A survey of Hong Kong trade and manufacturing companies has shown that most expect online cross-border sales to increase in the next two years, however more than half are concerned about third-party platform commissions and long payment periods.
Titled Unleashing the Lucrative Potential of Cross-border E-commerce for Hong Kong Traders, the survey of 352 businesses was conducted by the Hong Kong Export Credit Insurance Corporation (HKECIC) and Hong Kong Trade Development Council (HKTDC).
In addition to the challenges posed by commission rates and invoicing, businesses also cited exchange rates (46.6%) and costly refund policies (28.4%) as problems faced in their e-commerce operations.
Noting that many e-commerce businesses have limited assets and insufficient collateral to secure financing from traditional financial institutions, HKECIC Commissioner Terence Chiu revealed that the HKECIC has collaborations with reinsurance companies and banks to develop bespoke trade credit insurance solutions, aiming to provide coverage for trade loans to Hong Kong e-commerce businesses.
“These initiatives encourage and support local enterprises in securing trade financing and expanding into cross-border e-commerce,” he said.
Other issues cited by businesses included intense competition (84.9%), regulatory compliance (54.0%) and complex customs procedures (38.4%)
Despite financing challenges, businesses are enthusiastic about the role of e-commerce in their market expansion with respondents saying that e-commerce broadens their sales channels (69%), allows them to access new opportunities (50.3%) or enhances their brand awareness (48.9%).
75% of surveyed companies are exporting into Mainland China through online platforms, followed by ASEAN (53%), USA (42.2%), Japan (30.9%) and the EU (30%).
Looking ahead, respondents generally agreed that, for the next two years, Mainland China (61.6%) and ASEAN (44.3%) offer the greatest growth potential.
