June 15, 2024

Tricia Oak

Business & Finance Excellency

Hong Kong e-commerce start-up Zirkol aims to compete with the city’s damp marketplaces on selling price

An e-commerce start-up in Hong Kong that observed downloads surge during the city’s fifth wave of Covid-19 infections is hoping to retain end users by giving merchandise more affordable than those sold at neighborhood wet markets, as additional people today in the town start out to store online through the pandemic.

Shopping application Zirkol, founded in July 2020, saw its weekly get quantities jump 500 for each cent in the second week of March, according to founder and CEO Samson Ho. On March 2, Zirkol was the second most downloaded searching app on Hong Kong’s iOS application store.

The surge in downloads and orders came amid panic obtaining in Hong Kong before in the month, when marketplaces and suppliers were stripped of contemporary food and groceries about fears of a probable substantial-scale lockdown.

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“We had been actually fast paced [trying] to deal with and fulfil all the orders,” Ho mentioned in an job interview with the Submit, including that 20 for each cent of his employees were out ill when orders enhanced by 5 occasions. “It was a nightmare.”

E-commerce adoption has generally been weaker in Hong Kong than in many other developed markets, many thanks to the benefit and accessibility of the city’s network of bricks-and-mortar retail retailers.

In 2019, on-line retail profits accounted for only 5.7 for every cent of overall retail, compared to 10.8 per cent in the US and 34.1 for each cent in China, in accordance to a report posted in 2020 by the research place of work of the Legislative Council, the city’s legislature.

But like in other places, on line purchasing in Hong Kong was offered a enhance by the Covid-19 pandemic. The US Intercontinental Trade Administration estimates that e-commerce gross sales in Hong Kong grew 27 for every cent in 2020, and that 50 per cent of buyers now favor on the web procuring.

In February this year, online retail created up 10.8 for each cent of overall retail income, according to facts revealed by the town government’s Census and Stats Division.

Zirkol is now seeing much less downloads now that panic obtaining has subsided in Hong Kong, position at under 70 on the city’s iOS purchasing classification. On the other hand, the company thinks it will be in a position to hold onto end users it received around immediately after the Covid-19 scenario eases for the reason that it sources goods instantly, enabling it to give decrease prices, according to Ho.

“If you want to acquire choy sum or pork chop from a damp sector, there are commonly 6 layers of middlemen, together with farms, exporters, importers, wholesalers, distributors and stores,” Ho stated. “We only hook up farms and buyers.”

On Saturday, Zirkol was presenting choy sum, a leafy vegetable popular in Hong Kong, at HK$8.9 (US$1.13) for every 300g, when the exact same quantity cost above HK$10 at some soaked marketplaces.

According to Ho, Zirkol now has over 100,000 relatives users, which the enterprise defines as range of unique residential addresses that made at the very least one buy in the time period. The platform is supplying a lot more than 1 million unique food items to these spouse and children end users every single month, Ho explained.

Zirkol is a unit of Aigniter Holdings Confined, which operates the Jarvix Shell out payment assistance and a logistics enterprise termed Jumppoint. Utilizing an in-property supply community also allows Zirkol lower costs, Ho mentioned.

In January, Aigniter lifted far more than US$5 million from buyers like Mindworks Money, Chinachem Group, Headline Asia and the Hong Kong government’s Innovation and Technologies Venture Fund.

Hong Kong shoppers check out a HKTVMall bodily outlet in the town. Image: SCMP / Dickson Lee alt=Hong Kong shoppers take a look at a HKTVMall physical outlet in the city. Photograph: SCMP / Dickson Lee>

Zirkol faces an uphill struggle in grabbing marketplace share from current e-commerce leaders in the metropolis. HKTVMall, Hong Kong’s most important procuring application, features additional than a person million distinctive shoppers in a town of 7.69 million. The selection of exclusive consumers at HKTVMall enhanced 16.3 per cent in 2021 to 1,287,000, from 1,107,000 in 2020, in accordance to the Hong Kong-stated company’s yearly final results revealed March 30.

Even so, Ho mentioned Zirkol does not aim to contend with purchasing applications these types of as HKTVMall, which make money by amassing system costs from stores, who offer you merchandise at regular retail charges. HKTVMall founder Ricky Wong Wai-kay called the purchasing web site an “on-line landlord” in a May well 2021 job interview with Forbes.

HKTVMall described a internet gain of HK$14.3 million in 2021, the 2nd year the company turned profitable, down from HK$183.6 million in 2020. The company attributed the drop to the absence of usage subsidies provided out by the city governing administration in 2020, and to its fees from promotional coupon codes released “in response to intense level of competition in the retail market place”.

Instead, Ho mentioned Zirkol aims to contend with offline retail outlets, such as soaked marketplaces and ParknShops, 1 of the city’s two most significant supermarket chains.

“Populace density is superior in Hong Kong and the retail sector performs very properly,” Ho said. “So we don’t intention to remedy the comfort problem … We concentration on saving funds.”

This report initially appeared in the South China Early morning Publish (SCMP), the most authoritative voice reporting on China and Asia for far more than a century. For additional SCMP tales, please explore the SCMP app or go to the SCMP’s Facebook and Twitter web pages. Copyright © 2022 South China Early morning Publish Publishers Ltd. All legal rights reserved.

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