E-commerce is slowly expanding and taking over the retail industry in Hong Kong. According to Statista, e-commerce as a standalone sector is projected to have a revenue worth USD 7,598 million in 2021. If you’re thinking of starting your own business, e-commerce is the way to go.
In this article, we show you how choosing to go online can benefit you in the long run. By the way, once you want to focus more on growing your business, consider outsourcing your accounting to specialised accounting experts in Hong Kong. We convert statements from e-commerce platforms into books, provide accounting services, tax filings, and profitability reports.
Why Should You Start an E-Commerce Business Instead of a Physical Store?
In Hong Kong, the rental for physical storefronts is expensive, mainly because of the small country size. You’ll realise that similar to their housing prices, renting a store does not come cheap as well. This does not mean that you shouldn’t delve into the e-commerce sector in HK. Whether you’re thinking of moving your retail business online, or starting an entirely new e-commerce business here, we are here to help.
At Osome, we handle everything for you. If you are entirely new to starting and incorporating your business, be sure to check out how we can help. We do company registration for any industry, including retail, food and construction.
I Have an Existing Retail Business, Why Should I Switch to E-Commerce?
Make your company official.
Registering your e-commerce company will help you get tax reliefs and access to grants.
Hong Kong has been hit greatly by the recent COVID-19 pandemic, and you’ll notice many physical stores closing their doors. Thus, if you’re interested in starting a business in these times, e-commerce is surely worth a thought. For those of us who have an existing retail business but are forced to close our doors, consider switching to a work-from-home working structure instead. You can still keep your existing business up and running.
Lawrence is the second generation of a retail dried goods business. He has taken over the business from his father who is now retired. Before COVID-19, business was reasonably well. He had a loyal stream of customers who would patronise his shop for their dried goods. However, since people aren’t allowed to leave their houses during the pandemic, he has encountered a sharp decline in sales. Lawrence is forced to close his physical store as he is unable to keep up with the monthly rental costs with the decrease in income. Is his business still viable, though?
It surely is. Fortunately, Lawrence has been thinking about shifting the family business online, and this is a good opportunity for him to do the change. He will then be able to save his business, by avoiding the huge cost of rental for starters.
Having said that, starting an online business from home is considerably cheaper than a physical store. However, it isn’t as simple as just creating a website and then waiting for customers to patronize your store out of the blue.
How Will Your Business Activities Change With E-Commerce?
Explore popular platforms.
For new entrepreneurs, we recommend you use an e-commerce platform.
A shift in the working structure also means you have to adapt your current business operations.
Lawrence has moved his retail business online. What will he have to change to make the switch? He will have to think about how his current sales employees can work remotely, where is he going to move his current inventory, and how is he going to sell his goods without the customer interaction he had with a retail store.
The good news is that Lawrence’s dried goods brand is popular and they have carved a name for themselves after being in the business for a long time. He can start a website with the brand name, and customers who are unable to find the retail store can search for it. Alternatively, he can choose to list his products on popular e-commerce platforms. He will still have to put the word out there that his business is moving online, and probably spend some cash on marketing. Nonetheless, the total costs will still be cheaper and more sustainable than continuing to pay for the rental.
Starting a website from scratch is time-consuming and confusing if you do not know what you are doing. You may even end up wasting cash and energy that can be put into the more important things, such as your business.
Is Your Company Suitable for a Work-From-Home Structure?
Here are some points you can consider, to see if your business is suited for a remote working structure.
Do you outsource most of your jobs?
If you do, you should be fine with a team who are mainly working remotely, since they already are even with a retail store.
How do you store your company documents?
Do you still use hard copies for documents, or are they stored in the cloud? If you’re still using hardcopy receipts, try switching to email receipts. For example, when a customer places an order, the purchase confirmation and invoice will be sent directly through email.
Think about your staff’s working schedule and accounting matters, do you still keep a physical timetable or a thick folder for your accounts? You can consider using an online-based timetable to share team members’ shift schedules and switch to online accounting tools. Not only is it time-effective, but you’ll also have less paperwork to deal with.
Can you store your inventory elsewhere?
Like Lawrence, if you own a store, you’ll probably need to move your goods into a temporary location until you’re able to find a permanent one. Consider renting a small warehouse or using your home as a temporary solution, you can end up saving a huge amount. The decision to work from home saves you rent and electricity spent on office rental and maintaining the store. This extra cash flow can be invested back into the company or used to motivate staff.
Are your team members comfortable working remotely?
The younger members of your team should not have a problem with remote working structures. If they are used to serving customers in a physical store, provide training on how to reply to customers online through chatbots, emails, or phone queries. This may be a more effective way to help your staff get comfortable with working from home.
Are you in any of the following industries?
Some instances of suitable industries that can work remotely include the following.
- Customer service
- Sales and marketing
- Administrative work
- Social media influencers
- Bloggers or video loggers
- Affiliate marketing
- Selling handmade items
- Online coaching
There are more industries of course. If you think you can work effectively with a computer and an internet connection, your company is most probably alright with a remote working structure.
For small and new e-commerce businesses, be sure to pay attention to the necessary processes as well. Things such as registering as a private limited in Hong Kong, keeping invoices in order, filing annual taxes, managing cash flow, inventory management, accounting and payroll is still a must, even with an e-commerce business. Especially for accounting matters, it is challenging if you do not know where and how to start.