Top 6 E-commerce Platforms for Hong Kong Entrepreneurs
E-commerce plays a very important role in Hong Kong’s economy. If you are an entrepreneur looking to set up an e-commerce company in Hong Kong’s online retail industry, you could consider some of these popular online e-commerce platforms in Hong Kong.
Statista projects that this year, the sector alone would generate revenue worth USD $7,598 million in 2021. Revenue is expected to show an annual growth rate (CAGR 2021-2025) of 10.5%, resulting in a projected market volume of USD $11,308 million by 2025. This indicates an incredible potential for the industry.
Tmall
Tmall was launched by Alibaba in 2008 as a spin-off of Taobao and to cater to sellers of more premium products. Over the years, Tmall has grown significantly and is currently the largest e-commerce website after Taobao.
What sets Tmall apart from Taobao is that you can find more foreign and high-end brands. It is primarily used for Business to Consumer (B2C) and Business to Business (B2B) while on Taobao, you would find more Consumer to Consumer sellers.
How Much Does It Cost To Sell on Tmall?
Tmall requires new merchants to pay a security deposit of around USD $25,000 and you also have to pay sales commissions and a yearly service fee.
The standard is that you hire a so-called Tmall Partner which can set you back tens of thousands of dollars just at a start.
If you’re serious with your market entry in Hong Kong and/or mainland China, have a long-term mindset, and the finances required, Tmall might indeed be one of the best websites to start your e-commerce business.
Websites:
https://www.tmall.com/ (Local eCommerce platform)
https://www.tmall.hk/ (Cross-border eCommerce)
Tencent’s Wechat messaging app, which counts more than 1 billion daily active users, is also now a platform for online shopping.
In January 2021, WeChat said Gross Merchandise Volume for businesses running their own mini-programs in the app rose 255% last year to an undisclosed amount, while Gross merchandise value (GMV) for physical goods sold through those programs rose 154%.
With more than 889 million monthly active users and 200 million of them linking their WeChat account to bank cards, there’s no doubt that WeChat is a major player in Chinese social media and e-commerce.
WeChat Pay has made the platform more than just an instant messaging app. WeChat users buy movie tickets, book restaurants or hotels and make small payments using the app instead of cash or credit cards, which is constantly changing Chinese people’s lifestyles and consumer behaviors as well as providing new opportunities for brands to explore.
In addition to its new role as a sales platform, WeChat provides a platform for brands to get direct feedback from customers, and especially for foreign companies to test the Chinese market before further investments.
How Much Does It Cost To Sell on WeChat?
Foreign companies generally seek help from 3rd parties to establish a local web-presence, create WeChat stores, and market the products. Even if this might be cheaper compared to selling on Tmall, for example, monthly fees can still be in the thousands or even tens of thousands of US dollars.
As with Tmall and JD, hosted e-commerce platforms don’t accept all sellers that approach them. Having some kind of brand presence in China, sufficient finances, and a robust plan is normally the baseline.
Website:
Taobao
If you want to sell directly to consumers, Taobao is a great platform for you. Taobao is an online marketplace operating on a consumer-to-consumer (C2C) model, enabling individuals and smaller businesses to sell their products online via their own stores. Taobao's user base is known to be more price-sensitive than TMall and JD, making it the ultimate go-to platform for low to medium end consumer goods of all kinds.
Unlike selling your products via TMall or JD, opening up your own Taobao store isn't as expensive. This means that you can test your products in the market with low financial risk Not only that, but it is also fairly easy to create an account on Taobao to sell products, even for small businesses.
“If you can imagine it, you can probably find it on Taobao.”
That said, it is particularly well known for clothing, jewellery, accessories and computer hardware.
How Much Does It Cost To Sell on Taobao?
The cost of selling on Taobao is the cost of opening a company in Mainland China. You cannot open an online store with a Hong Kong company, but will have to open a company in mainland China to sell on the website. Most agencies charge around RMB 20,000 to 30,000 to help you register your business in China, and the application can easily take up to 6 months.
To sell on Taobao, the merchant needs to pay a guarantee fee to Alipay, who will then hold the money at least for 15 days. Alipay charges a fee for sellers who withdraw more than 20,000 yuan.
Taobao also charges for ads, photos storage, and plugins.
Website:
JD
Currently holding a 25% market share in the B2C e-commerce market, JD.com is the second-largest e-Commerce company in China, with a focus on B2C online retail. JD has a strong focus on selling home appliances and electronic equipment.
Similar to TMall, setting up on JD.com can be a complicated procedure and companies must meet strict regulations to get approval to sell their products. The reality is that more than half of brands that register to sell on JD are rejected during the application stage, primarily because the application process is rigorous to ensure only top-quality products are sold on their platform.
How Much Does It Cost To Sell on JD?
Similar to TMall, the initial cost of investment is relatively high once you are approved to sell on JD.com. The charges are listed below:
- Initial deposit USD $15,000 (refundable deposit)
- Annual fee of USD $1,000, per store
- Around 2-8% commission for each sale
Website:
Amazon
Accounting for a whopping 34% of U.S. online sales, Amazon is the marketplace no merchant going international should ignore. Hong Kong is no exception and just as local shoppers are purchasing on global marketplaces, local manufacturers and brands can also use those platforms to reach new markets.
Hong Kong merchants entering e-commerce with Amazon or another platform will need to arrange logistics and order fulfilment. Amazon also offers “Fulfilment by Amazon” (FBA) where Amazon will automatically process and deliver orders made on your Amazon store. Products with FBA are eligible for Amazon Prime’s free 2-day shipping service, which has over 80 million subscribed shoppers, and can help your products stand out. In addition, FBA provides multi-channel fulfilment (integrating to platforms like Shopify), 24/7 customer service, and return processing for merchants. Amazon also offers FBA in Japan and Amazon Prime Now in Singapore if you are planning to sell to these markets.
Hong Kong merchants are also free to use their own logistics arrangements. EasyShip compares the prices and times for worldwide shipping solutions from Hong Kong. Some courier services that do global shipments include DHL Hong Kong, Hong Kong Post, TNT, UPS and FedEx.
How Much Does It Cost To Sell on Amazon?
Amazon's Individual plan costs USD $0.99 per unit sold, and the Professional plan costs USD $39.99 per month no matter how many units you sell. It also charges a referral fee for each item sold. The amount depends on the product category.
Most referral fees are between 8% and 15%.Some sellers may incur additional fees (such as long-term storage fees) or pay for optional programs like advertising or premium account services. The cost to ship your orders depends on whether you fulfill your own orders or use Fulfillment by Amazon (FBA). Some sellers may incur additional fees (such as long-term storage fees) or pay for optional programs like advertising or premium account services.
Website:
https://sellercentral.amazon.com/
eBay
Today, there are more than 200 million eBay users worldwide, and 80 million listings online at any given time. eBay has a presence in 37 markets around the world and provides a platform for both buyers and sellers.
What started as a place to trade collectables and hard-to-find items has developed into a marketplace where you can trade practically anything. From everyday items such as mobile phones, DVDs and books to clothing, collectables and even cars.
How Much Does It Cost To Sell on eBay?
On eBay, There are two main types of selling fees: an insertion fee when you create a listing, and a final value fee when your item sells.
The amount they charge depends on the item's price, the format and category you choose for your listing, any optional listing upgrades you add, and your seller conduct and performance.
Every month, you get up to 200 zero insertion fee listings, or more if you have an eBay Store.
Final value fee is calculated as a percentage of the total amount of the sale. The total amount of the sale includes the item price, and any shipping and handling charges. Sales tax isn't included in the calculation.
Generally, to list an item costs USD 50 cents, but on that single listing there can be any quantity, for each item sold 7% of the sale price is applicable.
Website:
https://pages.ebay.com.hk/eng/paypalverified/faqs.html
Tip
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