Hong Kong - the ideal place for Vietnamese to create an e-commerce business

Updated time: 07 May, 2021, 15:05 (UTC+08:00)

As the world’s freest economy, Hong Kong is the number one choice for setting up an e-commerce company. This market has fast developing speed, solid technology infrastructure and a growing demand, very ideal for Vietnamese people to break through and establish a business in e-commerce.

Online shopping at home in Hong Kong

Hong Kong, opportunities for creating an e-commerce company

With nearly 5 million people shopping online daily, Hong Kong’s e-commerce market expects the penetration rate to be 72.6% in 2022 and the market value to reach $11.3 billion by 2025. Inpidual consumers account for 60 % of the total e-commerce sales. These numbers alone show a lucrative market full of opportunities for an e-commerce company to thrive.

In Hong Kong, around 61% of e-commerce sales are conducted via first party’s website or mobile application and 22% are conducted through third-party’s. The most popular e-commerce marketplaces here are WeChat, Taobao, Amazon, JD, Alibaba and eBay. With a compound annual growth rate of 32%, digital wallets are expected to surpass all other payment methods this year. The market leading digital wallets are PayPal and AliPay.

Foreign companies can utilize well known big brands and their developed online system to quickly create an e-commerce company in Hong Kong.

Top three trend in Hong Kong’s e-commerce market

The top criteria for choosing a shop are value for money, ease of shopping experience and product quality. Customers who have positive online shopping experiences are more likely to return and shop again.

The Hong Kong government does not currently have any specific regulations targeting online sales, leaving businesses free to innovate. Hong Kong has a territorial system of taxation with low rates leading to several sellers and e-commerce companies choosing Hong Kong to start businesses. Tax rate on foreign-sourced income (profits derived from outside Hong Kong territory) is 0% and corporate tax rate is only at 16.5%

Technology and infrastructure encouraging e-commerce.

According to a 2019 government survey, more than 2 million households in Hong Kong were connected to the internet and close to 6 million people had smartphones. Approximately 74% of online sales are on desktops while the rest are on smartphones or tablets (16% and 6% respectively). Younger people are the most active online but it is the working age group that has the strongest buying power. To seize this portion of the market, companies need to focus on the younger population and optimize their service for mobile and tablet.

Smartphone is very common in younger population of Hong Kong

Hong Kong’s infrastructure is already well-established to meet the rising demand for e-commerce.As the previous post has analyzed, Hong Kong has the best policies and very developed ports, ranking among the top of the World Bank’s global ranking of logistics capabilities and quality. Because this is a duty-free port and has enormous amounts of traffic to countries throughout Asia, many clients use Hong Kong as a warehouse and distribution center for their Asian customers. This leads to shorter delivery time, providing a strong competitive advantage.

From Hong Kong to the entire world

Doing cross-border e-commerce with mainland China accounted for 37% while US and Japan took the following positions at 21% and 16% respectively according to Statista. Hong Kong shoppers are also buying mainly from China, Singapore and Japan. Setting up an e-commerce company in Hong Kong offers many opportunities to grow internationally. In the e-commerce market, electronics & media, accounting for US$ 1.07 billion market share, took the leading position. This is followed by fashion with US$ 990.5 million in sales. These are also among leading products that Viet Nam is producing and exporting.

One IBC^® Hong Kong office has partnered up with many multinational banks to help clients open merchant bank accounts with high security and establish an e-commerce payment system. This helps simplify financial management and allow customers to pay in any currency with different methods. One IBC^® also provides accounting and auditing services to help reduce clients’ burden when doing financial reports and office services to help reduce cost in one of the most expensive real estate markets in the world. In addition,as the previous post has explained, One IBC^® also supports clients with IPs and trademarks.