Toys 'R' Us pilots e-commerce play on Tmall in time for Children's Day in China

Through the Tmall store, customers who may not have access to the 30 stores in 18 cities that Toys 'R' Us operates in China will be able to shop online, enjoying the same prices.

E-commerce platform operators Fireswirl Asia and Beijing Xingchang Xinda Technology will service the toy retailer's branded online store on Tmall, or Tian Mao in Chinese. The opening of the Tmall store will be promoted with subway advertising as well as events at shopping malls.

Pieter Schats, managing director of Toys 'R' Us Greater China and Southeast Asia, told Campaign Asia-Pacific that the bricks-and-mortar retailer is moving to a bricks-and-clicks strategy.

"The China market is pretty new for us, but clearly its growth potential significantly outstrips other parts of Asia," Schats said, referring to the 'one child, six parents' phenomenon in China—an effect of the country's single-child policy that see two parents and two pairs of grandparents caring for (some would say "spoiling") one child. "So we're putting a lot of emphasis on a dual strategy of building stores and building an online presence."

Toy 'R' Us has been organising its physical stores in key geographical clusters in primarily tier-1 and tier-2 cities. It is opening another location in Chengdu this June. "Gaps in other cities will hopefully be filled by e-commerce, as logistics and distribution are our biggest challenges in China," Schats said.

These challenges can be tackled by the biggest and most obvious choice of an e-commerce platform, and that is Tmall. "It's a relatively quick way to bring e-commerce to market," Schats said. "In fact, we got it up and running in a very short span of time—three and a half months."

Children's Day was a major incentive. Argha Sen, regional marketing director at Toys 'R' Us Asia, explained, "The buying of gifts for Children' Day takes place in the two preceding weeks, so the grand opening of our Tmall store means at the convenient click of a button we are able to cover the whole of China," he said.

Toys 'R' Us is also looking to set up its own website for the China market, which will have more "bells and whistles" than its Tmall store due to limitations on how a merchant can present its brand, Schats added. "The offline retail experience of Toys 'R' Us, encapsulated by the breadth of our product range, can be felt as soon as you walk into a store, as our toys are not displayed behind glass doors but taken out of their boxes," Sen said. "This is designed to appeal to children."

Schats said the key marketing message of "having a time for learning, a time for play, a time for social engagement with friends, and having toys for each of those occasions" is harder to get across online.

To mitigate this, Toys 'R' Us is taking the route of video marketing. "Our toy vendors like Hasbro, Mattel, Lego, Disney produce fantastic content," Sen said. "We are the curators of that content on our official Youtube HK channel that had tremendous success in making the toys come alive. So we are exporting this concept to China's online video platforms."

Direct marketing is another prong in its marketing mix. When asked about social-media strategy, Sen pointed out that "the jury is still out" regarding its relationship to e-commerce.

"The link to sales is not conclusively proven, so before we even talk about social media, we want to capitalise on our Star Card database, through which we can communicate to 800,000 captive members in a targeted fashion because we already know about their demographics and contact details," he said.

The toy retailer does have a social media presence though, with its weibo microblog pages on Tencent and Sina used to reach out to a wider audience in Chinese cities it does not yet have a physical presence.