Alibaba and JD.com are taking the e-commerce battle to Hong Kong as the mainland China market matures

Hong Kong has become a new battleground for Chinese e-commerce giants Alibaba Group Holding and JD.com as they look for new growth opportunities in the face of fierce competition on the mainland.

The two companies announced major investments in the Hong Kong market last week, waiving delivery fees on some orders and improving related services such as returns of local products.

Alibaba, for example, said it would invest 1 billion yuan ($142 million) to improve the offerings of its online retail platform Taobao in Hong Kong as part of a campaign to offer free shipping on orders over 99 yuan to one of its more than 800 company-owned stores. pickup stations in the city. Alibaba owns the South China Morning Post.

Separately, JD.com announced it will spend 1.5 billion yuan to roll out new services in Hong Kong, including free door-to-door delivery on certain orders over 299 yuan.

“Hong Kong’s proximity and connectivity to the mainland, combined with its relatively low e-commerce penetration rate, make it a very attractive growth market,” said Jacob Cooke, CEO of WPIC Marketing + Technologies, an e-commerce and technology consulting firm.

E-commerce in Hong Kong is less advanced than in many other developed markets, due in part to the convenience of the city’s tight-knit network of brick-and-mortar retail stores, as well as higher wages for delivery and logistics workers.