Online shopping offering opportunities
Updated: 2014-05-19 07:40
By Eddy Li(HK Edition)
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Smart phones, cellular networks and cloud technology are allowing people to enjoy a more convenient way of life. Communication is so much easier - and all kinds of information are now at your "fingertips". Shopping is also being transformed by new technology. Online shopping is surpassing traditional ways of buying goods. Indeed, it is fast becoming an indispensable part of people's lives.
Not long ago, an online bookstore in Taiwan announced it was cooperating with Hong Kong's 7-11 convenience stores to provide a new service. Customers could now order books online and pick them up at selected 7-11 stores the next day. This is just another example showing that Internet shopping will be the mainstream method of shopping in future.
As a businessman, I am always looking for opportunities arising from new trends.
Recently, I met friends to talk about the economic situation in Hong Kong. We discussed whether it was the right time to purchase real estate - as the over-heated market has cooled a bit. I believe recent measures - extra stamp duties for non-Hong Kong permanent residents and for those buying property for investment or speculation - will help residential property prices to ease.
The price of commercial property is still high. But the overwhelming tendency of online shopping will eventually turn retail stores into product showrooms. That is to say, when online shopping becomes more competitive in future, people are likely to test products in showrooms (retail stores) and purchase things via the internet (virtual stores). This is because online shopping usually provides discounts and delivery services. Therefore, investing in commercial property is riskier than in the past.
Convenience stores are a good choice for businesses with a small amount of capital. Many of them - other than traditional retail businesses - now collaborate with shopping websites and provide pick-up services for buyers. This is a market with considerable long-term potential. However, due to the limited space of convenience stores, the service is restricted to a small amount of goods for immediate pick-up.
With the growing popularity of online shopping, more space for storing and distributing goods is greatly needed. In this regard, warehouses are a promising investment. Industrial buildings are more suitable than commercial ones. Compared to commercial buildings, the rentals and prices of industrial buildings are much cheaper. The loading and unloading of goods is also more convenient. Moreover, online shoppers prefer flexible pick-up times and convenient locations rather than just the fine appearance of a building. This will turn units in industrial buildings into storing, distributing and pick-up centers for internet shopping. It will also allow people to avoid spending money decorating stores. Investors will only have to guarantee normal operations, saving a lot of money compared with the costs involved in developing traditional commercial stores.
Online shopping has brought new opportunities to all industries. The government is strengthening supervision over electronic transactions. After-sales services are also developing. It is likely the number of online consumers will keep increasing at a rapid rate. We should pay careful attention to this and seize the opportunities it offers.
The author is vice-president of the Chinese Manufacturers' Association of Hong Kong.
(HK Edition 05/19/2014 page9)