Most Hong Kong e-commerce businesses are eyeing offshore markets

More than half of Hong Kong e-commerce businesses want to develop new offshore markets, according to a whitepaper released by e-commerce platform creator SHOPLINE.

The report found that about three in five online merchants in the territory want to develop new products and 57.5 percent wanted to expand sales into other countries.

The most popular destination is Taiwan (45.8 percent), followed by other Asian countries including Malaysia and Japan.

One in five respondents said they want the O2O business model to be a focus of their future plans, including opening pop-up stores to build brand awareness and drive traffic online.

“While opening online stores has become a trend, the competition is fierce and the market is increasingly saturated,” the report concluded. “Hence the integrated O2O model has become an emerging concept for businesses.”

Just over half the merchants using SHOPLINE’s platform in Hong Kong said they operated physical stores as well as an e-commerce portal.

SHOPLINE, which has offices in Hong Kong, Taiwan, Ho Chi Minh City, Shenzhen, and Kuala Lumpur, says fashion and apparel is the most popular category for Hong Kong e-commerce companies, accounting for 36.7 percent. This is likely to be due to a low barriers to entry, especially in terms of the cost of setting sites up.

Food and beverage, household items, and beauty products make up about one-third of total sales. However, due to the low entry barrier, the ease of sourcing products, and fierce competition in the category, the conversion rate for fashion and apparel is less than for household products and other categories, ranking about the middle.

The report also found that discounts and free shipping are the most effective sales promotion strategies to retain customers.