It's all a digital game in trade

As the world trade paradigm falls in line with a revolutionary trend in doing business, Hong Kong is reassessing its traditional dominance of Asia's shipping lanes by positioning itself as an e-commerce logistics nexus between Southeast Asia's digital shoppers and the Chinese mainland's manufacturing prowess.

The transformation comes at a critical juncture, with ocean transport's share of Hong Kong's exports having shrunk from 22.8 percent to 12.7 percent in the decade through 2022. Industry experts think it's time for the city to reinvigorate its standing as a logistics hub by capitalizing on its geographical strengths and growing international trade ties.

Although e-commerce logistics may not help Hong Kong's port cargo throughput significantly, the special administrative region should "look beyond its previous success for a new growth direction based on inherent advantages", says lawmaker Ambrose Lam San-keung.

This is where Hong Kong's geographic alchemy comes into play. Within a five-hour flight, local business operators are able to reach half of the world's population and its most dynamic consumer markets. Such proximity, along with a low tax-rate regime and efficient air links, is the answer to a brewing e-commerce challenge — the need for rapid, cost-effective delivery of goods to Asian consumers, says Lam.

For Western retailers struggling to cope with the woes of shipping directly to Asian customers — sea freight at a snail's pace and exorbitant air cargo costs — Hong Kong is playing a pivotal role. "Companies can warehouse their goods here and meet orders from the region within days rather than weeks," Lam notes.

Strong business data underpin Hong Kong's potential to be an e-commerce logistics center. The Association of Southeast Asian Nations has been the city's second-largest trading partner for over a decade, with bilateral trade reaching $145 billion last year, while the 10-member bloc's e-commerce market is set to see a sharp rise from $159 billion this year to $370 billion by 2030, according to the Hong Kong General Chamber of Commerce.