Top Difficulties & Tips For Running An eCommerce Business In Hong Kong

Which place in Asia is among the top places to build an eCommerce business? 

The answer is Hong Kong, one of the most developed international business hubs in the world. The city’s fast-growing digital economy, high-demand consumers, and exceptional logistical system make it an ideal place for eCommerce companies.

However, starting and operating an eCommerce business in Hong Kong is no easy task. In this article, let’s discover some major difficulties in conducting an eCommerce company in Hong Kong and tips to overcome them. 

1. Business incorporation process problem

Before running your eCommerce business in Hong Kong, you have to go through the incorporation process.

In general, the eCommerce company formation process is pretty fast and not complicated. You only need to prepare and submit the required documents to the registered agent to register your business. 

Also, you’ll need a company secretary in Hong Kong to help you form your eCommerce company. When you register your business with a service provider, it will act as a company secretary to help you form your company. According to Section 474, Cap. 622 Companies Ordinance, having a company secretary is compulsory for any company registered in Hong Kong. 

After all the required documents are submitted, it would take just one day to successfully register your eCommerce business. 

A common problem in the eCommerce company incorporation process in Hong Kong is that the commercial address proof is often not accepted. If you can’t get the commercial address proof verified, you can’t incorporate your eCommerce company as well as open a bank account for your business. 

Solution: One of the simplest ways to successfully prove your commercial address is to get a local number. You should subscribe to a plan from a top telecommunication company such as Hong Kong CSL. Also, don’t forget to prepare some supporting documents like a tenancy agreement or utility bill. 

2. Bank account opening difficulties

After registering your eCommerce company, it’s time to open your business bank account. 

Some most recommended banks you should opt for are DBS Bank, OCBC Bank, or HSBC. You will need to submit some essential documents such as your certificate of incorporation, proof of commercial address, and business license.  

As most Hong Kong banks have strict requirements for opening a business bank account, you will face some difficulties when opening one. 

For instance, banks in Hong Kong usually require face-to-face appointments which can be inconvenient when you’re not in the city. It takes a long time to obtain the bank’s approval as banks in Hong Kong are protective of their financial services. 

Furthermore, banks in Hong Kong demand business proof. If your eCommerce business is a startup, providing your business proof is one of the toughest challenges as your startup hasn’t achieved notable business results. 

The bank account opening process for well-established eCommerce companies is easier since these companies have gained revenues that strongly support their business proof. 

Tips: You can open a business account from trusted fintech companies as an alternative to traditional bank accounts. Fintech companies or money service operators (MSOs) provide convenient bank-like financial services for businesses. The business account opening process with fintech firms is simple, straightforward, and 100% online. 

Some recommended fintech companies for eCommerce businesses in Hong Kong are Neat and Airwallex, and Statrys. You can register a business account online with these MSOs when you first start your business. After your company has operated and gained revenue which makes your business proof more convincing, you can open a traditional bank account. 

Currently, we are partnering with Neat and Airwallex to help you open your business account with ease. You can get to receive exclusive offers when you open an account with BBCIncorp. Don’t miss our offers!

3. Data security challenges

Data security is one of the major concerns of eCommerce companies not just in Hong Kong but anywhere in the world. Even though Hong Kong has a well-developed technological infrastructure, data security threats still exist. 

Fraudsters and hackers attacking the host server to steal consumers’ confidential data is nothing uncommon. Additionally, you should be extra careful with hackers phishing your business to steal sensitive information from your customers. Attackers tend to aim for new eCommerce businesses that haven’t strengthened data security.  

Tips: Remember to install security plugins and update them regularly to safeguard your eCommerce website. Also, opting for strong hosting providers such as Firewall to prevent SQL injection is essential. 

4. Accounting and auditing hassle

Figuring out accounting and auditing is vital for your eCommerce business operation. However, it is common to make mistakes in preparing the yearly accounting report and getting the report audited. Making such flaws will complicate and lengthen your accounting and auditing process. And you surely want to avoid that.

Solution: It is extremely important that you carefully keep records of all financial transactions of your eCommerce business. Keeping records of financial transactions since the beginning of your business operation will ensure the accounting and auditing process goes smoothly. Otherwise, you will have to waste a lot of time finding the missing transactions. 

Also, you can opt to work with an accounting service provider to help you ease the financial reporting process.

5. Intense competition with well-established competitors

After the effect of COVID-19, online shoppers in Hong Kong are more willing to splurge on goods from brands they trust. 

Brands that consistently provide high-quality products and pleasant shopping experiences are key players in the Hong Kong eCommerce market. As your business is a new player in Hong Kong, it would take lots of time and effort to carve a place in this competitive market. 

In addition, building customer loyalty is no simple task. Ecommerce companies that have been established for a significant amount of time also struggle in gaining loyalty from consumers. 

Solution: The majority of Hong Kong online buyers highly value shopping experiences. Therefore, you should watch closely how your main competitors provide customers with high-quality shopping experiences. Observe how your competitors build optimal eCommerce websites and maximize delivery efficiency. Then, learn from them and make improvements for your eCommerce business. 

Conclusion

In short, above are the major difficulties of starting and running an eCommerce business in Hong Kong along with tips to overcome them. Hong Kong is rich in opportunities for eCommerce enthusiasts around the world. So grab your chance, tackle the challenges, and ace your eCommerce business.