Produced by | Bullet Finance

Art Editor | Qianqian

Reviewed by | Songwen

In the fiercely competitive home textile sector, a Tmall brand store with a relatively limited SKU has achieved rare and stable profitability through consistent, high-quality supply.

One customer bought seven silk pillowcases at once, saying they needed them for two houses and decided to purchase everything in one go. Another customer bought a full set of bedding from the store before their daughter went abroad to study, even joking that they would buy again when the child got married. Relying on word-of-mouth, the store has accumulated a steady stream of repeat customers, much like a snowball rolling downhill.

"For durable goods like silk scarves and pillowcases, consumers don't replace them every month, so the store's reputation is crucial," said the person in charge of the brand store candidly. "Not only that, but on Tmall, users have clear purchasing intentions when they search for products, leading to higher conversion rates. Compared to impulse purchases on content platforms, return rates are lower, and net profit margins are more secure, especially evident during annual promotions like 618."

This model of achieving stable profitability with a repurchase frequency similar to that of a physical store is not uncommon on Tmall. In fact, as the primary platform for brand operations, Tmall has helped brands navigate industry cycles and achieve better operational efficiency during this year's 618 shopping festival, thanks to its stable profits and high repurchase rates.

1. Farewell to GMV Obsession: Profitability Becomes the New Focus of Operations

The aforementioned interviewee also noted a significant new trend within the industry this year: merchants are no longer blindly chasing superficial GMV but are instead focusing on operational efficiency and practical metrics like net profit margins and sustainable operations.

The reason merchants previously seemed to downplay profits was mainly due to their preference for "burning money to scale" amid market growth. However, with the exhaustion of traffic dividends and soaring customer acquisition costs, blindly investing in traffic would only sacrifice profits. Merchants have now begun to pursue stable profit margins unanimously.

A widely circulated "618 Promotion Expert Briefing" on the investment community platform Snowball also supports this view. According to the interviewees in the article, over 70% of their partner merchants have listed net profit margin as their top KPI for the year.

In contrast, another billion-dollar women's apparel seller told Bullet Finance that their company had already shifted most of its budget back to Tmall and other shelf-based e-commerce platforms for refined operations last year. The reason is simple: shelf-based e-commerce now offers higher effective profits.

Recently, Sun Huaiqing, Chairman of Marubi, stated in an interview with Shanghai Securities News that "all growth this year must be profit-driven. We will resolutely avoid any business or channel that operates at a loss, even if it brings scale expansion."

Sun Huaiqing made it clear that the company would "prioritize stable growth in profitable shelf-based e-commerce, scale back loss-making segments in content e-commerce, and continuously expand profitable segments."

In fact, the pressure of losses has long been suffocating merchants. Their emphasis on operational efficiency and shift toward shelf-based platforms began well before this year's 618 cycle. Public data shows that the number of new brands joining Tmall surged by 30% month-over-month from March to May this year alone.

From Canban's parent company launching the new brand "Zhongdian POINZ" to Balenciaga opening dual beauty stores, and Kodak collaborating with Pop Mart's IP Xiao Ye to launch trendy apparel, more and more e-commerce brands have started migrating to Tmall.

In this process, trendy toy giant Pop Mart responded even more directly, explicitly stating in its 2025 annual report that it has strengthened differentiated operations for Tmall customers.

Whether ordinary merchants or industry giants, profitability has become the primary metric for assessing business performance, and shelf-based e-commerce, represented by Tmall, is undeniably the main battleground.

2. Shelf-Based E-Commerce Takes Center Stage: A Straightforward Calculation

In the eyes of many merchants, Tmall's core position in the shelf-based e-commerce landscape is nearly irreplaceable, not only due to its strong brand recognition but also because it has cultivated one of the most stable and high-quality customer bases in China's e-commerce industry.

A brand executive told Bullet Finance, "For brands seeking long-term development, Tmall's core advantages lie in its predictability and operational depth. Moreover, Tmall boasts over 62 million highly affluent 88VIP members, whose average annual spending is nine times that of non-members. Over 70% of transactions for top brands during Tmall's Double 11 come from 88VIP members."

These remarks are highly representative, as "predictability" is one of Tmall's most attractive qualities for merchants.

According to Snowball's "618 Promotion Expert Briefing," among leading e-commerce platforms, Tmall's channel net profit margin generally ranges from 12% to 15%, ranking first in the industry. Notably, this figure already accounts for deductions in promotion fees, commissions, and return-related losses.

More importantly, the repurchase rate among 88VIP members hovers between 38% and 45%, even exceeding 50% for beauty and health products. For merchants increasingly seeking stable returns, this represents a significant operational advantage.

A daily necessities merchant also told Bullet Finance that for stores like theirs, which lack strong brand recognition but offer competitive products, repurchase rates are paramount, making Tmall their operational focus.

For example, in the sun protection clothing category, according to Jiuqian Zhongtai data, "in the second quarter of 2025, Douyin contributed approximately RMB 3.403 billion, accounting for 55.9% of quarterly sales, suitable for amplifying impulse purchases and interest in new products. By the first quarter of 2026, Tmall's share rebounded to 64.8%, indicating that mature-stage repurchases rely more on search, brand stores, reviews, and transaction reliability."

Besides repurchase rates, returns are another critical concern for merchants. Industry insiders revealed to Bullet Finance that high return rates often have a cascading impact, directly eroding profits, causing inventory turnover difficulties, exacerbating cash flow pressures, and negatively affecting store operational quality scores, trapping merchants in a downward spiral of losses.

In contrast, Tmall's exceptional performance in return rates has established a significant channel advantage.

Currently, Tmall and JD's search scenarios typically have return rates ranging from 12% to 22%, making them the best-performing platforms overall. The combination of "low returns" and "high repurchases" helps brands secure reasonable profits and achieve long-term operations.

While providing a high-quality consumer base, Tmall also focuses on its platform assessment mechanisms, guiding brands to "proactively eliminate inefficiencies" and return to profitability at the operational level.

For instance, during last year's 618 shopping festival, Tmall led the industry by adopting "GMV after refunds" as a core assessment metric. This not only demonstrated the platform's commitment to real transaction value but also guided merchants to shift their operational strategies, helping them safeguard profits and build more sustainable businesses.

Based on these advantages, Tmall is widely regarded by many merchants as the platform offering the best brand operational efficiency and merchant experience.

3. Not Just New Customers: Building Long-Term Brand Assets

As operational efficiency becomes a business priority, more merchants are considering where to focus their operations.

According to Yicai, Zhou Yan, founder of Opelai, stated at a forum in late 2025 that commission rates for beauty influencer livestreams have surged, rising from 40% in 2024 to 60% in 2025 within just one year.

This phenomenon of "commissions eating into profits" highlights a persistent issue: while some brands achieved rapid growth during the "traffic-buying era," their brand equity remains weak, leading to situations where "sales plummet without traffic investment."

Take the sleep brand "Zero Memory" as an example. After fully embracing livestream e-commerce traffic investment, the brand experienced short-term explosive growth. However, Yang Kang, the brand operator, discovered through practical experience that many users who saw the product in livestreams would actively search for the brand's Tmall flagship store's follower count, reviews, and sales volume, using a "cross-platform verification" process to assess the brand.

(Image / Zero Memory Tmall Flagship Store)

The Tmall platform can now drive conversions for other channels. Therefore, ahead of this year's 618 shopping festival, Yang Kang publicly declared, "We need to rebuild our Tmall presence."

In response, an interviewee told Bullet Finance, "The Tmall flagship store itself serves as a massive brand endorsement. Moreover, Tmall provides the most comprehensive operational tools and data support to help merchants reduce costs and increase efficiency. No other platform offers free access to such extensive operational data for analysis."

Another home furnishings merchant put it more bluntly: "On content platforms, traffic investment often attracts one-time visitors. On Tmall, we can be discovered by high-quality customers who genuinely like our products, transforming one-time transactions into long-term, repeat relationships. This is essentially a business built on familiar customers, so we always evaluate Tmall from a long-term perspective."

As e-commerce merchants increasingly value Tmall, leading brands are also demonstrating strong alignment, accelerating their strategic layout (layout) on the platform.

From Balenciaga opening dual beauty stores to classic imaging brand Kodak venturing into apparel through a crossover collaboration with Pop Mart, and JACK&JONES launching an outdoor flagship store, these frequent brand actions reflect their recognition of Tmall's irreplaceable role in building brand equity and accumulating long-term assets.

Ultimately, only leading shelf-based e-commerce platforms can solve the retention challenges of "being trusted" and "achieving high repurchase rates" for brands, further optimizing profit structures and comprehensively enhancing operational efficiency.

4. Conclusion

The essence of e-commerce competition always revolves around price, experience, and service.

Merchants increasing their investment in Tmall does not mean abandoning other models beyond shelf-based e-commerce. Instead, it reflects a realignment focused on long-term brand building: livestream e-commerce can efficiently acquire new customers, while shelf-based e-commerce evolves purchasing behavior into rational decisions, driving profit growth and long-term repurchases, forming a complementary dynamic.

In the long run, only by constructing an e-commerce ecosystem not driven by price wars can merchants reinvest resources into product development and service upgrades.

From this perspective, the return to profitability and increased investment in Tmall represent not just a unified choice by brands during 618 but the beginning of the e-commerce industry's return to long-termism.

*The featured image in the article is from Shetuwang, based on the VRF protocol.