HKTV Mall has achieved the highest monthly turnover of its six-year history in the wake of the coronavirus crisis.
In a personal post on social media, HKTV Mall CEO Ricky Wong said the e-commerce company achieved sales of HKD482 million (US$62 million) last month, compared with HKD179 million ($23 million) in February last year.
As Hongkongers choose to self-isolate and avoid crowds, constantly rising demand for daily essential supplies is fuelling a new wave of online shopping in the territory. Orders have surged year on year from an average of 12,300 a day to 32,600.
During the initial days of the coronavirus outbreak in January, the epidemic sparked momentum for online shopping with HKTVmall experiencing a 64.7-per-cent uptick in its average orders to 22,400 a day. However, customers were met with prolonged waiting times for both end-to-end delivery and self pick-up, which prompted the retailer to expand its click-&-collect network to more than 100 additional locations in partnerships with various retail chains. This included HKTV Mall’s own O2O shops, its mobile pick-up trucks and other merchants’ pick-up points across the city.
In a LinkedIn post, Wong said the company’s recent success was attributable to its ability to adapt during moments of crisis and said he hopes “all retailers in Hong Kong will take this opportunity to change their mindset and mode of operation to make more use of technology to alleviate pressure from landlords”.
HKTV Mall now reigns as the top local operator in the market, despite facing tough competition with Alibaba and JD.com in the past, as local consumers favored cross-border shopping due to its low pricing. And, since the protest movement began last year, many locals have opted to boycott China businesses helping HKTV Mall to rise through the ranks. Wong’s pro-democratic stance helped the brand as well.
HKTV Mall was one of the first local companies to source surgical masks as the city faced shortages early on in the coronavirus crisis. Wong bought a face mask machine at his own expense, paying four times its normal cost at US$200,000 (HK$1.56 million) and sourcing raw materials from a supplier in Taiwan in order to produce more than 1 million masks in just 30 days.
The empathy the retailer showed towards Hong Kongers has since earned the brand top spot among local consumers on YouGov’s Brand Index, reflecting positive affiliation.
Hong Kong has always been slow to adopt e-commerce given the city’s compact nature, rendering online shopping unnecessary, to say the least. Revenue from e-commerce only makes up 11 percent of Hong Kong’s total retail spend (SCMP, 2018) and only a quarter of Hong Kongers shop online (eShopworld, 2018) despite a high internet penetration. However, there is good growth potential in the digital space as it is forecast to expand at a CAGR of 10.2 percent by 2021 (China Daily, 2017).
The epidemic has propelled changes in consumer behavior and accelerated adoption, although has left many single-channel retailers under pressure due to the absence of a digital presence. However retailers has been alert and responsive to the opportunity as we’ve witnessed many partnerships come to fruition between online platforms and local merchants to achieve quick turnarounds, such as Pandamart’s 15-minute deliveries with local traders, and ticketing system The Gulu, partnering with Sasa and Japan Home Centre in the distribution of masks.
