Is It Wise For Zara To Enter Tmall?

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Xiaobian network to introduce the Zara promotion to Tmall, are these brands crazy or smart?

It is reported that since the first website was built four years ago, Inditex SA has completely controlled its flagship.

Zara online sales.

In order to further develop in China, the Spanish retailer plans to partially give up regulation and part of its profits on Internet sales.

Next month, Zara will open a shop on Tmall.

Famous international clothing companies such as Nike, Burberry and Gap have already sold products on Tmall.

Tmall is China's largest e-commerce website with more than one hundred thousand brands, which collects 0.5-5% of sales as a commission.

Zara is one of the most influential Western clothing retailers in China and has 456 stores in China.

But its website in China has been established for two years and has not yet entered the ten thousand most popular websites in China, while Tmall ranks seventh.

"Retailers will set up e-commerce in China, and they will decide to do it through Tmall because of its large user volume."

Jamie analyst Bain said.

"Profitability is not a problem. Tmall has the potential to expand its market share."

This month, Alibaba listed in New York, becoming the world's largest IPO, raising 25 billion dollars.

Now it is higher than Amazon's market capitalization.

To eliminate worries about fake sales, Tmall asked retailers to pay a deposit.

This anti mountain stance has increased its appeal to companies such as Inditex, Chaviaras, an analyst at Barclays Bank.

Barclays estimates that Zara sales increased 20% annually in the years before joining Tmall.

Joining Tmall is likely to further boost its sales.

According to the data, the Chinese market accounts for about 8% of the total Zara sales.

Although Alibaba collects a portion of its profits on Tmall, it lets retailers control their interactions with customers.

CEOPablo Isla of Inditex thinks this is a key factor to attract them.

"This is not the same as selling on our own website, just like opening a shop in a shopping mall."

"China is very important to us," Isla said at a press conference in September 17th.

It is of great significance to China. "