“Shenzhen might not be as proficient and flexible as Hong Kong in terms of legal, financial and commercial matters, but Hong Kong should not forget to reposition itself and adapt to the new way of doing businesses, or otherwise Hong Kong may not be able to maintain its status as a financial hub.”
This view was held by some attendees of the Sixth Shenzhen-Hong Kong E-Commerce Development Forum, held just days ago in Qianhai, Shenzhen. At the forum, Shenzhen and Hong Kong representatives from the mobile, clothing and cross-border e-commerce industries shared their views on what opportunities there are for further collaboration between the two cities.
Jason Feng, General Manager of Import Business Dept. of Shenzhen Globex eServices Limited , said that Globex processes about 30,000 orders daily and has embarked on collaborations with many retailers including Tmall. Work is underway for contracts to be inked with Amazon, Wal-Mart, Lotte, and Target.
Collaboration Between Shenzhen and Hong Kong Should Move with the Times
President of the Internet Professional Association of Hong Kong, Dr Witman Hung, who is also one of the forum’s organisers, said that the business community in Hong Kong hope for greater interaction with Shenzhen companies, especially with those located in Qianhai.
Dr Hung, who is also Principle Liaison Officer for Hong Kong of Qianhai Authority, noted that Qianhai’s business-friendly policies and Shenzhen’s highly-skilled talent pool, when paired with Hong Kong’s marketing expertise, can help Shenzhen move towards marketization, rule of law and internationalisation.
This would develop Qianhai & Shekou Area into an example of e-commerce for Guangdong Pilot Free Trade Zone, thereby setting up rules and regulations for trade that can be easily replicated elsewhere, thus making it more competitive on the international stage.
Said Emil Chan, Vice-President of the Internet Professional Association of Hong Kong: “Hong Kong should lower its stance, re-evaluate the way of doing business and strengthen its collaboration with mainland China. Otherwise, Hong Kong can not retain its status as a financial hub.”
Mr Chan said that Hong Kong built its fortunes over the past 100 years through entrepot export trade and finance upon its advantage as an intermediary in a world of asymmetric information, simliar to traditional trading companies. The Internet’s aim, however, is to achieve information symmetry, and with its prevalence, Hong Kong could seize the opportunity to e reposition itself, strengthen its collaboration with Shenzhen and make good use of the platform offered by Qianhai.
Shenzhen Handphone Industry Association has 2,300 member enterprises, which account for about 80 per cent of mobile phones manufactured globally, said President of Shenzhen Handphone Industry Association Sun Wen Ping. Eight in 10 of these mobile phones manufactured by its members are exported elsewhere, he added.
Said Sun: “Shenzhen and Hong Kong set up an International Mobile Telecommunication Union in Hong Kong last year, which has been immensely useful in attracting international mobile phone makers and dot-com enterprises.” Sun said believes that Hong Kong is a platform for Shenzhen companies to reach out to the international market, and both cities should explore collaboration in many other fields than just the traditional industries such as manufacturing, processing, retail and logistics.
“Traditional collaboration between Shenzhen and Hong Kong are reaching their saturation points; both cities should explore new ways forward in the mobile internet industry and related applications. Where there’s a terminal, there must be channels, and all channels must be piped with content. Hong Kong is still a better place than Shenzhen to develop software and produce content,” said Sun.
Secretary-General of the Fashion Designers’ Association of Shenzhen Dai Ling also noted that many mainland fashion companies hope to establish their own brands to be sold online in Hong Kong and overseas. This creates immense opportunities for cross-border e-commerce in fashion.
Hong Kong’s cross-border e-commerce firms do not understand mainland China well
Feng Quan said that Hong Kong’s cross-border e-commerce firms not yet have a good grasp of the mainland Chinese market. Many of them are content with serving C2C (customer-to-customer) on small transactions, and few are engaged in B2C (buyer-to-customer) e-commerce.
“Many major e-commerce platforms in mainland China do publicise industry figures online to help steer cross-border e-commerce transaction trends, but those in Hong Kong are unaware of this.” Feng added that companies can achieve cost savings if they make use of Qianhai’s bonded port to conduct cross-border e-commerce trade.
“Most cross-border sales take about 10 to 15 days to complete, while cross-border e-commerce needs only about five. E-commerce can also help achieve 30 per cent in cost-savings, including costs incurred by logistics, warehousing, packaging and manpower.
“Because the tax is based on a company’s revenue and not the type of products it sells, operating in the bonded port can help lower costs when faced with varying tax rates for different goods. This will translate into benefits for the consumer,” said Feng.
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