The Hong Kong Export Credit Insurance Corporation (HKECIC) and Hong Kong Trade Development Council (HKTDC) released a joint study titled “Unleashing the Lucrative Potential of Cross-border E-commerce for Hong Kong Traders”. The research underscores the immense growth potential of cross-border e-commerce while addressing the challenges businesses face.
Key Insights: Cross-Border E-Commerce Driving Sales Growth
The study reveals that 90% of surveyed companies expect significant sales growth through cross-border e-commerce over the next two years. Benefits highlighted include:
- Broader sales channels (69.0%)
- New market opportunities (50.3%)
- Enhanced brand awareness (48.9%)
Hong Kong businesses are leveraging digital tools and platforms to expand globally, making it easier for new entrants and smaller enterprises to compete internationally.
Emerging Markets: Mainland China and ASEAN in Focus
The research shows that Mainland China (61.6%) and ASEAN (44.3%) are the most promising growth markets. Companies also see opportunities in the US (42.2%), Japan (30.9%), and EU (30.0%). These regions offer a mix of established online shopping markets and growing e-commerce penetration.
HKTDC Principal Economist Wing Chu emphasized the importance of risk management tools and support for navigating market challenges, including:
- Insurance for cargo and payments (39.8%)
- E-commerce promotion services (34.4%)
- Enhanced logistics solutions (33.5%)
Challenges in Cross-Border E-Commerce Operations
Despite the growth opportunities, businesses face significant hurdles:
1. Logistics and Returns
- 38.4% report complex customs procedures.
- 31.3% cite high costs and challenges in managing product returns.
- 29.8% struggle with small-order international deliveries.
2. Platform and Financial Issues
- 51.1% highlight high commission rates and long payment periods on e-commerce platforms.
- 46.6% face challenges with fluctuating exchange rates and high currency conversion costs.
- 28.4% are concerned about expensive refund policies.
3. Market Competition and Regulations
- 84.9% identify intense market competition.
- 54% cite regulatory barriers.
- 41.2% struggle with financing and capital-related challenges.
Strategies to Unlock E-Commerce Potential
The study recommends strategies to help Hong Kong businesses overcome challenges and thrive in the competitive e-commerce landscape:
- Tailored Online Sales Strategies
Collaborate with KOLs (Key Opinion Leaders) and influencers or use short-form videos to attract consumers in target markets. - Leveraging Hong Kong’s Logistics and Financial Strengths
Hong Kong’s robust logistics infrastructure, extensive air cargo network, and diverse financing services position it as a prime gateway for global trade. - Enhancing Risk Management
Utilize trade credit insurance, cargo insurance, and payment protection to mitigate risks. - Seizing Opportunities in Mature and Emerging Markets
Advanced markets like Europe and the US provide stability, while Southeast Asia offers dynamic growth opportunities.
Expert Support for Hong Kong Traders
- Mr. Terence Chiu, Commissioner of HKECIC, highlighted the collaboration with fintech and reinsurance companies to offer tailored trade credit insurance solutions, aiding SMEs in securing export financing.
- Dr. Patrick Lau, HKTDC Deputy Executive Director, pointed to the US$6 trillion global e-commerce market projected for 2024, emphasizing the importance of Hong Kong businesses seizing opportunities in Mainland China, ASEAN, and beyond.
Hong Kong’s Competitive Edge
Hong Kong’s brand reputation, logistics excellence, and financial ecosystem make it a natural hub for cross-border e-commerce. As the study concludes, Hong Kong remains a vital gateway to Mainland China and a springboard for businesses exploring global markets.
