Tmall’s Eric Li Health Product Lead Explains “TOF”

March 6, 2019 – Alibaba’s Tmall global team introduced its offerings to an audience of 80 at Natural Products Expo West. In attendance were leading dietary supplement companies, who what to tap into the China market through cross border e-commerce. Tmall has three options for companies.

The first is Tmall’s “TMG” or Flagship Store concept. This is where a company has their own space within Tmall’s environment in order to market and direct traffic to the virtual shop. This option requires high brand awareness in China and a large team to manage the shop including customer service, returns, marketing, maintenance, sales promotions etc. Most companies will hire a third party or “TP” company to manage the daily operations of the shop. This can cost in excess of US$10,000 per month and in some cases much more. In this scenario, products are typically imported and held in one of China’s Free Trade Zones, so that delivery to end user will be just a few days.

The second option is “TDI” or Tmall Direct Import. This also requires high brand awareness and products that are fast movers. In this case, Tmall will select products they know will sell quickly and store in their warehouse in Hangzhou, China.

The third and new option is “TOF” or Tmall Overseas Fulfillment. This is targeting small and medium sized companies that are new to China. Products will be stored in a Tmall warehouse in Los Angeles area and shipped directly to consumers as they purchase. This takes longer to get to the consumer, but offers the supplement company a less risky and costly way to test the China market utilizing a consignment model.

Jeff Crowther addressing the audience

HPA-China’s executive director Jeff Crowther also gave a presentation on China’s overall regulatory and market environment. 2018 and first quarter of 2019 have seen some market changes. For example, the creation of State Administration of Market Regulation (SAMR), which took over regulatory oversight from China FDA. Also a variety of issues, which has placed a spotlight on the industry such as the direct selling company Quan Jian misrepresenting their products functions and the continuing issue of companies taking advantage of unknowing senior citizens with over priced products that promise drug type benefits.

China continues to be a focal point for U.S. and other international supplement companies wishing to expand their global presence. China’s supplement industry is worth approximately US$30 plus billion and is growing at 10%. If you haven’t already jumped into the market, NOW is the time to get involved. Contact HPA-China to find out how. Send us an email at: (Source: HPA-China)

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