Top e-commerce players saw decent results despite modest Double 11 sales growth amid a crowded promotional calendar Pinduoduo's revenue growth outpaces Alibaba and JD.com, driving the recovery of China's e-commerce Alibaba responded to Pinduoduo's strong performance by switching to the 'Year-End Good Price' festival focused on 'low price strategy’ China's e-commerce sector displayed resilience, with an 11% year-on-year (YoY) surge in online retail sales during the first 11 months of 2023, surpassing the 6.1% growth recorded in 2022. While partly influenced by the low base effect, it signifies sector recovery, bolstered by a series of policies supporting consumer spending. Meanwhile, parcel deliveries in China reached a record 120 billion items on 5 December 2023, marking an 8.5% increase from 110.6 billion parcels in 2022. This highlights the e-commerce sector's growth, with consumer confidence trending upwards despite economic uncertainty. Double 11 sales saw a modest increase China has experienced a surge in extensive online shopping festivals, including the world’s largest event, Double 11, as well as 618 and Double 12 shopping festivals. The e-commerce market is also witnessing livestreaming platforms gaining a larger share, with sales surging by 59% YoY in the first 10 months of 2023, constituting 18% of all online retail. Strong business fundamentals fuel growth Hong Kong has long been a leader in the traditional finance world and has successfully transitioned into a hotspot for local and international fintechs. This transformation is driven by a digital-first population, a favourable funding environment, and strong fundamentals to fuel business growth. Hong Kong’s attractive fiscal policies, with corporation taxes set at an extremely appealing 16.5%, require only 8.25% payable on a company’s first $2 million. The government has furthered its commitment to specific industries by launching the Fintech 2025 strategy to promote fintech development in the city. Hong Kong’s Monetary Authority (HKMA) also introduced a regulatory sandbox that fosters innovation while ensuring consumer protection. Potential roadblocks to growth The city’s finance industry is currently experiencing a squeeze on the supply of specialised talent, causing retention issues for the fintech and banking industries. The Hong Kong government is taking a supportive stance, promoting the upskilling of existing employees and increasing graduate programmes to bridge the talent gap. The finance secretary announced an 80% rebate on training costs for financial certifications, marking a strong initial step in solving the talent shortage. Hong Kong faces barriers in attracting foreign talent, primarily due to systemic high costs that reduce the city’s attractiveness to expatriates. However, there is a silver lining on the horizon, with the house prices in Hong Kong experiencing an 8.95% drop in May from a year earlier, easing affordability concerns amid high inflation. Hong Kong’s status as a leading global tech hub is no coincidence, resulting from a digital-first population, strong support for entrepreneurship and enduring business fundamentals. Therefore, it’s hardly surprising that the city is also making waves in fintech, providing extensive funding, sandboxes, and support for the ecosystem. Although there are roadblocks in the way, Hong Kong is taking the right steps to reach success. Abe Smith is theco-CEO of Paymentology, a global processor with innovative features. Top e-commerce players saw decent results despite modest Double 11 sales growth amid a crowded promotional calendar
