Study Proves Tmall Gives Online Vendors Lowest Cost Per Customer - WRCBtv.com | Chattanooga News, Weather & Sports

Study Proves Tmall Gives Online Vendors Lowest Cost Per Customer

Posted: Updated:
“For the FMCG category, a Tmall customer costs $1.38, while an independent site spends $3.59. For apparel, the ratio is $6.11 to $10.40. For cosmetics, $14.03 to $38.77.”
Rapid growth and expanding services make Tmall more affordable than stand alone sites for selling western products and services.

Web Presence In China has just completed a study of more than 500 western brands with Chinese ecommerce platforms, concluding that Tmall provides significantly lower cost per customer than a stand alone site option.

“We incorporated a range of over 120 criteria for the costs involved in converting Chinese customers with a stand alone site, and benchmarked them against the same processes necessary for converting on Tmall,” says Jenny Xu, a WPIC marketing coordinator who led the research for the study.

“Not only the sunk costs, but ongoing marketing costs factored in show that Tmall sales are less costly to realize in key industries. The average brand studied had to spend $1.16 million to be fully equipped to sell online in China, while establishing a comparable Tmall store averaged $210 thousand, almost one fifth the cost.”

The study also showed that, discounting costs of establishment, ongoing cost per customer was significantly less on Tmall than for a stand alone.

“For the FMCG category, a Tmall customer costs $1.38, while an independent site spends $3.59. For apparel, the ratio is $6.11 to $10.40. For cosmetics, $14.03 to $38.77,” Jenny reports.

“We commissioned the study under the aegis of a client that will use the data as part of a global rollout,” says Jacob Cooke, Web Presence in China CEO. “The cost per customer figures were arrived at by averaging a wide array of PPC, display ad, and programmatic ad rates. We also factored in algorithms for re-marketing, and the higher percentage of first visit purchases on Tmall due to brand equity, versus the lower trust for an unfamiliar stand alone site and payment gateway.”

For establishment costs, rate cards and standard pricing for an array of necessary services, from China hosting to brand localization, were averaged from both a cluster of global and mainland China providers, as well as industry-standard cost per hour for in-house employees.

“The study was conducted over 3 months, and will be refined with ongoing data,” reports Xu. “But even at the lowest end of service rates for establishing a stand alone China ecommerce presence, using outsourced labor from developing countries and less established in-country partners, a basic Magento site with product pages and rich media cost north of $360 thousand. Meanwhile the same amount spent on a Tmall store would cover not only establishment, design, and implementation, but also the first year’s costs for a top-tier China 3PL and a robust marketing campaign launch.”

“The key concern is always China branding,” says Danny Hu, a Web Presence In China Account Manager who specializes in Tmall as a sales channel. “Western companies still have the perception that Tmall is for low-profile brands, and that online Chinese shoppers will perceive a western brand poorly if it is positioned there. Also, western brands are concerned about Tmall’s ability to deliver user experience consistent with their overall digital ecosystem’s.”

“These concerns are less and less relevant, however. Tmall has more than half of China’s exploding online B2C market for a reason: high-trust, high-traffic, and high-performance. If a luxury brand such as Burberry is on Tmall, other western brands can rest assured that Chinese shoppers are not looking at their Tmall presence in a negative light. Also, Tmall is constantly pushing the boundaries of what tools and interaction is possible on a Tmall store, as well as having pioneered the online shopping experience Chinese are used to and expect.”

Most importantly to the study, however, is that thanks in part to Tmall’s huge traffic and high trust, converting customers is a much more cost effective proposition on the platform than on an independent site.

Media Contact
Company Name: Web Presence In China
Contact Person: Karla Sanchez
Email: Send Email
Phone: +10 85803111
City: Beijing
Country: China
Website: www.web-presence-in-china.com

Source: www.abnewswire.com

ReleaseID: 12272

  • NewsMore>>

  • Tony Stewart back at the track, looking to heal

    Tony Stewart back at the track, looking to heal

    Saturday, August 30 2014 12:20 AM EDT2014-08-30 04:20:07 GMT
    Tony Stewart should be back in his comfort zone at a NASCAR track, ready for racing.More
    Tony Stewart took his seat on the podium - unshaven, his eyes glassy - and unfolded a sheet of paper. His voice quivered as he read, pausing to maintain his composure as he described the death of a driver he hit as "one of...More
  • Grundy Co. Yellow Jackets Marching Band

    Grundy Co. Yellow Jackets Marching Band

    Friday, August 29 2014 11:34 PM EDT2014-08-30 03:34:57 GMT
    The Grundy County High School Band's Director says, "for a little band, they can make a good bit of noise!" To Yellow Jackets faithful and band aficionados, it is sweet music. They serenade us with Rocky Top and are our Band of the Week!More
    The Grundy County High School Band's Director says, "for a little band, they can make a good bit of noise!" To Yellow Jackets faithful and band aficionados, it is sweet music. They serenade us with Rocky Top and are our Band of the Week!More
  • UPDATE: Man killed while mowing grass when truck hit him; 3 teens inside truck also died

    UPDATE: Man killed while mowing grass when truck hit him; 3 teens inside truck also died

    Friday, August 29 2014 11:22 PM EDT2014-08-30 03:22:40 GMT
    4 teens inside truck that killed man on his lawn mower; Pinson only survivor4 teens inside truck that killed man on his lawn mower; Pinson only survivor
    Four teens were inside a vehicle that hit and killed 57-year-old Bryan Bartley while he was mowing grass on Thursday evening. Three teens also died in the tragedy. Alexis Pinson survived the crash and is improving, friends say. More
    Four teens were inside a vehicle that hit and killed 57-year-old Bryan Bartley while he was mowing grass on Thursday evening. Three teens also died in the tragedy. Alexis Pinson survived the crash and is improving, friends say. More
Powered by WorldNow
Can't find what you're looking for?

WRCB-TV
900 Whitehall Road
Chattanooga, TN 37405
(423) 267-5412

WRCB Jobs EEO | FCC Public Files

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WRCB. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.