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Chinese Online Business Opportunities for Foreign Companies
Time: 2020-07-09

Chinese Online Business Opportunities for Foreign Companies

Brief introduction of the online marketplaces in China

There are many online marketplaces in China right now. Among those are three most popular ones - Taobao, Tmall and Joybuy. Taobao and Tmall belong to Alibaba Group - the largest E-commerce Group in China. Joybuy belongs to the second largest one - Jingdong Group.

Before considering heading into the Chinese online marketplace, we should know a little more about the differences among Taobao, Tmall and Jingdong. Taobao is the first online market place among the three which was created by Alibaba in 2003. It is a C2C (Customer to Customer) type of online marketplace with the most popular customer base among the three. As the time went by, Alibaba Group created the second one Tmall (which was named Taobao Shopping Mall before) in 2012. It is a B2C (Business-to-Consumer) type of online marketplace. Joybuy was created by Jingdong Group in 2004 and is the third largest in China right now. In the beginning, it focused only on IT and household appliances products. Later it is expanded to cover all kinds of products in 2007. Now it has the second largest population of online customers.

Some statistics regarding the three online marketplaces

Sales data of Double 11 Shopping Festival 2019:
Alibaba Group: 268.4 billion (Tmall and Taobao together); Jingdong Group: 204.4 billion. As we can see from the data, Alibaba group has bigger market share than Jingdong Group. However, the market shares contain Tmall and Taobao. Jingdong also has huge market power when you consider only single online marketplace.

How to register the online marketplaces in China and sell products there?


A. Steps to Register:
1. Register an Alipay Account;
2. Apply for the Alipay Seller Certification (foreign company needs to register a domestic company before it can finish the step);
3. Wait for the web and Alibaba verification of the seller information (usually 1-3 business days);
4. Wait for the payment confirmation sent by Alipay authority to your Alipay account after verification;
Notice: Once you confirm with the payment, the whole Alipay Seller Certification process is finished;
5. Register a Taobao Member Account;
6. Link the Taobao Member Account with the Alipay Account;
7. Go to your own online shop web page to create your own website on Taobao online marketplace


For Tmall, there is one path specifically for foreign businesses or sellers which is called Tmall International.
A. Requirement for Tmall International Sellers:
1. Foreign registered brand;
2. Foreign registered company entity (individual entity is not acceptable);
3. All related documents;
Notice: There are several different types of online stores on Tmall and the requirements vary depending on different product categories.
B. Steps for Registration:
1. Check and prepare all the required documents (you have to decide the store type, the product category and the brand source);
2. Fill out the company and brand information and wait for the review (about 7 business days);
Notice: If your brand is not in the database of Tmall, then your brand needs to be evaluated.
3. Finish the store information;
4. Activate the Tmall business account;
5. Finish the related assignments before setting up your online store;
6. Pay the cash deposit and annual fee;
7. Set up your online store by decorating the website and uploading the product information.

Jingdong (Joybuy):

A. Requirement for Jingdong International Seller:
1. Foreign registered brand;
2. Foreign registered company entity;
3. Foreign identity card;
4. All related documents.
B. Steps for Registration:
1. Preparation before the registration
a. State your brand for the evaluation of Jingdong;
b. Prepare related company documents showing the legality;
c. Review qualification requirement;
d. Open Jingdong Banking Account (2 business days).
2. Apply for the online store application
a. Register a Jingdong account;
b. Fill in the company information;
c. Fill in the store information;
d. Sign the contract with Jingdong
Notice: after the process, wait for the review of Jingdong (12 business days).
3. Finish the Online store opening mission:
a. Finish the contact person information;
b. Account safety verification;
c. Pay the cash deposit and annual fee.

IP Protection Measurement for Online Marketplaces in China

Since you have known that the power of the online marketplaces in China and the easy access to use them to sell your products there, you might also want to know what to do if you find the counterfeit on the online marketplace or your IP rights are infringed there. Take it easy. All these three online marketplaces have effective IP Protection System. If those situations happened, just file a complaint with the related online marketplace and the IP Protection System will do the rest.

Alibaba IP Protection Platform (Taobao & Tmall)

Intellectual property rights holders, including their authorized agents, may file complaints with Alibaba Intellectual Property Protection Platform against products and product descriptions that they believe infringe on their intellectual property rights by submitting deletion requests. In order to protect intellectual property of the users, Alibaba will conduct notification removal processes, proactively identify and remove infringing goods, and assist law enforcement authorities in investigations and enforcement actions.

Scope of Complaints:
1. Trademark infringement, such as abuse of identical or confusingly similar trademarks, and use of counterfeit trademarks.
2. Copyright infringement, such as unauthorized use of third party copyrighted
photographs and sale of unauthorized copies, including copies of books, music, videos, software, games, television programme, paintings and pictures.
3. Patent infringement, such as patent infringement of inventions, utility models and designs.
4. Deliberate circumvention, such as deliberately covering or obscuring the trademark on a product sold.

Alibaba IP Protection Measurement:
If any of the above behaviors occurs, Tmall will delete the products or information posted by the merchants that improperly use the rights of others. Meanwhile, Tmall will also deal with merchants according to the following provisions:
A. Under general violation, the infringing merchant will be deducted 2 points per time;
B. Under serious violation, the infringing merchant will be deducted 6 points per time; the merchant will be deducted 48 points per time after 3 times of serious violation;
C. Under super serious violation, the infringing merchant will be deducted 48 points per time(different situations will be judged by Tmall)
The complaints of IP right holder within 3 days by using the same right will be considered as one complaint. At the same time, depending on the severity of the case, Tmall will take measures such as account closure, store closure, store supervision, restrictions on delivery, restrictions on the release of goods, restrictions on website login, restrictions on the use of the account function, restrictions on sending station letters, and the whole store or individual commodity supervision.

Notice: Under the measurement, there is a point deduction system to guide different treatments which is as shown below:

Accumulated points deduction Treatment measure
Between 12-24 points(including 12 points) Warning
Between 12-24 points(including 24 points) Account restriction for 7 days
Between 36-48 points(including 36 points) Account restriction for 15 days
Between 48-60 points(including 36 points) Account restriction for 30 days
60 points or above Account closure

Legal Requirements and Steps for the Complaint:
A. Information Required for Verification of the IP Right:
1.Business Certificate
2.Power of Attorney
3.Chinese IP right certificate
Notice: a Patent Evaluation Report is required if your IP right is a design patent or a utility model patent.
B.Steps for Enforcement on Alibaba:
1. Verify your IP right by Alibaba: 5-7 working days
2. File the complaint together with the infringement analysis before Alibaba IP Protection Platform to request removal of an infringing product (5-9 working days)
3. The suspected infringing party has three days to reply to the complaint (reverse-complaint), and Alibaba IP Protection Platform will determine whether to remove the infringing products and make a related punishment or not.

Jingdong IP Protection Platform:
The Complaint system of Jingdong online marketplace is similar to the Alibaba system. If you want to know more about how to protect your IP right under Jingdong system, please contact us directly.

For more information on these three online marketplaces and their IP Protection Measurement, please contact us at mail@jiaquanip.com





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