2nd September 2019 – (Hong Kong) Hong Kong is well-reputed as being a major international business hub. It is ranked among the first countries for economic freedom in Asia and has excellent infrastructure as well as a friendly business environment. Perfectly located for trade throughout the region, Hong Kong is also one of the best places to source and ship products, thanks to its borders with Mainland China. Entrepreneurs benefit from various advantages from the Hong Kong government as well and people opening an e-commerce business here will find numerous benefits that will help their business to flourish. We have crafted for you a guide to starting an e-commerce business on the bustling commerce-rich island.

Why Hong Kong could be the perfect place to start your business?

Low Start-Up Costs

The cost of starting a business is quite high in many parts of the world but in Hong Kong, the process is fast, reliable and affordable. Opening your company through an agency will cost between HK$ 5000 and HK$ 10000 with the following services:

  • Official documements and management of the incorporation.
  • Name search and Hong Kong company incorporation certificate for a year.
  • Company secretary and Hong Kong mail forwarding.
  • Legal address.

While you can also do it by yourself to save some budget, using an agency can be interesting to speed-up the process, generally around two weeks, and you will benefit from local experts to deal with the regulations and the government.

Low Taxation

High tax rates can be crippling for a lot of businesses, contributing to the failure of many, but the good news is that tax rates are generally low in Hong Kong. Indeed, business taxes in are currently at around 16.5% , making it easier for new businesses to get established.

The Hong Kong government also proposes a 0% taxes plan for companies that do not have employees in Hong Kong and that do not ship (transit) products to and/or from Hong Kong.

That rule can be interesting for those would want to launch an online business for instance.

Access to Mainland China

One of the greatest benefits of starting an e-commerce business in Hong Kong is the easy access to mainland China. This is an enormous potential market with approximately 829 million online users in 2018  (+7.3% compared to 2017).

Not only would your location allow you easy access to a vast number of potential buyers, but also access to one of the world’s greatest sources of affordable products. With access to so much potential, it is no wonder that e-commerce in Hong Kong is increasing in total worth by just over 7% every year .

Launching Your Business

Once you have all the paperwork in place, it is time to get your e-commerce store up and running. In the past, this would mean having to approach developers, UX and digital marketing specialists but platforms like Shopify have made the process easier and good news, they have a team in Hong Kong to help local business owners.

Shopify allows you to create an online store  but not only, there are numerous reasons why you should use such platforms:

  • Server Provided: Any website, it needs a host.This means additional cost as well as the chance of some technical difficulties. With Shopify and other e-commerce platforms, however, hosting is provided as part of your payment plan. This means reduced costs and greater convenience.
  • Comprehensive Packages: E-commerce platforms do come at a very affordable price, and this cost includes just about everything that you can need. Beginners will find packages that give them all they need to get started, while more advanced packages are tailored to people that have booming established e-commerce businesses.
  • Easy to Set-up: For many people, this is the main reason to use platforms like Shopify. These platforms have been designed so that even people with few to no technical skills can still make a professional-looking and fully functional e-commerce store. You will find pre-designed themes to choose from that you can then customise to your own personal liking.
  • Extensions: If there is a particular function you are looking for that will help you run your e-commerce site, it is probably available as an extension. Extensions include just about everything from helping with accounting, processing payments and even helping you to find products to sell.

Now that you have all you need to create your e-shop, it’s time to communicate and Hong Kong is full of challenges.

How to promote your brand in Hong Kong?

Promoting your shop will require effort and an understanding of the local behaviours and channels you can use. Let’s explore some techniques you can use in Hong Kong.

Develop your SEO strategy overtime

Search Engine Optimisation aims at ranking higher in search results from Google, Baidu, or any other search engines, when people are typing keywords regarding to the products you sell. It’s a free way to develop your sales and there are few things to take into considerations to develop your organic traffic and sales in Hong Kong:

  • Multilingual Platforms: Hong Kong officially has two languages, Cantonese and English, and since Mainland China is just few minutes away, millions speak Mandarin as well. Therefore, having a website translated in English, Traditional and Simplified Chinese are among the best practices in Hong Kong. From a SEO standpoint, it means that doing so, you will be able to reach search queries in the three languages since Google Hong Kong provides a version for each one of them. Platforms like Shopify also provide solutions for multilingual platforms.
  • Meta Tags: Title Tags are the brief headlines that people will see when they find your website on Google and other search engines while the snippet which describes the page is named Meta Description. Make sure that these include keywords that help the right people find you which means that you might want to include terms that will help to convert as well as the geo-location.
  • Backlinks: Seen as votes by search engines, they are the links to your store that are found on third-party websites. This is a very powerful SEO tool because it tells them that other people are talking about your products, essentially acting as a referral that will help push your pages in search results. You should get in touch with related website owners to try and get your products mentioned on their sites with a link to your site. Hong Kong blogs, newspapers and other websites related to your industry should be your focus.

Define the right social media approach

Social media are powerful to develop your brand and promoting it in the region require a proper strategy:

  • Honkongers are highly connected to social media and they are mainly using Facebook, Instagram, WhatsApp, Snapchat, Twitter, along with the main Chinese ones like Wechat.
  • In Mainland China, reports show that there are approximately 708 million social media users in 2019 , and most are mainly using their mobile phone to browse the web. Taking into consideration that Mainland China has a Firewall that prevent users to use the “Western” social networks without using a VPN, promoting your brand in China implies a proper strategy for Wechat and Weibo, mainly.

Number of social network users in China from 2017 to 2023 (in millions)

Source : Statista.com

If you both target Hong Kong and Mainland China, the potential audience you can reach from social media is enormous. You can make the most of this potential by building a community around your e-commerce platform and that will definitely help you increasing your turnover.

Invest on paid ads to increase your sales on a short-run

Paid advertising can be very effective when you launch your e-commerce platform, especially on a short-term basis since you can simply buy keywords in search engines using Google Adwords or target selected sets of users in social media with platforms like Facebook Ads.

Advertising online can also be quite cost-effective since small business can compete against larger companies, especially on Facebook Ads, where you can either drive users to your Facebook page to create your community or to your e-shop to develop the sales directly.

Hong Kong is a magnet for business from across the globe, and the e-commerce sector is booming. To benefit from it, it is important to understand the local differences, especially if you also target Mainland China and Hong Kong has all you need to incorporate your company, create your e-commerce platform and promote it.