2017 | ISSUE 2 English繁體简体
Integrated Solutions eNewsletter
THEME STORY: Hong Kong Re-industrialization. Opportunity?

HK I.T. needs to CATCH UP!

Does e-Commerce Bring More Opportunities to Enterprises?

The advancement in technology and the changes in marketing demand brings new development in commerce and trading. The rising popularity of the use of mobile networking attracts more users to transact online via e-Commerce platforms. Yet, e-Commerce stretches beyond online shopping. There are mainly four models for e-Commerce, including "Business to Business", "Business to Customer", "Customer to Customer" and "Online to Offline". Amazon from the United States and Taobao from Mainland China are two of the leading e-Commerce platforms. As a result of the high mobile network penetration and our advantaged role as a transit port, e-Commerce also starts to gain popularity in Hong Kong.

The popularity of e-Commerce has a positive impact on trading activities and also the recent development of smart living. Smart Living can usually be referred to as a knowledge system and / or an industrial chain. It aimed to improve one's living quality through technology. Smart living covers areas such as living space, healthcare and cultural-oriented living technology. E-Commerce is part of the cultural-oriented living technology. It brings convenience to users across aspects such as clothing, food, housing, transportation, education and entertainment. The borderless e-Commerce allows users to acquire customised service with low transaction cost and time effectiveness.

From an enterprise's perspective, there are at least three other advantages of e-Commerce. First, e-Commerce lowers the purchasing and storage cost as the real-time online statistics can effectively reflect and predict the market trend. Second, e-Commerce shares the advantage of the world-wide web that allows enterprises to communicate and interact with customers on social networking platforms. Third, e-Commerce also opens up markets for the enterprise as the Internet expands the pool of potential customers across national borders.

However, e-Commerce also has its limitations. The reliance on the virtual network may complicate the enterprise-customer relationship when there is not any physical entity to deal with issues regarding the after-sales service and product return. In order to run an e-Commerce smoothly, it will require a more advanced management information system to deal with issues such as order aggregation, logistics, fund transfer and integration of various systems in a more accurate and synchronised manner which will greatly affect the order completion time.

Besides, e-Commerce and the online transaction can also cause security problem, namely Internet fraud, credit card fraud and other e-payment issues. These issues are mainly caused by the difficulties in authenticating the user identity. If users overlooked the importance of authentication and data encryption, they might risk leaking their personal information or causing monetary loss. Credit card fraud is another common problem. Users should be alert to security hazards to avoid phishing attacks, fraudulent transactions and other forms of security fraud. Hong Kong Government has noticed the rising need of security measures for online credit card transaction. Nowadays, most banks offer extra security measures, such as "Visa Verification" and "MasterCard SecureCode". The Hong Kong Monetary Authority also requires the banks to alert the user by sending SMS when a suspicious transaction is found.

Apart from these, e-Commerce has also fostered the development of online payment methods. Most popular online payment methods belong to the category of "Third-party payment". Paypal and WeChat Pay are two significant examples. Paypal allows users to transfer payment by e-mail with just a small amount of service charge. WeChat Pay requires users to assign their credit card to create a "Wallet". After the assignment, users can transact through scanning the QR code or bank transfers. Yet, these new online payment methods still bare the risk of Internet fraud and personal information leakage.

The United States and China are two important pillars in sustaining the growth of e-Commerce in view of their success in the development of online payment methods. As mentioned, Amazon and Taobao are two of the most popular e-Commerce platforms. Yet, they have very different target users and profit gaining methods. Amazon is unique in the sense that it is more than an e-Commerce platform. Amazon is actually a transnational e-Commerce enterprise with its own supply chain and storage. Its service covers from retail to publication and cloud computing service. For Taobao, it is an Asian-oriented online shopping platform focusing on providing service under the "Customer to Customer" model. Users can create their own online shop and interacts among themselves freely. In addition, Amazon mostly takes advantage of the Internet to minimise the pressure of fixed asset as well as rental and storage cost faced by traditional business. For Taobao, it mainly gains profit from advertising and providing customised analytical services. The success of Amazon and Taobao reveals that there are multiple ways to make good use of the Internet to expand the potential of an enterprise.

E-Commerce has also started to gain popularity in Hong Kong. According to a report conducted by Go-Globe in 2015, Hong Kong has a market size of HK$350 million in e-Commerce. With the increasing rental pressure on enterprise, there is a rising number of online stores established in Hong Kong. 3M Hong Kong Limited, Bonjour Holdings and Bossini International Holdings Limited are three of the most successful examples in Hong Kong in relation to e-Commerce. Although the "Business to Business" model is relatively more popular in Hong Kong in the operation of e-Commerce, the enterprises and consumers in Hong Kong begin to see the convenience and benefit of e-Commerce through the trend of online payment and diverse logistic services. It is not impossible that more and more users will give e-Commerce a try in the near future.

In short, the prevalence of e-Commerce is inevitable. The continuous development of the e-Commerce platform and online payment method also creates a favourable environment for the future of e-Commerce in Hong Kong. Therefore, enterprises should consider grabbing this golden opportunity to further expand the market for their business in response to this new era in commerce and trading.