Special interview
Written by: Kwong Yueting
2021-01-11 08:00
Last update date: 2021-01-11 11:29
In the past year, the housing economy has risen and online shopping has become a part of many people's lives. With the large-scale COVID-19 vaccination program carried out in many countries around the world, it seems that the epidemic will gradually be controlled. Can the e-commerce market continue to maintain high growth in the future?
In an interview with "Hong Kong 01", Frankie Ng, the market leader of Canada’s highest market value company and e-commerce store opening platform Shopify in Hong Kong and Taiwan, said that if the vaccine can be applied on a large scale, all industries are expected to gradually recover, especially the tourism industry. , Hotel industry and retail industry, but believe that after the epidemic, e-commerce will not disappear.
He estimated that merchants will use O2O (online and offline) strategies to develop their businesses in order to play a complementary role, because the online store operates 24 hours a day, and it avoids rent and manpower costs, and can expand the business. The physical store can provide guests with more shopping experience.
Shopify mainly assists small and medium-sized enterprises to establish online stores and provide operational services. The platform has more than 1 million merchants.
(Shopify Facebook page picture)
Shopify was founded in 2006 and is headquartered in Ottwa, Canada. It is an online store platform for cloud online stores and retail point-of-sale systems. It serves 1 million merchants in more than 175 countries and regions. After listing in 2015, the stock price has skyrocketed. The latest closing price is US$1,188.92, which is 68.9 times higher than the IPO price of US$17 per share. The current market value exceeds US$145 billion, making it the largest listed company in Canada by market value.
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Affordable monthly fees attract SMEs
As an e-commerce store opening platform, merchants can set up e-commerce websites through Shopify for multi-channel sales, inventory management, delivery services, marketing, establishment of membership systems and points, provide AR or VR shopping experience, sales data analysis, etc., and contact To buyers from all over the world.
At present, Shopify mainly provides three monthly fee plans, which are 29 yuan, 79 yuan and 299 yuan (USD ‧ the same below); the company also designs the highest-level ordering service Shopify Plus for large merchants, and the monthly fee starts at 2,000 yuan.
Wu Dairong said that for companies, the cost of opening their own online store is high. It is estimated that at least 200,000 yuan will be required, and additional staff must be hired to develop, manage and maintain the website regularly. The company’s most common monthly plan is only 29 yuan, which is cheap. The price provides a more comprehensive service, attracting many small and medium enterprises to use the platform.
At present, more than half of the customers on the platform are SMEs. The main categories include: fashion and apparel, electronic products and health and beauty industries. There are also some well-known local brands as their customers, including Nestlé, Lan Kwai Fong Group, OnTheList, etc.
In addition, Shopify has an App store (app store), just like the app store in a mobile phone, merchants can choose the Apps they need for free or payment purchases, adding more functions to the online store.
There are more than 5,300 apps in Shopify's App store, and the categories include: store design, marketing, message push tools, translation software, etc.
(Photo by Huang Shuhui)
Own online shop to help "margin" customers
There are many online store platform "giants" on the market. When asked about the benefits of opening a store on Shopify, Wu Dairong believes that online stores such as Amazon and Taobao are like a marketplace. When customers search for a product, these platforms The price and detailed information of the same product at different businesses will be displayed, and other similar products will be recommended to customers, and customers have the opportunity to go to other stores.
In addition, merchants can even pay to rank their products higher in the search results. This makes it more difficult for SMEs with smaller advertising budgets to do business, while Shopify allows merchants to establish their own online stores to cultivate more More loyal customers.
The epidemic has promoted the pace of corporate digital transformation, and Shopify's business has been able to grow against the market. As of the end of September last year, the company's third-quarter revenue increased by 96% year-on-year to US$767 million.
Wu Dairong said frankly that in the past, many small and medium-sized enterprises may not necessarily want to do e-commerce business, or think that it is very complicated to do online shopping platforms. During the epidemic, they will take the initiative to find companies, hoping to develop online shopping business. "We originally planned to do the plan in 2023. Do it!"
Compared with China, the United Kingdom and the United States, the development of Hong Kong's online shopping market is still relatively slow.
He cited data to estimate that the current Hong Kong e-commerce market’s overall retail penetration rate is only 12 to 14% (source: GlobalData), China’s is 16% (source: eMarketer, China eCommerce 2020), and the United States is 32.4% (source: eMarketer, China eCommerce 2020). Source: eMarketer, October 2020), so I believe that with the increasing popularity of online shopping, Hong Kong's online shopping market still has good room for development in the future.
However, Hong Kong is small and densely populated. It is quite convenient for citizens to shop, which will hinder their desire to shop online. In addition, after shopping on most online platforms, it takes 2 to 3 days to receive the goods, which is difficult to satisfy the public’s immediate needs. So he suggested that local e-commerce platforms should improve logistics efficiency.
"Amazon Prime delivers within one day across the United States. China may place an order in the morning and receive the goods in the afternoon. If you have to wait so long, citizens would rather go out and buy by themselves.
Competition in the e-commerce world is fierce. Wu Dairong said with a smile that he welcomes competition. More competition will benefit the healthy development of the e-commerce market.
(Photo by Huang Shuhui)
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Call on merchants to be flexible and pay more attention to holiday business opportunities
Shopify is regarded as the main competitor of Amazon by the outside world. Wu Dairong said frankly that the e-commerce platform "must have competition," but the company will not pay too much attention to what its opponents do, and only hope to do its business well.
In fact, Shopify supports Amazon, Facebook, Instagram and other sales channels, hoping to provide sellers with more choices and let consumers choose which platform to shop on.
He continued that when Hong Kong people shop online, they will go to different platforms to check prices before placing orders. They will also use consolidation to save shipping costs. They are more cost-conscious consumers.
Hong Kong’s economic prospects are not good, and people’s consumer desires continue to be sluggish. Wu Dairong suggested that merchants should adjust their business strategies according to market conditions and pay attention to holiday business opportunities. Because of the economic downturn, people tend to save on daily expenses and delay consumption. "Big Time and Big Festival" will only buy when the price is reduced; many merchants will extend the holiday promotion date in order to do more business, but on weekdays, they will not offer too much discount.
"The most important thing for merchants is to maintain an open attitude, so that they can make good use of the ever-changing environment and be flexible. Perhaps the epidemic last year made the environment a little more difficult, but this year may have a new look."
E-commerce platform Shopify