HKTVmall profit drops amid fierce compeition in HK's eCommerce market

Hong Kong Technology Venture Company, operator of eCommerce platform HKTVmall, recorded a profit of HK$14.3 million for the financial year of 2021. The platform is also planning to launch a project to shorten the delivery lead time for customer orders, sustaining its position in the city.

In its annual results for the year ended on 31 December 2021, the company said its net profit for 2021 amounted to HK$14.3 million from HK$183.6 million in 2020. The decrease in profit was due to the HK$86.6 million promotional coupon expenses incurred for the launch of the $350/$500 eGift voucher programme in response to the fierce competition in the retail market; and a one-off non-recurring government subsidy of approximately HK$70.9 million received in 2020. The Hong Kong government did not offer any subsidies last year.

Last year, the company's gross merchandise volume achieved 10.4% growth, reaching HK$6,573.1 million (2020: HK$5,953.7 million). Average daily orders increased to 41,400 orders per day in December 2021 (December 2020: 36,300 orders per day), with the average order value decreasing to about HK$462 in 2021 (2020: approximately HK$504).

The number of unique customers who made purchases at HKTVmall increased by 16.3% in 2021 to 1,287,000 from 1,107,000 in 2020.

Chairman Paul Cheung and vice chairman Ricky Wong said, "The success that HKTVmall attained in 2021 mainly means that over the past year, more retailers and brand authorised dealers in Hong Kong recognised that they need a platform like HKTVmall to expand their online business. We provide the perfect one-stop solution ranging from sales, warehousing, last-mile delivery, to settlement and after sales services."

Speaking of HKTVmall's position in the Hong Kong market, they added, "If we call HKTVmall the leader in online retailing in Hong Kong, this does not imply that customers have no other choices. In fact, there are lots of choices available online for consumers. We are indeed referring to the fact that retailers and brand authorised dealers have no better choices for 'online shopping mall' in Hong Kong."

To further enhance and complete its fulfilment service, the company said it will launch an important project in two phases by the end of 1H2022 and 1H2023. The aim is to shorten the delivery lead time for customer orders. In phase one, the order cutoff time will be changed from 9am each day to 1pm, meaning that customers placing orders before 1pm will receive their purchases on the next day. The target for phase two is to enable goods to be delivered to customers the next morning so long as the order is placed before midnight. To achieve this target, HKTVmall said it must be able to provide third party logistics services.

When it comes to foreign expansion plans, the company said it had completed the installation for the first “Fully Automated Retail Store” with a pilot run in software and hardware in full swing. The first store will be launched in Manchester this year as planned. The local office, workshop and warehouse are under set-up and the local operation team is also under forming.

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