Logistics and warehousing costs are some of the major hurdles for e-commerce operators in Hong Kong, but the cost may still less than shops rental price.

E-commerce operators in Hong Kong are bearing logistics and warehousing costs as major operational expense but they need not pay shops rental which is exceptionally high.

Hong Kong’s high rental fuels online shopping boom.

High rent is the major reason for businesses not to keep physical stores in Hong Kong. Therefore, local retail chains, like Belle International and Chow Tai Fok have been closing their outlets recent years, and online shops boom because shoppers are more willing to shop online and sellers can save from the expense of physical stores.

Retail chains are running their online stores along with their physical shops, e.g. 759 online (0759.HK) and Watsons. Meanwhile, some sellers prefer operating their shopping sites to owning physical stores; some sellers partner with online selling platform such as FingerShopping and hktvmall(HKTV:1137.HK) to leverage their’s edge in logistics and payment systems.

Rapid growth of e-commerce creates more opportunities for logistics and warehousing sectors.

Compared with countries such as Singapore and South Korea, Hong Kong is clearly lagging behind in terms of the popularity of e-shopping, which accounts for less than 3 percent of retail sales.

An oft-cited reason is that Hong Kong is small, which makes buying from traditional retail outlets convenient, so there is little need or incentive to shop online.

Not so, says e-commerce platform FingerShopping. “Precisely because Hong Kong is small, a lot of products are not sold here. High rent also makes it hard for companies to maintain a physical store in Hong Kong,” a FingerShopping executive told the Hong Kong Economic Journal.

But there is demand for quality overseas products, which is why the market offers good potential.

However, it will take time for Hong Kong to catch up, the executive said.

While some companies prefer to operate their own standalone shopping site, some partner with service providers such as FingerShopping to provide a transaction platform, leveraging the latter’s edge in logistics and payment systems.

Source: Eji nsight News

More Related News: