Hong Kong’s e-commerce business has evolved rapidly in recent years, and a variety of platforms are available to local and international retailers. What distinguishes Hong Kong is the presence of both mainland Chinese e-commerce platforms and international companies. With so many possibilities, it’s not always clear which marketplace to choose.
E-commerce sales in Hong Kong are expected to expand at an 11.1 percent annual rate in 2021, as customers increasingly make purchases online, according to GlobalData, a prominent data and analytics business.
E-commerce sales in Hong Kong are predicted to expand at an 8.3 percent compound annual growth rate (CAGR) from US$22.9 billion in 2021 to US$29.0 billion in 2024, according to GlobalData’s E-Commerce Analytics.
Things have changed in the dynamic world of B2B commerce. Frost & Sullivan predicts that global B2B e-commerce sales are expected to reach over $6.6 trillion by 2020, overtaking business-to-consumer (B2C) valued at $3.2 trillion by 2020. In Asia , Forrester predicted 12.1% growth per year in B2B E-commerce with the B2B market being the most prevalent mode of business and the adoption of the B2B market is booming, especially in Southeast Asia. East, China and India.
Here are 10 successful B2B e-commerce businesses and why we believe they are their main underlying success factors.
Table of Contents
1. eWorldTrade
eWorldTrade has exemplified surreal market growth in the last decade, having been introduced as a new market player to one of the major ones today. Currently, eWorldTrade enjoys a complete roster of active customers who benefit from the wide variety of product categories available in the market.
eWorldTrade has also significantly captured the Asia and Pacific region, with China and Hong Kong being major trade destinations. Particularly in Hong Kong, buyers and sellers are able to acquaint themselves and make invaluable purchases through the channel of eWorldTrade. The company is not considered an alternative to locally based networks but has stepped up as a primary marketplace for B2B e-commerce in Hong Kong.
The company’s strong hold in the market will shape up the course of future where it will continue to grow and dominate the B2B e-commerce marketplace.
2. Tmall
Tmall was founded by Alibaba in 2008 as a spin-off of Taobao to cater to sellers of more upscale goods. Tmall has developed tremendously over the years and is now the second largest e-commerce website behind Taobao.
What differentiates Tmall from the latter is that it features a greater selection of international and high-end brands. Additionally, it is largely utilized for B2C and B2B transactions, while C2C retailers can be found on Taobao.
Having said that, the rules for selling on Tmall are among the most rigorous in China. While Tmall asks new merchants to pay a security deposit of approximately USD 25,000, you will also be charged sales commissions and an annual service fee.
The industry standard is to employ a Tmall Partner, which can cost tens of thousands of dollars simply to get started. That is not the case while selling on Lazada, where you may start selling with as little as a few hundred US dollars.
If you’re serious about entering the Hong Kong and/or mainland China markets, have a long-term perspective, and the necessary financial resources, Tmall may be one of the greatest websites to investigate.
3. JD
JD is Tmall’s primary competitor and was formed in 1998. The website is well-known for its sophisticated fulfilment and logistics skills, which are facilitated by highly automated processes.
It’s worth noting that JD offers two distinct platforms: one for local merchants (JD.com) and another for cross-border e-commerce merchants (JD.hk). The critical distinction is that you will access a broader audience through JD.com, but you will also need to register and import your products into China.
That is not the case with JD.hk, as merchandise can be stored in a bonded warehouse on mainland China or in a fulfilment facility in Hong Kong, for example. Following that, the products are transported straight to end buyers in China.
It’s significantly less expensive to start selling on JD than it is on Tmall, and the admission requirements are less onerous. Nonetheless, the platform requires that you operate a medium-large brand with tens of millions of dollars in annual revenue.
The sites are not used by international merchants looking to conduct market research at the lowest possible cost.
4. Taobao
Taobao is China’s largest e-commerce website, having launched one year after JD.com. Alibaba owns the platform, which is widely utilised by purchasers throughout China, including Tier 1–4 cities.
While Taobao is largely utilised by Chinese retailers, foreign companies cannot register on the website and must import their products into China. If a result, you must do product testing (as necessary), register with local authorities such as the AQSIQ, and print Chinese labels. These are merely examples of the necessary actions.
Registering and importing the products is not always a negative thing, as it allows you to leverage different distribution channels, including brick-and-mortar and internet sales.
Taobao’s most popular products include the following:
- Clothing & Apparel
- Food & Beverage
- Consumer Electronics & Smart Devices
- Mom & Baby Products
- Health & Supplementary Products
- Sports Equipment
Bear in mind that you cannot build an internet store through a Hong Kong corporation; instead, you must establish a firm in mainland China in order to sell on the website.
5. WeChat
With about 1 billion users in Hong Kong and mainland China, WeChat is the most popular social networking application. The application has been enhanced with a variety of features over the years, including payment solutions, mini-programs, and a browser.
According to reports, WeChat has developed its own ecosystem, and users no longer need to exit the program because everything is included within. WeChat is not a pure e-commerce marketplace in the same way that the other two are, but a hybrid.
Consider it similar to WhatsApp, where you can purchase goods and services, follow influencers, share content in a feed (moments), and make payments.
Foreign enterprises frequently engage third parties to assist them in establishing a local web presence, establishing WeChat storefronts, and marketing their products. Even though this is less expensive than selling on Tmall, for example, monthly fees can run into the thousands, if not tens of thousands, of US dollars.
As with Tmall and JD, third-party marketplaces do not welcome all sellers. Having some sort of brand presence in China, adequate resources, and a sound eCommerce business plan is typically the starting point.
6. DC Fever
The company concentrates mostly on digital products, with the purpose of providing up-to-date information about digital cameras, lenses, tablets, and smartphones. It was founded in 2002 and is primarily utilized by photographers and technologically sophisticated consumers.
It has about 1 million registered customers, it is probably one of Hong Kong’s largest e-commerce websites. You will not only find new things here, but also pre-owned products.
The website is in Chinese and should not be prioritized if you intend to sell things in Hong Kong. There are numerous additional alternatives that are more suited to overseas vendors.
7. Price
Price.com.hk is one of Hong Kong’s most popular e-commerce platforms, promoting a user-centric experience through the use of big data analytics. It’s a pricing comparison service that directs consumers to brand-specific websites.
Here, you’ll find a concise overview of the finest bargains currently available.
The website receives over 2 million monthly visitors and features everything from digital products to lifestyle products, cosmetics, and autos. Due to the fact that it is not available in English but only in Cantonese, it is utilised exclusively in Hong Kong.
Price has grown significantly and now employs approximately 200 people.
As with DC Fever, Price.com.hk is not your best option as an international vendor. Rather than that, you have a plethora of superior alternatives, as described above.
8. Global Sources
Global Sources is a Hong Kong-based B2B media company tasked with facilitating commerce from Greater China to the world through an English-based site that makes goods from China accessible to users unfamiliar with Mandarin.
It collects information on an estimated 3 million products and over 196,000 suppliers each year through promotional efforts on various media platforms. The company also has a user-friendly and efficient app and website.
It selects exhibitors before customers visit the show, provides relevant information about them and the respective suppliers. Global Sources has over 1.5 million international buyers in more than 240 countries and territories, in addition to generating US $43 million in leads through manufacturers.
9. DIY Trade
DIYTrade.com was launched in 1998 in Hong Kong and currently offers over 5 million products to its buyers. It is an e-commerce service provider that focuses on providing SMEs with the solutions they need and serves as a global online business platform.
Its success is attributed to its customization and integration with a wide range of platforms. DIYTrade.com offers sellers the ability to edit and design their websites, customize their catalog, and allow buyers to access the website on a mobile version. The DIY business also supports communication platforms like QQ and Skype on their website.
10. Amazon
Hong Kong will be no exception, and just as local buyers use global marketplaces to make purchases, local manufacturers and brands may leverage such platforms to expand their reach into new markets. Hong Kong retailers wishing to engage e-commerce through Amazon or another platform must provide for logistics and order fulfilment.
Additionally, merchants in Hong Kong are free to employ their own logistics arrangements. EasyShip compares the costs and delivery times of international shipping services from Hong Kong. DHL Hong Kong, Hong Kong Post, TNT, UPS, and FedEx are just a few of the courier firms that handle international packages.
So, what are the main common underlying success factors of these marketplaces in Hong Kong?
The main criteria underlying the success of these B2B marketplaces were transparency, market visibility and a plethora of business solutions for their buyers and sellers. Here are four success factors that we believe have contributed to their success.
- Adoption of an omnichannel strategy
These B2B e-commerce sites and marketplaces also have self-service features that provide its customers with an omnichannel experience to easily access any information about the products they want to buy on any platform. In addition, buyers and sellers are assured of safe payment transactions through a systematic and secure payment method.
- Integrate customer-centric processes
Many customers are entering the B2B marketplace with prior experience with practical omnichannel B2C e-commerce sites. With this previous expectation, B2B e-commerce companies should change their processes to easily meet the needs and expectations of inbound buyers and sellers.
- Easy to use platform with great user experience
Ease of use is a tabletop issue to reach market users, but not an easy task in B2B e-commerce. Unlike B2C buyers, B2B buyers have a slightly different buying experience because they are paid for their work. They prefer not to spend hours browsing websites and the catalog to find what they need, especially if it is a recurring purchase. Often times, they have a budget that might be subject to a pre-approval limit or require application approval before the purchase can be made. Therefore, current B2B markets have a specific impact on features such as requests for quotes, bulk orders, personalized pricing, as well as the personalization features to create a near-self-contained B2B user experience.
How did COVID-19 impact e-commerce?
Social unrest in 2019 was hastened by the COVID-19 pandemic, resulting in an increase in online purchases of basic products. Due to a loss in consumer traffic and revenue, several brick and mortar stores launched an online model to interact with customers and promote sales.
According to the August 2020 Visa Consumer Payment Attitudes Study, 52 percent of all shopping in Hong Kong during the pandemic was undertaken online, up from 40% in the pre-COVID-19 period — a trend that is projected to persist even after the epidemic. The growth of e-commerce has increased the use of credit cards and alternative payment methods such as Alipay, PayPal, and Google Pay.
Improving the client payment experience continues to be a top priority for online retailers, resulting in the introduction of innovative business models such as buy now pay later. For example, Singapore-based buy now pay later option Hoolah launched in Hong Kong in November 2020, allowing online consumers to pay in three interest-free instalments.
Another emerging business concept is live-stream e-commerce, which is gaining traction. Customers can watch and purchase from celebrity-hosted live online video feeds. Consumers tune into live streams to receive product recommendations from their favourite celebrities and to make online purchases.
