Hong Kong plans e-commerce shopping festival to help city’s brands get leg up in mainland China market, commerce minister says
Chief Executive John Lee Ka-chiu mentioned in his policy address last year that Hong Kong Shopping Festivals would be organised to promote awareness of the city’s brands and tap into the nationwide domestic consumer market.
Last week, Financial Secretary Paul Chan Mo-po also proposed in his budget blueprint to inject HK$500 million (US$63.9 million) extra into the Dedicated Fund on Branding, Upgrading and Domestic Sales to help small and medium-sized enterprises bolster their competitiveness and tap into mainland as well as overseas markets.
Authorities earlier launched “e-commerce Easy” under the fund to allow enterprises to make use of HK$1 million for the implementation of e-commerce projects within the cumulative funding ceiling of HK$7 million.
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Yau said a lot of issues still needed to be addressed after the first meeting of an interdepartmental task force in January, particularly on ways to sell Hong Kong products in the mainland and subsequently overseas markets.
“It entails a wide range of considerations, such as determining the appropriate platforms, achieving prominent visibility, addressing tax-related issues, resolving logistics challenges and managing warehousing concerns,” he said.
“It is not an easy task as the e-commerce platforms in mainland China are already well-established. We need to figure out how to achieve a high level of service and satisfaction”.
Stanley Lee Kei-chuen, president of E-Commerce Association of Hong Kong, said it was increasing difficulty for local brands to enter mainland China’s platforms due to the growing presence of international brands.
“Mainland consumers have a lot of choices when it comes to online shopping. Products made in Hong Kong need to be very appealing to them, otherwise they can’t drive [purchasing] desire,” Lee said, adding that some Hong Kong jewellery brands were relatively successful due to their distinctiveness.
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He also said that many Hong Kong small and medium-sized enterprises are cautious of the high cost of acquiring traffic on mainland e-commerce platforms as they were competing with an overwhelming amount of competitors selling similar products.
“Hong Kong businesses face the challenge of increasing traffic to their products to gain visibility. They might invest in promotional campaigns through social platforms such as Douyin live streaming and Xiaohongshu, but there is a risk that sales revenue may not cover the costs to get higher traffic,” Lee said.
He said if the government could collaborate with mainland platforms to create a “green channel” for Hong Kong businesses to have their products prominently featured, it would be a great help for local brands.
China’s online retail transactions in 2020 surpassed 710 million digital buyers, amounting to US$2.29 trillion in 2020, according to global research company eMarketer.
The firm projects that these transactions would reach US$3.56 trillion by 2024.
China was the largest market for e-commerce with a revenue of US$1.5 trillion in 2021, placing it ahead of the United States, eMarketer added.