At Tmall’s TopTalk conference, which concluded on March 26, the platform said it would deepen and broaden its merchant support plan for the year. That includes continued support for stronger brands and higher-quality products, larger subsidies, broader user reach, and better service for China’s more quality-conscious consumers.
At the same conference in 2025, Tmall elevated support for higher-quality brands into a platform-level strategy. It said resources would not be distributed evenly. Instead, it would direct them toward merchants with stronger originality and creativity, backed by business incentives, new product launch support, and user growth programs.
A year later, Tmall is presenting its first scorecard. According to the platform, the number of brands on Tmall with annual gross merchandise value (GMV) above RMB 100 million (USD 14.5 million) rose 15% year-on-year. More than 13,000 brands reached eight-figure RMB annual sales, while annual GMV posted double-digit growth.
By Tmall’s account, those figures suggest that brands on the platform have been able to maintain stable operations while preserving room for growth and profitability.
In 2026, Tmall said it wants to build on that shift, with a sharper focus on increasing merchant earnings.
Putting stronger brands at the center
With China’s online shopping population nearing one billion, scale is no longer the main constraint in e-commerce. Profitability is.
According to a January media report cited by 36Kr, based on surveys of more than 1,000 e-commerce merchants, 30.1% of merchants were operating at a net loss, while more than 30% reported profit margins of just 0–5%.
What is driving that pressure? Some 78% of merchants cited high traffic acquisition costs, while 60.2% pointed to low-price competition from peers.
During the years of channel-led growth, many newer consumer brands relied heavily on subsidies and paid traffic rather than product differentiation. The model proved expensive to sustain. The same survey found that, last year, among mid-tier merchants with annual sales of RMB 10–100 million (USD 1.4–14.5 million), 48.7% spent 20–100% of revenue on paid traffic acquisition.
That is why business consultant Liu Run argued that “every brand built on paid traffic will eventually be destroyed by paid traffic,” speaking with 36Kr.
Liu’s prescription is to build a real brand company, step by step. In a WeChat post, Babycare vice president Paul wrote that the industry’s logic is changing, with consumers increasingly shifting their trust from categories to brands.
That was also the starting point for Tmall’s strategy a year ago.
In February 2025, Tmall began pilot programs in beauty, apparel, and sports and outdoor, testing incentives for quality brands. The early version of the strategy shifted support away from traffic coupons and toward direct cash incentives.
Throughout 2025, Tmall expanded the program and increased its frequency to once a quarter.
In 2026, the central goal became driving transactions and materially raising merchant earnings. To do that, Tmall increased supplemental spending for merchants. The mechanism works this way: when a merchant’s advertising shows strong conversion, the platform also subsidizes product coupons, lifting transactions without cutting into brand profit.
When incentives are designed to protect margins, brands have a better chance of avoiding the squeeze created by competition over traffic and price. That gives them more room to preserve capital for innovation and experimentation.
In 2025, Tmall said it launched more than 16 million new products positioned as quality offerings. Its “Super Launch” program generated RMB 120 billion (USD 17.3 billion) in GMV for the year, up 20% year-on-year.
This year, Tmall said it plans to add RMB 60 billion (USD 8.7 billion) in dedicated traffic to support new key product launches. It also said those resources would tilt toward platform-exclusive versions, technology products, and other launches with higher innovation content. At the same time, the platform will provide 30 days of traffic support during the initial sales period for all quality new products.
One recurring challenge for brand launches is the shortening life cycle of products. Tmall argues that more continuous operations can help extend that cycle.
Liu Jianxin, a representative from home appliance brand Dreame, said traffic tends to spike during a new product’s debut period, giving the brand a large pool of users who add the item to their carts or favorites. During the later sales period, Tmall’s mechanisms let the brand reach those undecided shoppers again and continue converting them.
That model is better suited to brands trying to build for the long term. Last year, tech creator Mediastorm joined Tmall as a brand. Its founder said turning a creator identity into a brand starts with trust, then products. Tmall’s strengths in search-driven shopping, membership systems, and fulfillment stability matched those needs.
Quality products for high-spending users
Tmall’s case for supporting steady brand operations rests in part on its user base. Even as China’s e-commerce sector has shifted, that remains one of the platform’s core advantages.
A common business rule, the Pareto principle, holds that 20% of customers account for 80% of profits. For Tmall, that core 20%, according to the platform, largely comes from its nearly 60 million 88VIP members. Tmall said these members spend 11 times as much annually as non-members on the platform and account for more than half of the business generated by leading brands.
According to Tmall, the 88VIP membership base began growing at a double-digit quarterly pace in the second half of 2023. That momentum has now lasted for ten straight quarters, with membership roughly doubling from 30 million to nearly 60 million.
That growth coincides with heavier investment in member benefits. This year, Tmall said it will provide RMB 100 billion in coupons to 88VIP members, more than in previous years. The move points to a strategy more focused on mature, high-spending consumers than on distributing traffic evenly across the broader user base.
Tmall is also opening its marketing programs, including brand-run private purchase campaigns, tentpole campaigns, and cross-brand collaborations, to brands seeking the attention of 88VIP members. Over the past year, Tmall said the number of brands working with 88VIP rose 51%, while the number of products increased 42%. Products with member benefits received twice as much exposure as before.
Accordingly, more efficient matching between stronger merchants, better products, and consumers with higher purchasing power should generate better returns for brands.
Tmall is also trying to improve that matching through algorithm changes. By extending the memory cycle of its recommendation systems, the platform said it can look beyond users’ immediate searches and clicks and better track longer-term interests and life-stage changes, allowing more precise recommendations. By Tmall’s account, that has improved its ability to connect higher-value users with higher-quality goods.
AI and merchant efficiency
Artificial intelligence is another part of this upgrade. Tmall said its goal is to improve the operating efficiency of different types of merchants as much as possible.
Large brands with stronger operating capabilities tend to need more specialized AI tools that can execute tasks for central teams. During last year’s Singles’ Day, for example, Tmall said AI-generated red packets lifted conversion rates by 81% from the previous period. This year, the platform said it is adding RMB 10 billion (USD 1.4 billion) in investment to continue distributing store-level “red packets.”
Its AI-driven customer service product, Dianxiaomi, has also reached meaningful scale. Tmall said it has handled 300 million user interactions cumulatively.
Smaller businesses with weaker operating capabilities may have even more to gain from platform-level AI. One upcoming upgrade is the rollout, by the end of March, of OpenClaw-style agent features in the merchant backend and dashboard, designed to support the full operating chain around the clock.
These moves extend Taobao and Tmall’s longer-term AI push. Before last year’s Singles’ Day, the platform had already rolled out a series of AI tools for operations, marketing, and customer service. Tmall said the real-time operating strategies generated by its campaign assistant reduced merchants’ workloads by an average of 30%, while Quanzhantui and related platforms helped improve conversion.
Taken together, those tools point to higher productivity on the supply side. In practical terms, that could mean lower operating costs and more room for margin expansion.
As AI tools become more widely available, the business factors AI cannot fully replace, including brand visibility, innovation capability, and the ability to attract and retain core consumers, are likely to become even more important.
Liu Bo, president of Tmall, said the platform’s biggest priority is ensuring merchant efficiency and improving operating output around goals shared with brands. “Over the past year, the brands that worked more closely with Tmall achieved greater growth. In the new year, we will further strengthen these capabilities and invest more comprehensively.”
KrASIA features translated and adapted content that was originally published by 36Kr. This article was written by Chen Xi for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.92 = USD 1 based on estimates as of March 30, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.