Taobao is a Chinese online marketplace where small businesses and individuals can sell their wares. Currently, TaoBao is the largest e-commerce store globally, with over 600 million monthly active users and over 1 billion products. It accounts for more than 60% of all e-commerce sales in China.
Taobao caters to the medium-low end market mainly occupied by Chinese companies, with domestic-made products for their local audience. Their sister brand, TMall, is the higher-end brand name hosting store, and its users are more open to international brands.
So, how can you capitalise on the massive opportunities the Chinese e-commerce market presents if your small business is based in the UK? Keep reading to find out how to sell on Taobao from the UK and what it will take to get set up.
Can overseas brands sell on Taobao?
At first glance, the answer is no. An international brand cannot open a Taobao store if they are not based within mainland China. However, certain categories on the platform do allow sales from businesses that open subsidiary companies in China.
China allows foreign nationals to own both limited liability companies and partnership enterprises on their own or with a Chinese partner. Of course, you could also work with a Chinese company to operate through Taobao if you choose, but that could affect your profit margins.
As Chinese customers mainly use Taobao, you'll need to find a local product supplier to work with and buy Chinese-made products. As mentioned, TMall is a higher-end, more international option, but the setup costs are higher.
Another obstacle foreigners might face when scoping out how to sell on Taobao is that the website is written in Chinese. As a result, you or a business associate must speak or understand a little of the language to navigate the set-up and operate on the platform effectively.
How to set up a company in China
To sell on Taobao, you first need to register your company in China. Please note, you cannot use a postbox company, with a placeholder office or virtual location; you will have to follow the formal process to establish your company on the Chinese mainland.
- Secure an office rental contract. You need to have legitimate business premises, so you will have to pay a deposit as well as a few months’ rent before you can obtain a business licence application.
- Fill out a business licence application. Most applications take up to six months to process, and company incorporation will cost around 20,000-30,000 RMB.
- Verify your identity by taking copies of your passport as part of the application process.
- Open a business bank account for your operation in China. Later, you will link this to your Taobao account. Many international residents use ICBC, Bank of China, or China Merchants Bank.
How to create your Taobao store
Once your business is registered and your bank accounts are prepared, you can set up your Taobao online storefront.
First, set up an account on Taobao and register as a seller.
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- Open up to 10 local currency accounts, with local sort codes, account numbers and IBANs
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The next step is to connect your store to Alipay. Like Taobao itself, Alipay is a service provided by the Alibaba group. It's a commonly used payment method not only online, but in brick-and-mortar stores in China — much like how Westerners might use ApplePay for everyday transactions.
Customers purchase products from your Taobao store using Alipay. Alipay then holds the money until your buyer receives their product and confirms their satisfaction, upon which the seller is then paid.
Next, you will need to verify your identity with appropriate documentation, and then you will be able to customise your storefront.
Now comes the fun part — you can create your store to make it eye-catching and unique . Include your logo, and any products you think are potential best-sellers in your banner imagery. New customers who have never seen your brand before will need a clear idea of what you offer from the very first moment they land on your page.
You'll also have to complete some Taobao admin, such as connecting any plugins you want to use and setting up Ali Wang Wang (the Taobao customer service portal). If you do not speak fluent Chinese when engaging with customers, or you do not want to manage your customer services on this platform, installing Ali Wang Wang will be an essential step.
Now you'll be able to upload your product listings. The individual products are also referred to as “babies” (just in case you think your translation is off). Make sure to include high-quality pictures and videos of the products and well-written (and effectively translated) descriptions.
And just like that, you're ready to trade. You can use Taobao's marketing tools to promote your store and boost the audience reach of specific products. Marketing your products within the Taobao platform can help you establish your international venture faster.
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When setting up shop in new territories, you'll need trustworthy partners to support seamless transactions.
Every brand needs an efficient supply chain with no delays. So, make sure that you can keep up with demand by partnering with an international payment gateway like WorldFirst. WorldFirst offers your business an innovative solution to transferring currencies cross-border –– you can trade like a local, making same-/next-day payments on 97% of currency transfers. All you have to do is authorise transfers before the cut-off times, and WorldFirst handles the rest.
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