Smartphones and other devices, in conjunction with the internet, have given birth to a new way of doing your shopping, eCommerce and it offers numerous advantages of traditional ways of shopping so it is no surprise that it is surging in popularity. Here we take a look at the eCommerce sector in Hong Kong, and why the territory is a good place to do business.
The rise of e-commerce in Hong Kong
Shopping on eCommerce stores is becoming the norm in many parts of the world and Hong Kong is doing great as well. It is not seen as one of the major markets in Asia, according tho the recent forecast provided by Statista.
- Approximately 90% of consumers in Honk Kong have gone online to purchase at least one product in the last 3 months.
- The eCommerce penetration rate in the territory was 74.4% in 2017, a figure that is set to rise to 7% by 2023.
- Revenue in the eCommerce sector in Hong Kong in 2019 is expected to amount to US$4,742m, with an expected growth of 1% annually.
- By the 2023, eCommerce revenue in the territory is expected to reach US$6,471m.
An eCommerce store located in Hong Kong is not limited to doing business in the territory only and it is excellently poised location wise to do business in mainland China and further afield. In Mainland China, eCommerce revenue is expected to be over US$1,935 trillion, representing an increase of 27.3% over 2018.
This will mean that by the end of 2019, China will represent almost 56% of the entire global eCommerce market and Hong Kong is the perfect entry point if you want to take advantages of the Chinese market, due to its liberal economy, friendly-business environment and unique culture, in between the Chinese and the Western heritage.
The forecast growth figures are obviously going to be very enticing, but this is not the only reason to open an eCommerce business in Hong Kong. These include, but are not limited to:
- Business culture: It was until relatively recently that Hong Kong was a British territory. As such, you can expect to find a business culture that is a blend of Western and Asian practices. This makes it easier for westerners to settle in and do business there.
- Taxation: High taxes can really throttle the development of fledgling businesses. In Hong Kong, however, corporate tax is only 8.25% on profitsup to HK$2 million. This increases to a very reasonable 16.5% after the first HK$2 million.
- Ease of doing business: According to WorldBank.org, Hong Kong ranks 3rd on the planet in terms of the best places to do business.
- Infrastructure:Hong Kong is a highly developed territory with a world-class infrastructure. With a modern transport infrastructure and excellent communication infrastructure, the territory is a great place to live and work.
- Technology:Hong Kong is a modern city with access to the latest technology; something that will be vital to any eCommerce business.
Opening a Store
It is quite clear that Hong Kong is a great place to do business but another essential component is the online store itself and the good news is that having your very own eCommerce store is now easier than it ever has been before thanks to e-shop builders like Shopify that help brands to have their own platforms without having much technical skills.
First of all, you will need to have an eCommerce store constructed and here, you have two main options:
- Hire a Coder: This is the more expensive option, but it does offer some benefits such as having full control over the design of your site.
- DIY: It is no longer necessary to be a coder to build your own eCommerce store. Sites like Shopify make it easy for anybody who is reasonably computer literate to build a store of their own. They come with templates to make designing a site easier, along with a host of features to help make the business successful.
Then, you need to have products to sell and there are different options, based on your budget:
- Own Products. If you make products of your own, an eCommerce store is a great way to market and sell them.
- Wholesale: Purchase products in bulk and you will likely get to take advantage of bulk discounts. You will need a place to store the products and there is no guarantee that you can sell the goods.
- Dropshipping: It allows individual orders to be made from the manufacturer as purchases are made, and orders are sent directly to the customer. You won’t get bulk discounts but you do limit risk, and processing orders becomes far easier.
- SEO: It’s very effective method of getting your store noticed. It takes time, however, and you may find yourself trying to compete with established big names.
- Paid ads: Paid ads are affordable and effective. They can get instant results, and they help put you on a level footing with the big names.
- Social Media: Hong Kong has around 5.8 million active social media users. This represents vast marketing potential. Use it to get your store noticed, and to communicate with customers.
- Influencers: If you are able to contact an influencer that will endorse your products/services then a surge of orders may be coming your way.
- Content Marketing: An effective content marketing campaign will help get your business noticed by a wide audience, while subtly letting them know you have something they need/want.
- Promotions: People love getting something for free. Referral programs will also be effective in generating revenue and attracting loyal customers.
Hong Kong has a fine reputation internationally as a place to do business, and for some very good reasons. Hong Kong and the region overall also has a great deal of growth potential in the eCommerce sector, making it a wise business decision to get involved.