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Setting up an e-commerce business

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Hong Kong has been known to be a dynamic hub for trade and tourism, due to its open-market policies and first-rate facilities and infrastructure. With direct market access to China, a low tax regime, and a business-friendly ecosystem, Hong Kong presents itself as an attractive proposition to many investors and companies who are interested in setting up new e-commerce businesses. 

If you are interested in setting up an e-commerce business in Hong Kong, first learning all you can about the processes involved will help you to successfully market, distribute and sell your products. This guide to e-commerce will provide you with all the information you need to know about e-commerce businesses in  Hong Kong, the step-by-step guide to setting up, their benefits, and the role of logistics in e-commerce start-ups.

Cross-border e-commerce in Hong Kong

According to Statista, Hong Kong’s e-commerce market is growing, with its revenue expected to reach US$25.5 billion in 2022. A significant part of the revenue is generated by cross-border business from Europe, United States and countries in Asia, such as Japan and Singapore. Based on the same statistics, user reach is expected to hit 76.7% in 2022 and reach 83.8% by 2025. E-commerce was instrumental in saving businesses during the COVID-19 pandemic when consumers had to turn their attention to online shopping in the wake of lockdowns and social distancing restrictions. Based on the aforementioned statistics, there was a sharp increase in revenues generated by e-commerce businesses in 2020 as compared to the year before.

As per the statistics, it is clear that having an e-commerce business in Hong Kong is lucrative, as it presents a wealth of opportunities for businesses to generate more revenue. With regards to the products that are trending online and which ones hold potential for import and export, fashion and furniture top the list, yielding the highest revenues. According to World’s Top Exports, Hong Kong’s most valuable export products in 2021 include electrical machinery, computers, precious metals, gems, and medical apparatus.

Benefits of setting up an e-commerce business in Hong Kong

There are several benefits of setting up an e-commerce business in Hong Kong, some of which are listed below:

  • Hong Kong’s economy is growing steadily because of the government’s economic policies, transparent legal laws, open market, and intellectual property rights protection laws. All these elements create a conducive environment for business owners to start their operations.

  • Hong Kong’s openness encourages business owners to push the envelope when deciding on product lines, branding, and marketing strategies. Whether your e-commerce business offers information technology, fashion and beauty, healthcare, hardware, or home decor products, you have the opportunity to grow your business in such a dynamic environment.

  • Being situated in the centre of Asia, Hong Kong’s geographical location also presents many opportunities due to its direct access to different trade markets. It also is in close proximity to Mainland China, enabling businesses to more easily organise the sourcing of raw materials and the manufacturing of products here.

  • Hong Kong is also a well-connected hub. Hong Kong International Airport (HKIA) is connected to over 220 destinations making it Asia’s leading logistics hub and distribution centre.   

  • Hong Kong also offers efficient customs, with around-the-clock clearance and a simplified process.

  • Hong Kong is a free port and does not impose any tariffs. It also enjoys Free Trade Agreements (FTAs) with various other countries, through which businesses can enjoy preferential tax rates.

  • The government also offers special incentives to investors (foreign and local) through loans, market funds, and other initiatives such as the Support and Consultation Centre for SMEs (SUCCESS) and Trade and Industry Department Funding schemes. 

These benefits are valid reasons why businesses should start their operations in Hong Kong, contributing to its economy, and generating revenues for themselves. Since this is the age of digitisation, it goes without saying that setting up an e-commerce business is crucial for any organisation, be it from scratch or as part of business expansion.

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Step-by-step guide to starting an e-commerce business

When setting up an e-commerce business, it is essential that one meticulously follows through the main steps involving legal registration, creating an online presence, raising brand awareness, processing orders and successfully delivering them. The following will help you understand what is required to start a business, such as an e-commerce platform here in Hong Kong.

  1. The first step is registering a new company in Hong Kong and getting it incorporated at the Inland Revenue Department. 
  2. You will also have to apply for certain licencses and permits to commence operation. 
  3. You are required to know the tax laws, labour legislations, and other obligations.
  4. Once your company has been registered, you may then start to create an e-commerce store for your brand. You can create a customised website for your brand or choose an e-commerce store platform such as Shopify or WooCommerce so your target customers can place their orders online.
  5. Conduct market research to determine your target audiences. With interviews, surveys, and field studies, you can ascertain their needs, wants and preferences. Through this, you can also find out which channels are best to reach them.
  6. Generate brand awareness by running Facebook and Instagram ads, engaging in content marketing efforts and influencer marketing strategies. Ensure also that your website is SEO-optimised, by investing in strategies such as keeping page loading speeds to a minimum and regularly creating new content. 
  7. Determine also the e-commerce model to adopt. This then determines how you will manage inventory and how you will source for products. For example, wholesaling and warehousing requires that you invest in warehouse space, while dropshipping means products are sent straight from manufacturers to consumers and you would have to manage and facilitate orders.
  8. Partner with a reliable logistics company that can deliver orders to your customers quickly and efficiently.

For more in-depth information, download our step-by-step guide on how to set up an ecommerce business.

The role of logistics in e-commerce

One of the most important aspects of an e-commerce business is the role of logistics, as it can help make or break a brand. Even if you provide the highest quality products to the customers, if they are unable to receive them fast and in good condition, they will not be content with your service and will not hesitate to switch to a competing brand. 

A reliable logistics carrier can help boost customer satisfaction by offering fast and secure delivery. When customers receive their orders on time and in perfect condition, it helps build trust in the brand. This will help increase customer satisfaction and create loyal customers. 

DHL Express can offer you fast delivery, help you navigate customs issues and provide customer support in this regard. We will be able to simplify the shipping process and help you with your e-commerce business in Hong Kong. Open a business account today with us and discover our range of services and shipping solutions today.