Hong Kong plans e-commerce shopping festival to help city’s brands get leg up in mainland China market, commerce minister says
- Secretary for Commerce Algernon Yau says it is crucial to explore ways for Hong Kong brands to be prominently featured on mainland platforms
- He adds city’s businesses need to think of sales strategies, including how to reduce costs to enable competitive pricing
Secretary for Commerce and Economic Development Algernon Yau Ying-wah said on Wednesday that local brands also needed to think of sales strategies if they wanted to target the mainland market, including ways to reduce costs to make their pricing more competitive.
“It is crucial to explore ways to ensure that Hong Kong brands are prominently featured on mainland platforms so that users come across them as soon as they enter [the sites],” Yau told a radio programme.
“Hong Kong brands are of high quality, and people on the mainland have great confidence in them. But it is essential to consider how to promote brand recognition in another market, which involves sales strategies,” he said.
Chief Executive John Lee Ka-chiu said in his policy address last year that Hong Kong shopping festivals would be organised on mainland e-commerce platforms to promote awareness of the city’s brands and tap into the nation’s domestic consumer market.
In his budget last week, Financial Secretary Paul Chan Mo-po also proposed injecting an extra HK$500 million (US$63.9 million) into the Dedicated Fund on Branding, Upgrading and Domestic Sales to help small and medium-sized enterprises bolster their competitiveness and tap into mainland and overseas markets.
One programme under the fund, “e-commerce Easy”, allows companies to receive HK$1 million to launch new e-commerce projects, capped at HK$7 million per enterprise.
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But Yau said many issues still needed to be addressed after the first meeting of an interdepartmental task force in January, particularly on ways to sell Hong Kong products on the mainland and overseas.
“It entails a wide range of considerations, such as determining the appropriate platforms, achieving prominent visibility, addressing tax-related issues, resolving logistics challenges and managing warehousing concerns,” he said.
“It is not an easy task as the e-commerce platforms in mainland China are already well-established. We need to figure out how to achieve a high level of service and satisfaction”.
Stanley Lee Kei-chuen, president of the E-Commerce Association of Hong Kong, said it was increasing difficult for local brands to enter mainland platforms due to the growing presence of international brands.
“Mainland consumers have a lot of choices when it comes to online shopping. Products made in Hong Kong need to be very appealing to them, otherwise they can’t drive [purchasing] desire,” he said, adding that some Hong Kong jewellery brands were relatively successful over the border due to their distinctiveness.
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Lee also said that many Hong Kong small and medium-sized enterprises were cautious about the high cost involved in acquiring traffic on mainland e-commerce platforms as they were competing with an overwhelming number of companies selling similar products.
“Hong Kong businesses face the challenge of increasing traffic to their products to gain visibility. They might invest in promotional campaigns through social platforms such as Douyin live streaming and Xiaohongshu, but there is a risk that sales revenue may not cover the costs to get higher traffic,” he said.
Xiaohongshu is the mainland’s Instagram-like social media platform.
If the government could collaborate with mainland platforms to create a “green channel” for Hong Kong businesses to have their products prominently featured, it would be a great help for local brands, Lee added.
China’s online retail transactions surpassed 710 million digital buyers, amounting to US$2.29 trillion in 2020, according to global research company eMarketer. The firm projects transactions will reach US$3.56 trillion by 2024.
China was the largest market for e-commerce in 2021, generating US$1.5 trillion in revenue and placing it ahead of the United States, eMarketer added.
