content regulations are specific and enforced. Claims about product efficacy must be substantiated. Comparative advertising — comparing a product to a competitor’s product — is restricted. Advertising to children is regulated. The platform’s content moderation system will flag and remove non-compliant content, and persistent non-compliance can result in store closure.
