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Tuesday, November 22, 2016, 10:42

E-commerce gives lifeline to sinking HK retail sector

By Chai Hua in Hong Kong

Slumping, hesitant businesses ponder ways to extend offline advantages to online channels.

E-commerce gives lifeline to sinking HK retail sector
Shoppers use Alipay to pay their bills at the Sa Sa International store in Hong Kong. ( Long Wei / For China Daily)

This Singles Day (Nov 11) , Chinese mainland online marketplaces such as Taobao and Tmall did something unusual: they extended their popular annual shopping festival to Hong Kong's consumers .

That's just as well, said retail industry experts - because, cross-border e-commerce is, for all practical purposes, a lifeline the drowning local retail sector can clutch to stay afloat.

The sector has been slumping for the last 19 months, forcing desperate industry operators, especially small and medium-sized retailers, to search for new business opportunities.

To be sure, the Hong Kong retail sector's sales have been falling. But, Anson Bailey, head of consumer markets at KPMG in Hong Kong, doesn't believe mainland shoppers, for long the mainstay of local retail sales, have lost interest in Hong Kong.

But he does admit they now have more destinations outside the mainland as alternative shopping options.

Agreed Joseph Yuen, chairman of the Hong Kong Federation of E-Commerce. Cross-border e-commerce, he said, also provides mainland shoppers more shopping options.

Yet, Hong Kong has something going for it. That is, much of goods sold by the mainland's major cross-border e-commerce platforms are sourced from Hong Kong, he said.

So, he believes local retailers should be able to generate new demand via e-commerce, especially from second- and third-tier cities on the Chinese mainland.

It is a view that Thomson Cheng Wai-hun, chairman of the Hong Kong Retail Management Association, concurs with. Cross-border e-commerce is the new opportunity for small- and medium-sized retailers in Hong Kong to reach outside markets, he said. More so because sales growth has been either slowing or falling in recent years.

Despite such perceived opportunities online, most retailers in Hong Kong are a hesitant lot these days, said Vincent Lau, assistant manager of Shiu Heung Yuen Bakery, a local food chain store.

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