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the cainiao inn store in the causeway bay area of ​​hong kong is about 70 square meters, which is considered a large-scale local store. the average daily parcel circulation is four to five hundred pieces; photography/li ying

on september 26, alibaba announced that it would invest 1 billion yuan to provide a limited-time free shipping service for orders over 99 yuan in hong kong for a period of three months, covering all light and small items. taobao and tmall are responsible for attracting investment for this project, while alibaba international is responsible for user operations and logistics in hong kong.

taobao has also relaxed the registration method for hong kong users, attracting hong kong consumers to register on taobao in multiple dimensions and make online purchases. in parallel with the free shipping service, taobao’s logistics system construction in hong kong and the further improvement of return services are also being promoted.

taobao has been making continuous moves in hong kong, china and the broader overseas market in recent times. it first launched the "global free shipping for large clothing" plan. the first phase (august) covers singapore, malaysia, south korea, hong kong, china, macau, china, taiwan, etc. in asia, we will expand from asia to australia by the end of the year, and then gradually achieve global free shipping. on september 23, taotian internally upgraded its overseas strategy to the "taobao and tmall overseas growth plan" and launched investment promotion for all industries and categories.

as one of the bridgeheads for mainland enterprises to go overseas, hong kong has important strategic significance.however, the current e-commerce penetration rate in hong kong is low, and people’s online shopping habits are not strong. this indicates that there is relatively broad room for growth here, and on the other hand, it also means higher market expansion costs.

in fact, taobao has been deeply involved in hong kong for many years, but the relevant person in charge of alibaba international did not disclose how it performed. at the same time, there are many e-commerce players in hong kong, including local e-commerce players such as hktvmall and international giants such as amazon. mainland e-commerce companies such as taobao face many competitors.

taobao further bets on hong kong market

taobao hong kong station’s limited-time free shipping service to hong kong will be officially launched from october 1. according to the official introduction of taobao and tmall overseas business department, this free shipping service will cover all light and small items, including clothing accessories, 3c digital, home storage, sports entertainment, makeup and skin care and other industries. consumers who purchase products with the "hk¥99 free shipping" label for over nt$99 can enjoy free shipping to hong kong self-pickup points or self-pickup lockers, and are free of cross-border shipping charges to hong kong.

the fourth quarter is the peak sales period for taobao. at this time, taobao hong kong launched a three-month limited-time free shipping campaign, which is equivalent to adding double insurance to the expansion of its hong kong business.

chen zijian, head of taobao’s tmall hong kong and macau business department, mentioned that taobao already had free shipping services to hong kong in the past, with the number of products in the tens of millions. now taobao has increased the number to over 1 billion products, covering all light and small items. judging from the overall situation of the platform, 92% of the products on taobao currently support official direct shipping to hong kong, and the arrival time has been shortened to 3-4 days. the previous logistics time limit was 3 to 10 days.

xiao xu, a consumer who studied abroad in hong kong, told us that she had already used tmall to shop in hong kong in 2020, and she could get free shipping and door-to-door delivery for purchases over 249 yuan. she mentioned that when logging in with a hong kong ip (network address), unpurchasable products will be marked, which also makes it easier for them to more accurately select products that can be sold to hong kong.

ye jianqiu, general manager of taobao and tmall's overseas business department, said at the press conference that in addition to free shipping services, taobao has also prepared two major benefits for new users, one is a 300 yuan red envelope, and the other is a 1,000 yuan red envelope every saturday at 12 noon. free quota. taobao’s intention to attract new customers is obvious.

at the taobao hong kong business conference, ye jianqiu is introducing the new rights and interests brought to hong kong users; photography/li ying

in addition, taobao has also relaxed the registration restrictions of taobao hong kong. from only using mobile phone numbers to register, it has opened a variety of registration channels. users can use google, facebook, alibaba accounts, and email third-party accounts to register for taobao, further reducing taobao’s hong kong’s usage threshold.

as taobao's business in hong kong gradually expands, its logistics system in hong kong is also being constructed simultaneously. zhao yiliang, general manager of cainiao group's overseas shopping export logistics department in hong kong, mentioned that from 2018 to now, cainiao has deployed distribution centers, cainiao self-pickup points, self-pickup cabinets and local logistics fleets in hong kong, gradually establishing a network covering the entire hong kong logistics network. so far, the number of rookie self-pickup points and lockers in hong kong has increased to 800. cainiao also has a b2c logistics solution for local e-commerce companies in hong kong, which can provide services such as door-to-door collection, self-delivery to warehouse and one-stop shipping.

in response to the upcoming three-month free shipping campaign, zhao yiliang said that they have doubled the container warehouse capacity and local distribution area, and are also rapidly expanding the scale and capacity of self-pickup points. by the end of the year, they are expected to have more than 1,000 pick-up points/cabinets.

previously, it was relatively difficult for hong kong residents to return goods purchased across the border. a hong kong resident left a message under relevant content saying:free shipping is not important, what is important is how to return it.

recently, the free shipping service has been upgraded simultaneously with the return experience. chen zijian mentioned that two return services will be launched in october. one is local return. if the goods purchased by hong kong users have a "local return" mark, they can return the goods to the self-pickup point and receive an immediate refund. . the other is cross-border returns. at present, taobao hong kong station has provided the ability to return cross-border goods for most goods, and 20 to 30% of goods can also be returned locally.

chen zijian said that in the past, returns to the mainland were subject to tax, but now they can be returned via the original route without paying taxes. there is also official logistics return service. although a certain shipping fee is required, it is not refundable compared to the past. there has been great progress.

chen zi insisted that this event needs to be coordinated with the simultaneous construction of logistics in hong kong. although the event is staged, the logistics infrastructure is long-term. "after we build these (logistics infrastructure), it is impossible for (e-commerce and related services in hong kong) to return to the previous level."

doing e-commerce in hong kong is not as easy as imagined

e-commerce has been developing slowly in hong kong. as an international city and financial center that developed rapidly in the early days, hong kong has extremely rich offline retail formats, with numerous commercial centers and diverse product types. various international commodities are circulated here, so hong kong residents are also accustomed to offline consumption. we randomly asked a hong kong resident who came to pick up goods at the cainiao station in the causeway bay area of ​​hong kong. the other person responded that he did not often shop on taobao.

according to data released by the census and statistics department of the hong kong special administrative region government, online sales accounted for only 7.8% of the total retail sales value in july 2024. during the epidemic, hong kong residents' online consumption demand was relatively strong, and the proportion of online sales reached 12.8% in november 2020. however, looking at the data for the first seven months of 2024, this proportion is between 6.4% and 8.5%.

online sales of hong kong’s retail industry in 2024; source: official website of the hong kong census and statistics department

in contrast, there are data from the mainland. the "china new e-commerce development report 2024" jointly compiled by the china federation of network social organizations and the china international e-commerce center shows that the country's total online retail sales will reach 15.42 trillion yuan in 2023, a year-on-year increase of 11%. china has maintained its leading position in the global online retail market for 11 consecutive years. among them, the proportion of online retail sales of physical goods climbed to 27.6% of the total retail sales of consumer goods.

although hong kong’s e-commerce market is not large in scale, it is not a “blue ocean”. competition is fierce.

there are currently three main types of e-commerce players in the hong kong market:the first is local e-commerce platforms such as hktvmall, yoho, ztore, and parknshop, the second is leading mainland e-commerce platforms such as taobao, jd.com, and pinduoduo, and the third is international e-commerce giants such as amazon and ebay.

among them, local e-commerce companies have established reliable logistics and fulfillment services in hong kong and are closer to the local market and consumers. in 2022, pinduoduo launched hong kong’s official container shipping service, opening up the channel between the platform and the hong kong market. users can choose "self-pickup point", "self-pickup cabinet" or "door-to-door delivery" service. although there is a certain shipping fee, pinduoduo’s low prices still shock hong kong consumers. last year, jd international also launched jd logistics' home delivery service for hong kong consumers with free shipping of 3 kilograms for purchases over 199 yuan, as well as free pick-up and free shipping services across hong kong.

from this point of view, taobao faces many competitors in hong kong. however, chen zijian also mentioned at the press conference,the current proportion of online retail sales in hong kong is still relatively small. every industry participant can first expand the "pie" when entering, so taobao does not regard other companies as competitors.

when xiao xu was studying in hong kong, he mostly bought food on tmall that were rare in the hong kong market, such as chili peppers and hot pot bases. he also bought daily necessities such as garbage bags and sanitary napkins, because the prices of these products on tmall were higher than those on tmall. it’s much cheaper to buy locally in hong kong. clothes, cosmetics, shoes, etc. are mostly purchased on local shopping websites in hong kong. at that time, most of the delivery times for tmall online shopping were within a week.

xiao xu mentioned that offline consumption in hong kong is very convenient. there are many imported supplies and some categories are more abundant than those in the mainland. however, the prices are more expensive, but most hong kong residents are used to this way of consumption. compared with local e-commerce and offline retail, tmall taobao has certain price advantages, but the logistics link is not as smooth as that in the mainland.

currently, taobao is promoting free shipping, red envelopes and free orders for new users in hong kong, which shows its desire for new users in hong kong. they are trying to gradually cultivate the e-commerce acumen of the hong kong market. the domestic e-commerce market has entered a stage of stock competition, with various platforms competing on price and service. at the same time, the second curve of growth has also been extended to broader overseas markets. although the total size of the hong kong market is not large, it can be used as a fulcrum to attract more overseas attention.

however, since the beginning of this year, due to changes in the consumption patterns of tourists and citizens, as well as the impact of the high exchange rate of the hong kong dollar, the total sales value of hong kong's retail industry has dropped significantly.

according to data released by the census and statistics department of the hong kong special administrative region government, compared with the same period in 2023, the value of total retail sales in the first seven months of 2024 is provisionally estimated to have fallen by 7.3%, the fifth consecutive month of year-on-year decline. department stores, durable consumer goods, as well as jewelry, watches, and designer gifts are known as hong kong’s “three retail giants.” the first and third items mainly rely on foreign tourists to drive growth, while the second item mainly relies on local residents of hong kong. however, judging from the data for the first seven months, all three major consumption categories have experienced sharp declines. this also reflects from the side,whether they are foreign tourists or local residents, their willingness to spend in hong kong is weakening.

against this backdrop of the retail industry, hong kong’s e-commerce market is also making slow progress, with the provisional estimate of the value of online retail sales in the first seven months of 2024 falling by 0.1%. at this time, it remains to be seen whether taobao is spending heavily to increase its exposure to the hong kong market and reduce the overall downward pressure on the retail industry.

at the same time, local businesses in hong kong are also targeting the e-commerce track. in october 2023, the chief executive's policy address announced the establishment of a cross-departmental e-commerce development group to implement policies to support small and medium-sized enterprises in e-commerce business to expand the market. the sar government launched the "e-commerce easy" in july to support enterprises to expand the mainland market through the development of e-commerce businesses. the government will continue to assist the local retail industry in upgrading and transforming.

author: li ying