With the COVID-19 restrictions being so stringent in Hong Kong, physical retail stores are finding it hard to survive. We have seen true behaviour change as Hong Kong consumers have quickly adopted an online-first approach to shopping. In parallel businesses of all sizes are scrambling to digitally transform themselves and shift to e-commerce. With a well established logistics infrastructure and revenue in the e-commerce market projected to reach US$25bn in 2022 (according to Statistica). Hong Kong is truly the best place to start your e-commerce business. Don't miss the opportunity to be part of the e-commerce boom.
So, what is e-commerce?
E-commerce is the buying and selling of products and services over the internet. The name comes from "electronic" commerce. The most popular e-commerce stores and shopping marketplaces in Hong Kong include Alibaba's Taobao, HKTVmall, Carousell, Amazon, price.com.hk. Not to mention, a lot of direct to consumer brands using Shopify to build their business on.
The key difference between brick and mortar business and e-commerce is the way in which data and money is transferred. For e-commerce companies data holds the key to making data driven decisions, but with more transactions comes more data. Businesses can quickly find themselves overwhelmed with the noise and complexity that comes with translating business data to actionable insights. Click rates, total online store sessions, total orders, total sales, cart abandonment...the list goes on. Although all the data exists, not everyone is a total guru in translating data into insights and growth strategies. (We can help)
Why Hong Kong is a great place to start your e-commerce business?
- Fast and stable internet.
According to speedtest.net Hong Kong consistently ranks in the top 10 countries in the world for having the fastest network speed. Stable network infrastructure is an important base for developing an e-commerce business.
- Favourable tax system.
After establishing your e-commerce company in Hong Kong, you will have to file your tax to the government (including online businesses). However, the great news is that Hong Kong has one of the world's most favourable tax system, with corporate tax capped at 16.5%. The two-tiered profits tax rate system is at 8.25% for the first HK$2 million of profits. Profits above that amount will continue to be subject to the tax rate of 16.5%. (Applicable to any year of assessment commencing on or after April 1, 2018.)
- Government funding support to e-commerce companies.
To support Hong Kong's digital transformation, there are many government grants and schemes, which e-commerce companies can directly use. Hong Kong companies using "IT services and solutions" to increase productivity and transform their business process can take advantage of the Hong Kong government's Technology Voucher Programme (TVP). The funding support can go up to HK$600,000. Another great one is the Trade and Industry Department's SME Export Marketing Fund (EMF). The funding support per organisation can go up to HK$400,000 or up to 50% of your marketing expenditure. If you want to understand more on government funding, chat with us today.
- Hong Kong is a global financial centre.
Hong Kong ranks 3rd in the world and 1st in the APAC region in Global Financial Centres Index. The financial services sector in Hong Kong is of the highest standard. In recent years, many traditional banks like Bank of China, HSBC and Standard Chartered have put a lot of effort in their digital banking services. Payments transfers, banking and investment services are increasingly digital. Online e-commerce businesses in Hong Kong can be built and scaled remotely thanks to some financial services and virtual banks' innovative offerings.
- Starting a business in Hong Kong is easy and can be done online.
It requires few simple steps to register a company in Hong Kong. You could register the company either in the company registry office or register it through their online website. To lift all that administrative burden, you can also register your company through our FundFluent platform. If you have any difficulties, please do not hesitate to contact us.
- Great business environment and a gateway to Mainland China.
Hong Kong has been the top global financial centre for many years. In addition to having strong business relationships with international countries, Mainland China plays a very important role in its development. The government's focus on facilitating the economic development of Greater Bay Area has meant that many companies set up their Hong Kong office as headquarters in APAC. It is without doubt that Hong Kong will continue to become the most attractive city to start a business.
Are you ready to chase your dream and be part of the explosive growth in e-commerce? Let's chat about your e-commerce business in Hong Kong.
FundFluent is a SME focused platform that helps you kick-start, build and scale brilliant businesses. From registering your company to accessing flexible funding options, we believe in making this world more SME friendly through technology. Let's chat?
