Guide for starting an online shop: steps, costs, business registration, and local success stories

Online shops have become more and more popular in Hong Kong. According to data analysis firms, the Hong Kong eCommerce sector is expected to reach approximately US$29 million by 2024, while online sales of the retail sector alone are expected to hit HK$42.1 billion in the fiscal year 2025/26. From the fiscal year 2021/22 to 2025/26, the share of online sales in the retail industry is expected to increase from 6.1% to 9% of total sales. These figures indicate that opening an online store has become a dominating choice in Hong Kong. This article offers insights into starting an online store, including the business registration process and choosing an eCommerce platform. 

What is an online shop?

An online store is a retail platform that operates 24/7 on the internet, free from time and location constraints. It offers a variety of payment options, including credit cards, electronic payments, and bank transfers. This model allows businesses to expand their reach both locally and internationally, lowering the barriers to entry for new entrepreneurs. Online retailers nowadays leverage analytical tools to understand consumer behaviour and trends, allowing them to implement improvements or promotions.

The emergence of online shops has transformed the conventional retail landscape. According to government statistics released in November 2024, online sales represented about 9% of total retail sales, equating to an estimated sales value of around HK$29 billion.

Regardless of whether the online shop operates through a self-hosted website, social media, or an eCommerce platform, any business selling goods or services online in Hong Kong is required to apply for business registration within one month of starting operations. The Inland Revenue Department will examine various aspects of the business, including procurement, marketing, sales, shipping, delivery, and payment processes, as well as the scale and location of operations, to determine whether the business is functioning within Hong Kong.

Benefits of opening an online shop vs. a physical shop

Steps to launch an online shop

1. Select your products

Those looking to start an online store may reflect on personal interests and expertise or  perform market surveys to identify products or services that have demand and competitive potential.

2. Identify sourcing options

Evaluate procurement expenses and product quality. Opt for trustworthy suppliers to ensure a reliable supply chain.

3. Register your business

Applying for business registration for an online store includes the following steps:

1. Fill out a business registration application form

2. Pay the required business registration fee and any applicable levies

3. Prepare necessary identification documents

4. Registration can be done online through the “eTAX” service or in person at the Business Registration Office in Kai Tak Inland Revenue Department, or by mailing to the Kowloon Bay Post Office

5. Finally, receive your business registration certificate

4. Select an eCommerce platform

Selecting an eCommerce platform is like choosing a prime location for a physical store. Before launching your shop, compare the functions, ease of use, pricing structures of different platforms, such as Amazon, eBay, Shopify, SHOPLINE, WooCommerce, and BigCommerce, etc.

5. Design the online shop layout and payment process

Once the platform is selected, focus on designing a website appearance that conforms with customer preferences to increase the website’s engagement rate and sales. It is also important to implement a reliable payment system to ensure secure transactions. Airwallex, a one-stop financial and remittance platform, can be integrated with different popular eCommerce platforms, offering a variety of payment methods including Visa, Mastercard, Apple Pay, Google Pay, WeChat Pay and Alipay. It helps to enrich the overall shopping experience for customers.

6. Work on logistics and shipping

Collaborate with reputable logistics service providers that offer reasonable shipping rates, high-quality packaging, and reliable tracking services to ensure timely and secure delivery of products to customers.

7. Promote your store

Develop effective marketing strategies. Enhance brand visibility with the use of social media, email marketing and search engine optimisation. Regularly evaluate the outcomes of promotional efforts and adapt strategies as needed.

Cost of launching an online shop

The costs of opening an online shop are usually lower than those of a physical store establishment. Entrepreneurs can either seek web design services or create accounts on major eCommerce platforms and social media sites. For self-managed online shops, common expenses include website development fees (such as purchasing a domain and hosting tool). Those utilising an eCommerce platform or social media must account for subscription fees, transaction fees, and online marketing costs. Discounts may be available initially, and the expense may range from several hundred to a few thousand Hong Kong dollars. There would also be product procurement costs, logistics and shipping fees, but overall, these costs remain significantly lower than those incurred when opening a physical store.

Common pitfalls and consideratioins for beginners launching an online store

Although ‌entry barriers to launching an online shop are minimal, achieving sustainability and continuous success poses significant challenges. Newcomers often underestimate the fierce competition in the market, overlooking the importance of branding and customer service. They may also fail to thoroughly understand their target audience and design a competitive pricing structure for their products. The belief that simply opening an online store will draw customers is a common fallacy. Effective marketing strategies are crucial.

Besides, newcomers should choose a platform that offers secure payment methods, efficient currency exchange service and competitive exchange rates. A platform that has the capability to continuously analyse business metrics for strategic adjustments should be prioritised as adaptability to market dynamics is key to success.

Success stories of famous online shops in Hong Kong

Jakewell: delights customers with a streamlined online shopping experience

Modern baby products retailer Jakewell leverages WhatsApp to send Payment Links designed by Airwallex to customers for secure payments. Airwallex supports over 160 international payment methods, including credit cards, Apple Pay, Google Pay, AlipayHK, WeChat Pay, and FPS, significantly improving customer satisfaction.

The company also benefits from Airwallex’s global account by receiving payments from a diverse customer base and making direct payments from multiple currency balances without incurring currency exchange fees, saving over 90% on foreign transaction costs.

Gram(28): stimulates sales growth by offering BNPL on their online store

Grams(28) is a Hong Kong eCommerce brand that specialises in high-quality Italian leather goods. The brand operates across Hong Kong, Europe, the United States, and Singapore and often encounters challenges in setting up “Buy Now, Pay Later” transactions in different markets. Issues also stem from currency exchange rate volatility and international transaction fees. To address the above challenges, Grams (28) adopted multiple functions provided by Airwallex, including its “Buy Now, Pay Later” (BNPL) solution through Klarna, Global Account, and Borderless Visa Card. The integration of the Klarna plugin into their eCommerce platform was completed within a week, enabling a smooth BNPL experience. The company has also simplified its account reconciliation process by managing multiple currencies, including USD, EUR, SGD, and HKD, through Airwallex’s platform.

Integrating Airwallex for one-stop payment management

Integrating Airwallex with your eCommerce platform allows you to manage your payments effortlessly, without any programming requirements. With Airwallex Checkout, you can accept payments from more than 180 countries and offer over 160 payment options, including major credit cards, FPS, WeChat Pay, AliPay, and BNPL services through Klarna. It helps to enhance your checkout conversion rates. By utilising Payment Links, you can easily share payment options with customers through social media or email and monitor transactions in real time.

Both functions facilitate receiving payments in the customer’s preferred currency. The funds can be credited to your Airwallex multi-currency Global Account, eliminating the need for currency conversion.

Besides, when processing payments to suppliers, advertisers, or software subscription service providers, you can use Airwallex’s multi-currency Visa card to earn an unlimited 1% cash rebate*. This card incurs no annual fees, supports various currencies, and features $0 foreign transaction fees. Since all transactions are processed from the business’s multi-currency account, there is no need for currency exchange, allowing you to settle payments in the local currency, and hence, save costs for your business.

*T&Cs apply.

Frequently asked questions

1. Is it necessary to report taxes when starting an online shop?

Yes. Under Hong Kong’s tax laws, anyone engaged in trade, professions or businesses within the SAR and earning profits from activities conducted in Hong Kong is obligated to pay profit tax. That means, establishing an online shop entails tax reporting. The Inland Revenue Department will further determine the necessity of paying profit tax.

2. Do I need to register my online shop as a business?

Yes. Whether through a self-operated website, social media, or eCommerce platform, if you are selling products or offering services in Hong Kong, you must apply for business registration within one month of starting your operations.