The two initiatives are both import solutions, namely Centralized Import Procurement (CIP) and Tmall Overseas Fulfillment (TOF). The CIP program is a key part of Alibaba’s new retail business. By leveraging the six procurement centres Alibaba has set up across the globe, the program sources imported goods for all the online and offline outlets within the Alibaba ecosystem, including technology-driven grocery chain Freshippo (also known as “Hema” in Chinese), Tmall Supermarket, and Intime Department Store.
While TOF is a consignment solution that allows brands to present a small batch of products for sale on one of the Tmall Global platform's TOF centres. This gives businesses around the world a chance to try out and fine-tune their product assortments before making a full entry into China. TOF centres are currently available in Japan, South Korea and the US, with plans to expand into Europe later this year.
Speaking at the Tmall Global 2019 Global Partners Summit, Alvin Liu, general manager of Tmall Import-Export said, “These new initiatives on Tmall Global, supported by the entire Alibaba ecosystem and benefiting both current and future partners, are needed enhancements as we strive to meet the rising demand of Chinese consumers for high-quality international products.”
To support these new initiatives, Alibaba’s smart logistics network, Cainiao, will continue to expand its network of bonded warehouses in China, with an aim to triple its total size to three million square meters in three years.
“Over the years, Tmall Global has added a full suite of innovative and value-added services to help overseas brands succeed in the China market, including plugging them into the entire Alibaba economy. The consumer insight from our ecosystem provides Tmall Global partners with a complete view of their customers’ engagements even if they do not have operations in China. These market entry and in-market expansion programs are our key differentiators and have created unique benefits for international brands,” said Liu.
Tmall Global data shows China’s demands for imported goods is gaining strong traction across age groups, regions and categories. The demographic born after the year 2000 - aka “Generation Z" - is the fastest-growing consumer group on the platform. The platform is attracting more shoppers in less developed regions, and in 2018 Tmall Global has successfully propelled the growth of three categories: anti-hair loss products, beauty-from-within products such as collagen drinks, and trendy footwear. China’s Generation Z is also fueling demand for pet products and beauty devices.