Online giants fight it out on a spicy note

Big name mainland e-commerce retailers walk the extra mile in global push, piling heat on HK's online players

"At last, I can now get my childhood snacks easily at Tmall Supermarket without having to give up the comfort of home," exclaimed Sophie, grinning nostalgically, as she opened a food package she had ordered online a day before.

It was a plastic bag full of latiao - a spicy red-hot snack made from gluten that's particularly popular among youngsters and which has been driving a multi-billion-dollar business on the Chinese mainland.

Sophie, who hails from Jilin City in the northeastern province of Jilin and has been living in Hong Kong for almost a decade, cheered the rapid penetration of mainland e-commerce enterprises in the SAR, saying they're doing a great service in meeting the needs of overseas Chinese.

The kick-off of Alibaba Group's Tmall Supermarket in Hong Kong has made it easier and convenient for customers like Sophie to lay their hands on their favorite hometown products within a day, just with a click on their smartphones without having to trudge all the way north to Shenzhen.

Mainland e-commerce behemoths have been stepping up their push to tap the "blue oceans" with the domestic market having come of age. Hong Kong, with its geographical advantage, has become a major battlefield for mainland online retailers "going out". Besides the traditional e-commerce business, they're seeking to upgrade their payment modes, as well as logistics prowess - decisive factors in taking on overseas markets.

Alibaba launched the worldwide expansion of its B2C (business to customer) marketplace Tmall World last month, with Hong Kong among its priority markets. The group aims to help merchants and brands on its platforms to extend to the global Chinese market, allowing some 100 million overseas Chinese access to 1.2 billion products, with Alibaba providing "end-to-end" solutions, including logistics, payment mode and localization support catering to the needs of each market.

For Hong Kong customers, Tmall offers one-day shipment services and various payment methods, such as using Alipay, credit cards and even Octopus cards.

JD.com - another major online B2C retailer on the mainland - is also in the fray, expanding its global footprint with the launch of JD Global, covering 200 countries and regions. The service enables direct shipment of selected goods to Hong Kong in March. The company, saying it will further enrich its products and expand direct shipment destinations, accepts only PayPal as the method of payment, while Tmall does not accept PayPal.

Maggie Wu Wei, chief financial officer of Alibaba Group Holding Ltd, said in Hangzhou the company expects to see a top-line growth rate of 45 to 49 percent for this year, pushing up its annual revenue to between 229.4 billion yuan ($33.9 billion) and 235.8 billion yuan.

Despite the growing pressure from the big strides made by their mainland peers, Hong Kong's e-commerce platforms aren't deterred, saying they still remain competitive.

HKTVmall - a Hong Kong-based online shopping platform set up by media entrepreneur Ricky Wong Wai-kay - doesn't see Tmall as a rival, stressing it welcomes more e-commerce players in the local market in providing fine options for consumers and developing the city's online retail market together.

Stanley Lee, chairman of the E-Commerce Association of Hong Kong, is on the same page.

"Tmall and HKTVmall focus on different categories of products, so the local retailer will not be much affected by Tmall's emergence in Hong Kong," he said.

"Tmall's strength lies in their inexpensive quality goods, while HKTVmall offers a wider range of local brands and overseas products, such as Dyson's electric appliances, which are much cheaper than Tmall's. The two categories of products cater to customers' different tastes."

Although Lee sees uninterrupted growth in the local online shopping industry, he believes it won't be easy for it to be on par with the mainland's as the Hong Kong market is relatively small and warehousing and logistics costs are high. "Above all, it's too easy to buy anything in this shopping paradise."

HKTVmall is upbeat about the city's online shopping business, noting the widespread use of mobile devices which have been the driving force behind the usage of the internet.

"Many people in Hong Kong are sophisticated and experienced in online shopping. They're even able to source products from all over the world with larger varieties than resellers. Our customer base had expanded by 73 percent from 2015 to 2016, and the growth continues," HKTVmall told China Daily.

As of December last year, HKTVmall's online shopping turnover had hit HK$185.8 million - a whopping 410.5-percent increase over 2015. The platform, which was set up in early 2015, expects continued high growth potential in the coming years.

cherrylin@chinadailyhk.com

(HK Edition 07/21/2017 page8)