Alibaba’s Tmall Global now features goods from 14,500 overseas brands, 80% of them selling in China for the first time.

Relaxed government restrictions on imported goods bought online and the growing demand among Chinese consumers for foreign goods is driving growth for Tmall Global, an online marketplace operated by Alibaba, according to a report by Chinese research firm CBN Data and Alibaba Group Holding Ltd.

The report says in 2016, Chinese consumers could buy products on Tmall Global in 3,700 categories from brands or retailers from 63 countries, a substantial increase from a selection of 1,700 categories sold by retailers from 50 courtiers a year ago. There are now 14,500 brands selling on Tmall Global, and 80% of those brands never previously sold in China, either online or in stores, according to the report.

In the April of 2016, China adjusted the import tax for goods purchased in small quantities from foreign websites, in most cases making such goods more affordable for China’s middle-class consumers. Many Chinese shoppers are skeptical of the quality of China-made products, and the lower tax rate in categories like cosmetics is boosting online orders. According to research firm iResearch, cross-border e-commerce imports into China grew about 30% to 1.25 trillion yuan ($182 billion) in 2016 and will grow at a similar pace in 2017, with retail purchases accounting for most of those transactions.

While this report focused on Tmall Global, Alibaba’s main rivals, such as JD.com Inc. and the Amazon China unit of Amazon.com Inc. also have created online shopping portals devoted to imported goods.  JD.com is No. 1 in the Internet Retailer China 500, which ranks retailers by their online sales in China, and Amazon China is No. 4. Although Alibaba’s marketplaces account for roughly three-quarters of online retail sales in China, the company is not ranked because it hosts the stores of other retailers and does not sell merchandise itself.

Brands from Japan, the United States and South Korea account for the largest share of sales on Tmall Global, but the CBN/Alibaba report notes that sales from European brands grew the fastest in 2016.

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Chart 2016   Tmall Global top-selling countries

Rank  Country     Best-selling categories         Market share

  1.    Japan     Beauty/diaper/skincare          19.3%
  2.    U.S.     nutrition/formula milk/bag         18.3%
  3.    South Korea  Beauty/Skincare/apparel       13.6%
  4.    German     Food/Kitchenware/Nutrition     8%
  5.    Australia    Nutrition/Food/Coffee          7.9%

Source CBN Data, Alibaba. Market share represents percentage of Tmall Global sales from sellers from each country.

The number of consumers who purchased on Tmall Global more than doubled in 2016, and many of them are young adults just starting their careers, the report says. More than half of new shoppers on Tmall Global are between the ages of 20 and 25 years old, and many live in small or midsized cities where e-commerce provides the only way to buy imported products.

Younger consumers spend a lot on sporting goods, the report says. For example, younger male consumers often buy sports shoes from brands like Nike and Adidas, while women are buying Skechers brand shoes.

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The sales of alcohol products also increased in 2016. Beers made in the U.S. and wines from France and Italy are best-sellers in this category on Tmall Global, according to the report.

Policy changes can have a big impact on sales of imported goods into China. For example, the report notes that the reduced import duties on cosmetics lifted that category into the top spot in sales on Tmall Global, unseating food and children’s products, which had been the most popular categories.

Alibaba acquired a 30% stake in China Business News, parent company of CBN Data, in 2015.

For more Chinese e-commerce data, please click here for the Internet Retailer 2016 China 500.

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