Alibaba, JD.com take e-commerce battle to Hong Kong as mainland China market matures

Hong Kong has become the new battleground for Chinese e-commerce giants Alibaba Group Holding and JD.com, as they search for new growth opportunities amid stiff competition on the mainland.

Both companies last week announced heavy investments into the Hong Kong market, waiving delivery fees for certain orders and boosting related services such as local product returns.

Alibaba, for instance, said it will invest 1 billion yuan (US$142 million) to boost its online retail platform Taobao’s offerings in Hong Kong, as part of a campaign to ship orders above 99 yuan for free to one of the more than 800 self pickup stations in the city. Alibaba owns the South China Morning Post.

Separately, JD.com announced that it will spend 1.5 billion yuan to roll out new services in Hong Kong, including free door-to-door deliveries for certain orders above 299 yuan.

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

E-commerce in Hong Kong is less advanced than many other developed markets, partly because of the convenience offered by the city’s compact network of bricks-and-mortar retail stores, as well as higher wages for delivery and logistics workers.