Numerous international companies regularly contact HI-COM regarding issues related to the registration process of Chinese e-commerce platforms. With this in mind, we decided to highlight the entry fees that may be required for Chinese e-commerce platforms such as Tmall, Tmall Global, JD, JD International, Koala, and Xiaohongshu.
Entry fees for Tmall include a deposit, an annual software service fee and a sales commission. It’s a very popular chinese e-commerce platform.
The deposit fee is typically either 50,000, 100,000 or 150,000 RMB. Deposits for some categories can be as high as 1 million RMB.
Merchants must pay a deposit when setting up a Tmall store. The deposit is mainly used to ensure that merchants operate according to the Tmall Service Agreement and Tmall Rules so that costs are covered if merchants violate any regulations.
Read more about Tmall deposit standard for merchants in 2020
Tmall annual fee for software service
Regarding this fee, there are two options: 30,000 and 60,000 RMB.
Merchants must pay an annual fee when operating on Tmall.
The annual fee paid at the time of settlement and dependents on the category selected by the merchant.
Tmall commission on sales
Typically the fee is between 2% and 5%, but it can vary from 0.5% to 10% dependent on the category selected.
Tmall provides an entry assistant to calculate the total estimated entry fee.
Entering Tmall Global
Tmall Global deposit
The entry fee for Tmall Global consists of a deposit, an annual fee for technical services, and sales commission.
Usually 150,000 or 300,000 RMB. However, some categories can be as high as 800,000 RMB (e.g. Bird’s Nest tonic)
Merchants must pay a deposit when operating on Tmall Global store. This is used to ensure that merchants operate according to Tmall Global’s specifications, and pay for any damaged products or services according to the Tmall Global Merchant Service Agreement. It also helps to prevent merchants from violating regulations.
Read more about Tmall Global Fee Standards in 2020
Tmall Global annual fee for technical service:
Fee: Between 30,000 – 60,000 RMB.
Merchants must pay an annual fee when operating on Tmall Global. This fee is based on the highest option. For the standard annual fee, please refer to the Annual Fee List of Technical Service Fees of Tmall Global in 2020.
Tmall Global sales commission
Typically between 2% and 5%. The fee can vary from 0.5% to 5% dependent on the category selected.
Merchants operating on Tmall Global need to pay commission according to a certain percentage of their sales. For details on Tmall Global’s commission, please refer to Tmall Global’s Annual Fee Schedule for Technical Service Fees for Various Items in 2020.
The entry fee for JD includes a deposit, a platform usage fee (monthly fee), and commission. The deposit amount and the platform usage fee is pre-specified, whilst the sales commission is charged at a variable rate.
Usually between 30,000 and 50,000 RMB. However, some categories can be as much as 60,000 RMB (computer equipment, storage equipment, etc.), and 100,000 RMB (luxury goods, wine, milk powder, UAV, etc.), and higher (automobiles).
JD platform usage fee (monthly fee)
Unified charge of 1,000 RMB/month. Very few categories are 500 RMB/month or free (ticketing and hotel reservation).
JD sales commission
Usually between 5% -8%. It can vary from 2% to 10% depending on the category, whilst some categories are free of charge. Regarding commission, there are obvious differences among different categories on JD.
Note: Sales commissions include technical service fees such as SOP (Sales on POP) and FBP (Fulfillment By POP) modes. The SOP cost is the same as or bigger than FBP.
(POP- PCtoWAP open platform: it’s the general name of platforms which are created at PCtoWAP.com. In this situation, it means JD Platform)
SOP: JD.com provides merchants with an independent operation back office (uploading products, descriptions and prices by themselves) that is similar to Taobao, delivery within 12 hours of the orders created. Merchants do not need to issue special VAT invoices to JD, but need to issue general VAT invoices to customers for each order.
FBP: JD.com provides businesses with an independent operation back office (where you would be uploading products, descriptions and prices) and storage solution in five warehouse locations: Beijing, Shanghai, Guangzhou, Chengdu and Wuhan. Storage, delivery and customer service will be operated by JD. Other services that JD.com provides to merchants are 211 time-limit arrival (211 stands for 11 am and 11 pm or 2 11s, where the delivery time is guaranteed either within same day or next day depending if order was made before 11 am or before 11 pm), self-pickup, cash on delivery, payment via POS cards. Merchants must be qualified as general taxpayers and need to issue special VAT invoices to JD.
Entering JD Global
When compared with other platforms, JD Global’s settlement fees are much higher and are calculated in US dollars. The fees include a deposit, a platform usage fee (monthly fee) and a technical service fee (commission).
JD International deposit
Most of the merchants are in the $15,000 price range. If the store sells products such as milk powder, medical care and famous luxury goods, the platform will likely charge a deposit of 30,000 USD per store. In addition, very few categories charge as little as 5,000 USD (music, film and television).
JD International platforms apply a monthly fee
It is typically 1,000 USD/month. Very few categories such as clothing bags, sports & outdoor products, jewelry, watches, etc. are $3,000/month.
Technical service fee (commission)
Typically, in the range of 2%-5%. However, some specific categories will increase the rebate rate by 1%, 1.5% or 3%.
Categories with a rebate rate includes mother and child, toys, beauty and skin care, personal care, household cleaning/paper products, household appliances, mobile phones, digital products, computer & office, home textiles, and kitchen utensils.
At present, Koala has not yet officially given a detailed description. According to previous information, the general fee consists of a deposit and sales commission.
Koala sales commission:
If you are new to the platform, please refer to the Koala official website
The application and review time of Xiaohongshu’s entering process depends on the merchants and can be completed as quick as one week.
According to a variety of factors such as the characteristics of merchants, qualifications, and shop types – different merchants pay different deposits.
Xiaohongshu informs the merchant of the deposit when they sign the contract. The deposit needs to be transferred to Xiaohongshu’s account via official bank transfer.
Xiaohongshu sales commission:
Sales commission is the only charge on Xiaohongshu – there are no other marketing, traffic or resource expenses that must be paid (but can be paid if a brand chooses to invest in them). Xiaohongshu informs the merchants of the commission rate as they sign the contract. Normally, it is around 5%.
New to Xiaohongshu? Read how to register store on Xiaohongshu in 2020.
You can also refer to Xiaohongshu merchants entry assistant
Many partners asked HI-COM, “Should I enter onto an chinese e-commerce platform or build my own e-commerce website?”
Here are two effective growth strategies for e-commerce platforms in China:
- Rapid growth mode (high cost, high growth): Firstly, enter third-party e-commerce platforms, then use a WeChat official account and a WeChat Mini program store. Lastly, build your own e-commerce website
- Organic growth mode (low cost, slow organic growth): Firstly, use a WeChat official account and mini program store, then build your own e-commerce website, before finally entering a third-party e-commerce platform.
The option selected depends on the enterprise’s unique development plan and strategy. The ultimate goal is always to develop into a multi-channel and cross-link e-commerce solution.
HI-COM can provide you with lots of information and one-stop service for e-commerce platforms. Get in touch for further details as we’d love to hear from you.
Wanna learn more about chinese e-commerce?
Read HI-COM’s guide about the evolution of e-commerce in China in 2020.
HI-COM is a multilingual communication agency dedicated to providing China-specific social media communication and e-commerce marketing services to businesses around the world. Working with more than 100 brands, HI-COM is the go-to partner of companies that want to enter China market! Contact us for your free consultation today!