Hong Kong brands are expanding into the Chinese mainland market through promising yet highly competitive cross-border e-commerce, hoping to complement their offline marketing efforts.
Cross-border e-commerce is an excellent channel that provides Hong Kong brands, which haven’t obtained sales permits on the mainland, with access to the vast market, said Calvin Chan Ka-wai, chairman of the Hong Kong Brand Development Council (BDC), in an interview with China Daily.
The mainland remains one of the world’s largest e-commerce markets. Official data shows that the market size exceeded 50 trillion yuan ($7 trillion) in 2023, year-on-year growth of 6.31 percent from the previous year. The expansion is fueled by a large consumer base of more than 900 million online shoppers.
The cross-border e-commerce contributed significantly, with a market size of nearly 17 trillion yuan, up 7.32 percent on a yearly basis.
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Among the Hong Kong products available on Tmall Global — a cross-border online shopping platform under internet behemoth Alibaba — pharmaceuticals and health supplements are the best-sellers. Wong To Yick medicated balm, which has a history of almost 60 years, sold more than 20,000 bottles within a month.
But Chan cautioned that Hong Kong brands may find it challenging to stand out amid the vast array of international competitors on a tiny phone screen. Tmall Global, for instance, is a hub for 46,000 brands from over 90 countries and regions.
The fierce competition can disadvantage high-quality Hong Kong products that come with higher price tags, as factors such as service quality and production standards can become “invisible” in the digital marketplace with consumers often prioritizing price, Chan said, adding that many products owe their online popularity not just to quality but strong internet marketing efforts.
“This is why we do not give up offline promotions while striving to enhance the image of Hong Kong brands through online channels, which can give consumers the chance to gain firsthand experience of the high quality of products made in Hong Kong,” Chan said.
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Additionally, the competition is intensified by the government’s low limits for cross-border e-commerce, which may not match the spending power of higher-income consumers, Chan said. According to the mainland Customs, online shoppers can import goods worth up to 5,000 yuan in a single transaction, with an annual cap of 26,000 yuan.
Raising these limits will make it easier for mainland consumers to buy Hong Kong products online, and help Hong Kong brands penetrate the mainland market more effectively, Chan said.
The BDC wrapped up a three-day showcase in Guangzhou, capital of Guangdong province, on Aug 25, where around 50 Hong Kong brands displayed more than 100 innovative and high-quality products. To enhance the physical marketing campaigns, the BDC launched a mini program We • Love Hong Kong Brand Mart on social media platform WeChat, which features these brands and links consumers directly to their websites or stores on mainland online shopping malls like JD.com and Taobao.
The mini program offers Hong Kong’s small and medium-sized enterprises a low-cost opportunity to explore the lucrative mainland market, Chan noted.
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The BDC sees other cities in the Guangdong-Hong Kong-Macao Greater Bay Area as the fastest and most resource-efficient places to conduct offline promotions. Chan said the council plans to use the region as a springboard to gradually move into other mainland cities and boost the visibility of Hong Kong brands.
