Horsten International: Opening a Belgian F&B Store on Tmall Global

case-study| 16 January 2024

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Horsten International is a consulting company from Belgium, established in 1996, helping European companies with their China projects in various industries.

MyChinaWeb is a spinoff of Horsten International, set up in 2016, helping B2C brands and B2B companies to increase their online visibility in China through social media and e-commerce solutions. Apart from being a consultant, Horsten has been engaged in its own trading and investment projects. The Tmall Global shop is an example of this work.

Background of the project

Due to a lack of knowledge about doing business in China, the complexity of the Chinese market, its business culture and language, in combination with the distance between Europe and China, EU SMEs often sign away all control over their brands the moment they set foot in China. Although they are very strictly controlling their branding and operations in other foreign markets, for some reason Western companies’ decision makers quite often blindly trust their Chinese distributor and lay their entire brand equity in China in the distributor’s hands.

If the relationship with their distributor turns sour, which unfortunately often occurs, the EU brand owner meets great difficulty to switch to a new party. Since intangible assets like trademarks, social media accounts and online stores were registered on their Chinese distributor’s business license, EU SMEs have to start from scratch to build up their China business. Sometimes, they just give up.

Moreover, business in China can quickly become opaque, with a vastly different market from anything SMEs know in Europe. Sometimes, radio silence from the distributor follows the purchase one or a couple of containers of goods. When this occurs, brands do not know what happened to the products they sold and why there were no follow-up orders. EU SMEs lack much-needed information about their target audience and how their products were perceived by customers.

The Belgian Tmall Global store

This is where the idea for the Belgian Tmall Global shop came from in 2019. It provides a soft-landing method to safely enter the Chinese market for Belgian food and beverage brands. It also guides them on their next steps and helps them to maintain control over intangible assets. We selected Cross-Border E-Commerce for the Belgian Tmall Global store. This allows international brands to sell their products their in original packaging directly to the Chinese consumer at reduced tax rates. 

Key priorities for the project were and still are transparency and control. We wanted transparency about numbers and marketing actions, and control over brand building, positioning and pricing. The chosen product category was F&B (food and beverages), one of the largest market segments on Tmall Global. This is also because Belgium has a long and proud tradition of chocolates, beers, waffles and other F&B products, which can be sold at a premium price via Cross Border E-Commerce.

Moreover, in 2019, Alibaba’s business developers in Europe announced the launch of country flagship stores. Such stores were to be different from the usual speciality or flagship stores, as they would be multi-brand stores with products coming from a single country. It was said that such stores would be able to enjoy tailored support to get sales going. In order to be an official country flagship store, shops would need to have the official endorsement of a certain country’s government to sell local goods on Tmall Global. 

Horsten was keen on being the first and only to manage the official Belgian F&B flagship store on the platform. After securing an official endorsement letter from the Belgian ambassador in China in June 2020, we could start the preparations for the opening of the Belgian F&B Tmall Global shop.

As a business model, a shared profit & loss model was chosen, under which all revenue and costs are shared with the partner-brands. We saw this as the only way to get the essential commitment from SMEs and gain sufficient insights into the Chinese consumers’ preferences. Our conviction is that SMEs who consider China as just another country to sell their products, without giving sufficient attention to the market, will fail. Only an intensive involvement leads to know the market and customers, allowing the SME to take appropriate actions and investments.

The shop finally went live with four Belgian food and beverage brands in January 2021. The brands were selected based on different parameters: 

  • The anticipated fitness of the products to the Chinese market, including the packaging, pricing, etc.
  • The perceived demand in China (based on a preliminary market scan).
  • The strength of the story behind the products, the brand or the company, considering the fact that authenticity and quality are key concerns of the CBEC target audience. Belgian tradition and family-owned are interesting features in this respect.
  • The commitment from the top management to the project and the fast-decision process by the partner-brand.

Expectations vs reality

We hired a TP (Tmall Partner) to take care of the day-to-day operations. The Horsten team in Belgium and in China could thus focus on the bigger picture and attract new partner-brands. Every week, the TP sends us reports about the latest sales numbers, marketing expenses and various KPIs related to e-commerce. Also, monthly marketing investment plans are prepared by the TP and discussed with Horsten and the partner-brands. This helps us to define the expected spending on marketing tools on the Tmall platform, such as Direct Train, Super Recommendation, and other cost-per-click (CPC), cost-per-mille (CPM) and cost-per-sale (CPS) marketing tools.

Examples of CPC, CPM and CPS marketing on Taobao and Tmall Global

Additionally, information about orders that have been settled via the Alipay platform is shared with the Horsten financial department. However, these settlements do not show details of the products and the prices used for individual products. Nor was it possible to match the data with what was received from the TP. Furthermore, the invoices received from Alimama (Alibaba’s online marketing platform) and Cainiao were non-descriptive. It was impossible to find out what the costs involved were exactly, which brands were involved, and how to match the costs with the TP’s reports. After asking the TP’s key account manager various questions which could help with reporting to the partner-brands and with managing the accounting, it quickly became clear that the TP had no idea how to interpret these numbers.

Along the way it was found that the TP, who receives a fixed monthly fee and a commission on the revenue, mainly focuses on those brands and products that perform well in the shop. These bestselling brands soon consumed the majority of the marketing investments, leaving other brands behind. Considering the multi-brand approach of the Belgian Tmall Global shop and the shared profit model with the partner-brands, from the beginning the TP was pushed to give focus to all brands sold in the shop.

Screenshots of a KOL livestream during the 618 (18 June) promotional sales

As the months progressed, sales were significantly increasing, but so were the respective costs. At a certain point it became apparent that, as livestreaming took up the lion’s share of the marketing budget, the more revenue was generated, the more the costs increased. These livestreams also attracted a large audience and the offered discounts were very steep, but very little was shared by the TP about what the KOLs said about the products and what the market feedback was exactly. Obviously, this is not only crucial to better understand the customer’s expectations. It also allows the brands to target marketing campaigns more efficiently, leading to higher conversion rates.

Finally, there was also the issue of being an official country flagship store. After months of radio-silence from Alibaba, it turned out that the concept of ‘country stores’ was not pursued anymore. As a result, the Belgian F&B store is a ‘speciality store’, which is one grade below a ‘flagship store’. Flagship stores are able to attract much more traffic pushed by the platform’s algorithm and they can use an additional, more effective, marketing tool. None of this was communicated beforehand.

Increased involvement

After a couple of months, it was clear that simply lying back and enjoying the ride while the TP manages day-to-day operations was not an option. To get a hold of the situation, starting from mid-2021, Horsten got more involved in the project and two new colleagues were hired, one in Belgium and one in China. This increased involvement helped to understand that the data reported by the TP was often incorrect, that big discounts were given while paying high costs per order, and that the marketing and branding were not always in line with the partner-brands’ requirements.

By involving full-time employees on the project, Horsten managed to get a better understanding of both the quantitative and the qualitative side of managing a Tmall Global shop. By constantly verifying information and pestering the TP with detailed questions about the operational side, more detailed insights could be obtained into the costs involved. 

With regards to marketing, a close eye is to be kept on the story that is told online. This is done by self-managing the official accounts on WeChat, Weibo and RED, of which the content is often used by the TP as a basis for qualitative marketing on Alibaba. Moreover, small-scale marketing campaigns are initiated to gain followers and to boost certain partners’ brand awareness in China.

A difficult second year

New problems occurred after the data analysis, operations and price systems were finally optimised at the beginning of 2022. Due to pandemic restrictions in China, the Chinese New Year holiday and major delays along the route, one container took almost 4 months to arrive in China from Europe. Starting from March 2022 an unprecedented wave of COVID-19 infections caused many of the target areas to lock down, leading to the interruption of last-mile deliveries. This surge of infections was followed by a heat wave in the summer of 2022. Since the cold-chain logistics were not yet optimised, this continued to put pressure on revenues.

From Horsten’s point of view, despite the major challenges the shop faced in the first two years of operation, it was decided to continue the project in 2023. Obviously, attention is to be given to continuous optimisations in all aspects of the project, including product extensions and new brand introduction. Additionally, flagship stores on domestic e-commerce platforms are planned to be opened for the best-performing brands, as well as cooperation with Chinese distributors to sell the products in supermarkets and other traditional sales channels in China. In any case, knowledge about how to manage a Tmall Global shop is particularly valuable to help other EU SMEs who wish to enter the Chinese market


These are some of the most important lessons for European SMEs looking to open a shop on Tmall Global.

Beware of over-reliability: Brands cannot be successful or even profitable in China by relying on CBEC alone. Instead, CBEC should be seen as a first entry point into the Chinese market. See it as a real-life market research. It should lead to the development of conventional e-commerce and offline sales once your product has sparked interest. Business professionals may believe it is expensive research, as CBEC requires the payment of deposits, movement of stock and hiring. However, consider the costs associated with regularly visiting trade fairs and potential distributors, none of which immediately leads to direct sales.

Trust but verify. It is often said that in business, having a relationship based on trust with your Chinese partners is key. While this may be true, it does not hurt to verify the information coming from partners. Being well informed allows you to keep control over your business and to steer your partners in the desired direction.

No such thing as a free lunch. Often presented as a cheaper market entry method in China, CBEC still requires brands to make investments they may not have anticipated. Do not underestimate the workload associated with Tmall Global. Brands should also be aware that when they first set foot in China, their marketing efforts on traditional Western social media mean almost nothing to the Chinese consumer. If you are not yet present on Chinese social media channels such as WeChat, Weibo or RED, you will need a big initial investment to educate the market about your products.

Commitment. In any case, a long-term commitment is essential. Quick wins don’t exist in China, it takes at least two years to become profitable. Only those with a strong belief in the Chinese market and in e-commerce can succeed.

A screenshot of the Lemaitre product page on Tmall

More China e-commerce insights

Read our 2023 report on Cross-Border E-Commerce, with an English translation of the CBEC Positive List, for practical advice and an overview of regulations.

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