On November 2, the 'Science and Technology Innovation Board Daily' (Reporter Xu Cihao) reported that following Taobao and jd.com including Hong Kong, Pdd Holdings also took action.

Recently, Pdd Holdings also announced the launch of Hong Kong free shipping service. This service is subsidized by the platform for freight in the Hong Kong segment, attracting more Hong Kong users to shop on the platform. The shipping operation for Hong Kong free shipping orders is the same as regular orders, and merchants do not need to bear the second transportation cost from the consolidated shipment to the Hong Kong delivery address, as this cost is borne by the Pdd Holdings platform.

In the view of Zhuang Shuai, the founder of the Bailian Consulting, with the continuous development of the e-commerce industry, the market competition is becoming increasingly fierce, and major e-commerce platforms are seeking new growth points. Inclusion in the free shipping zone not only helps to improve the shopping satisfaction of local consumers but also enhances the trust and stickiness between e-commerce platforms and Hong Kong consumers.

"To meet the demands of the free shipping zone, e-commerce platforms need to strengthen cooperation with logistics companies to improve logistics efficiency and service quality. At the same time, this will also promote innovation and upgrading of the logistics industry in Hong Kong, driving the logistics industry towards a more asia vets, efficient direction."

E-commerce giants use free shipping to compete in the Hong Kong market

According to data released by the Hong Kong Special Administrative Region’s Census and Statistics Department, the proportion of online sales in Hong Kong from January to July 2024 has always been below 10%, peaking at only 8.5%. In comparison, according to market research company eMarketer's data, in 2023, the e-commerce penetration rate in mainland China has already reached as high as 47%. This data gap undoubtedly provides broad imagination and opportunities for e-commerce giants to develop in the Hong Kong market.

In the past, there were three ways for merchants to send goods to Hong Kong: official consolidated shipping, official direct shipping, and merchants/consumers finding logistics carriers for transportation. Regardless of which method, the postage was not low, and the after-sales and services could not be guaranteed.

In August this year, Taobao had already implemented free shipping for the clothing industry in Hong Kong as a trial. After receiving positive feedback, on the eve of National Day, Taobao announced an investment of 1 billion RMB to make Hong Kong a free shipping area. Consumers can enjoy free shipping benefits on Taobao platform for products with the 'HK¥99 free shipping' tag.

Meanwhile, besides offering free shipping, Taobao will also introduce cross-border return services. Consumers only need to return the goods to local points in Hong Kong.

JD.com is not falling behind either. Almost at the same time as Taobao, it announced an initial investment of 1.5 billion RMB in the Hong Kong market, with no limit on long-term expenses.

Targeting consumers in Hong Kong, JD.com has launched its self-operated free door-to-door delivery service for purchases over 299 RMB (free shipping up to 10KG), regardless of time period or product category. At the same time, JD.com has also introduced a 'one-item free shipping' section for various categories of goods, including small appliances, fast-moving consumer goods, convenience foods, home furnishings, automotive parts, and many products from JD.com's own brand JingZao which all support free shipping for one item.

With the three major e-commerce platforms coincidentally choosing to compete in the Hong Kong market, Cui Lili, a professor from the School of Digital Economy at Shanghai University of Finance and Economics and director of the Digital Commerce Research Center, told the Science and Technology Innovation Board Daily in an interview that extending the e-commerce battlefield further to the Chinese territories of Hong Kong and Macau will have room for growth due to the lower e-commerce penetration rate compared to mainland China.

In Cui Lili's view, although the overall size of the Hong Kong and Macau market is not particularly large compared to the mainland market, it is still a region with potential for development. With the increase of mainland talents going to Hong Kong, the market's acceptance level is also rising, showing strong market demand.

Logistics outflow to the sea

In Hong Kong, the convenience of courier services is gradually becoming one of the key factors influencing consumers' online shopping decisions.

"Is the express delivery convenient, and the postage and smooth ordering process are what I value most when shopping online." Li Yun (pseudonym), who has just completed an internship at a technology company in Hong Kong, told reporters from 'Star Market Daily' that he has been in Hong Kong for more than half a year, and has made a total of four online purchases, two of which were orders for materials for the company.

Hong Kong's logistics system is also facing unprecedented upgrade challenges.

Cui Lili, a professor in the Department of Digital Economics at Shanghai Finance University and director of the Digital Commerce Research Center, told reporters from 'Star Market Daily' that the logistics landing issues in the Hong Kong and Macau markets mainly involve multiple aspects such as the transit of goods, the labor cost of local logistics distribution, and the cost of network layout.

She believes that in order to improve logistics efficiency and tap into the potential of the Hong Kong and Macau markets, it is necessary to accurately calculate the cost generated by the landing points and the income brought by the penetration of the e-commerce market, and based on this, better layout and develop other business forms that can be carried out using this logistics network in the future.

Taking Cainiao as an example, it built the embryonic form of a global smart logistics backbone network eight years ago, fully connected with the national logistics hub strategy, and successively promoted the layout of eHub super hubs in places like Hong Kong, attempting to achieve '24 hours nationwide, 72 hours global delivery.'

"Cainiao's coverage of self-pickup points and lockers in Hong Kong has exceeded 95% now." Zhao Yiliang, head of Cainiao Group's cross-border logistics Hong Kong station, revealed to reporters from 'Star Market Daily' that Cainiao currently has over 1000 pickup points (including lockers) in Hong Kong. More than 450 Cainiao pickup points are open on Sundays and at night, greatly satisfying consumers' different time needs.

The dense network of pickup points undoubtedly brings real convenience to the residents of Hong Kong. Wang Yiyue, who has lived in Hong Kong for 7 years, deeply feels this change.

She told reporters from 'Star Market Daily' that during this year's Singles' Day sales, she has purchased goods worth over 9000 Hong Kong dollars on Taobao, all thanks to the policy of free shipping for orders over 99 Hong Kong dollars. Wang Yiyue recalled that she hardly shopped during last year's Singles' Day sales because the shopping process was cumbersome and the shipping costs were high. She had to contact a third-party consolidation warehouse herself, which took a long time and was inconvenient. Now, from placing the order to receiving it, it takes as little as 3 days, compared to a minimum of 5 days previously.

"Previously, the nearest consolidation warehouse to where she lived took 8 minutes, now the nearest self-pickup point is only 2 minutes away," said Wang Yiyue to the reporter.

JD.com Express is also actively expanding into the Hong Kong market. On the eve of singles' day sales, JD.com Express reached a strategic cooperation with Hongkong Post, jointly launching the Hongkong Post 'self-collection' service. This means that parcels delivered by JD.com Express to Hong Kong can be picked up at 119 local post offices and 162 intelligent post stations in Hong Kong, further broadening consumers' pickup choices.

Furthermore, JD.com Express has brought mainland China's standard services such as home delivery and nighttime delivery to Hong Kong. The delivery time can be extended to as late as 10 p.m., providing personalized delivery services for users who are inconvenient to receive during the day.

According to data disclosed by JD.com to Science and Technology Daily reporters, since the upgrade of express delivery services to Hong Kong and Macau a year ago, JD.com Express has seen a 24-fold increase in daily average parcel volume in Hong Kong, a 16-fold increase in cross-border parcel volume between mainland China and Hong Kong, and a 14-fold increase in daily average parcel volume to Macau, achieving double-digit growth in overall express business volume.