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Inside Retail & Invest Hong Kong

Invest Hong Kong highlights e-commerce advantages for growing businesses

Asia is the world’s fastest-growing economic region – and with such a positive commercial outlook, the time is now here for retailers to dust off those business expansion plans and start looking at building new business opportunities in the territory.

For many company owners seeking a fresh foothold in Asia, Hong Kong has always represented the ideal regional hub perfectly placed for trading across neighbouring markets and beyond. Given all the changes that have occurred in the business world over the past decade, however, how does Hong Kong measure up as a premium location for expanding businesses in Asia?

Tasked with attracting foreign direct investment to Hong Kong and providing the information, advice and services that businesses need to succeed in the territory, Invest Hong Kong has recently published a series of booklets featuring opportunities in the digital ecosystem. Produced in collaboration with Price Waterhouse Coopers, the series describes the local investment climate and provides full details of the advantages of doing business in Hong Kong, covering creative industries, e-commerce for consumer products and accelerated digital growth in food services. They highlight the advantages of setting up shop in Hong Kong, providing a springboard for companies with great aspirations to reach consumers across the continent and globally.

Invest Hong Kong’s Angelica Leung (head of consumer products) and Sindy Wong (head of tourism and hospitality, including food services) are currently working to share interesting statistics and case studies about companies that have achieved success by leveraging digital advantages in the territory, where online retail is expected to double by 2025. Hong Kong’s digital infrastructure and strategic location make it easier for businesses to gradually build up their platform in the region, starting off with an online presence to facilitate ease of market entry in a region now famous for its e-commerce capacity.

“The key message for e-commerce in Hong Kong is that there are specific business functions we recommend companies put here,” explains Leung. “Those would be a logistics hub, a payments hub, and a regional marketing hub. As Hong Kong does not levy import or export duties, there are no additional customs costs for locals shopping internationally, apart from shipping costs. Importers/exporters only need to lodge accurate declarations within 14 days after the movement of goods. This opens the door for e-commerce players to use Hong Kong to service the whole of Asia because there’s so much flexibility.”

As Invest Hong Kong’s booklet series points out, the territory is the world’s freest economy with a business-friendly environment easily leveraged to establish a base to oversee Apac operations. Its e-commerce market is expected to benefit from emerging consumer demand and habits, new online shopping platforms, increased retailer digitalisation and the development of digital payment options.

Hong Kong’s average annual e-commerce spend is just over HK$15,000, making Hong Kongers the second highest spenders in the Apac region – and with an e-commerce market size of HK$58 billion last year projected to grow to $91 billion in 2025, there remains a huge untapped potential for online business. Beyond the numbers, businesses in Hong Kong benefit from its free port status, air cargo facilities and leading third-party logistics partners to enhance fulfilment rates and access coveted markets in Asean and Mainland China.

“Hong Kong is more than Hong Kong,” says Leung. “The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) comprises the two Special Administrative Regions of Hong Kong and Macao and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong Province. The total population in the GBA is more than 86 million, with a GDP that reached around US$1,700 billion in 2020. There are policies in place to promote coordinated regional economic development, with a view to developing an international first-class bay area ideal for living, working and travelling.”

While market access is one of the key attractions of a Hong Kong base, another core benefit hits right at the bottom line – the tax rate.

“Sometimes we take it for granted, but we always need to mention the low and simple tax system here,” says Wong. “Most startups and small businesses are levied with only 8.25 per cent profit taxes due to a discount that has been in place for many years. Even if you’re earning more than HK$2 million, you’re paying 16.5 per cent.  So it’s a very simple tax system, which is highly beneficial for companies traditionally hit by higher taxes.”

For those serious about taking the leap and setting their Asian expansion into motion, Invest Hong Kong welcomes companies to schedule a one-on-one chat with its specialist teams to explore opportunities specific to their industry.

“We provide free-of-charge advisory services to companies,” says Wong, “ranging from feasibility study market reports, market entry models, cost calculation models, regulations ordinance, contacts with the industry and with associations or chambers – or even if you need to find locations and staff, we can provide different service provider lists. We also facilitate applications for government licenses and can introduce other useful services such as applications for government funding and support.”

To connect with Invest Hong Kong, email aleung@investhk.gov.hk or swong@investhk.gov.hk.