After speaking with a variety of industry professionals operating ecommerce businesses in China, Thailand, the Philippines and Vietnam, trust makes its way into each conversation. Customers don’t trust merchants, business owners are weary of government power, citizens don’t trust banks, so on and so forth.  

eIQ spoke with Joseph Yuen, the Board Chairman of The Hong Kong Federation of Ecommerce (HKFEC), at Last Mile Fulfillment Asia to understand his ambitions to standardize ecommerce regulations.

The federation composes of members from Lazada, UnionPay, PwC, Shopline, etc. and exists to bridge the ecommerce associations between Europe, Russia, Dubai, and Thailand to create a stable foundation for future ecommerce businesses to land on.

“Governments didn’t have any laws in place that could govern new technology such as Uber,” says Joseph. “This shows that governments need to work with organizations like ours to fill in  gaps between booming industries and out of date regulations.”

Creating trust in a trustless Asia

It’s not surprising to learn that Southeast Asians have doubts about product reliability and safety of payment methods when news about counterfeits and financial fraud hang in daily headlines.

Reasons why consumers in Hong Kong do not shop online. Source: Consumer Council 2015

One of the initiatives HKFEC is moving towards is the creation of a “Hong Kong Trust Mark”. Much like food labels in the US – USDA Organic, Non-GMO Project Verified, etc. – ecommerce sites would have to be vetted before being granted a badge that certifies them as trustable for customers to shop.

Companies that meet all criteria agree to work with HKFEC to provide customers with a safe and reliable shopping experience.

If a sold product doesn’t meet guidelines, the idea is that the customer has the right to an investigation and refund – even if that means going to court.

“There’s been a lot of talk but no action,” comments Joseph. “We want to assume that every one is a good player so HKFEC will act as the middleman to clear this black hole and make ecommerce transparent.”

Ecommerce requires standardization

Joseph believes that there are four major areas that need to be addressed in order for ecommerce to grow healthily in Hong Kong and China.

  1. Trust – Chinese citizens fear that all online goods are counterfeit items
  2. Payments – simplified, cashless payments open up opportunities for hackers
  3. Privacy – smart data versus big data, how can businesses use their data to grow?
  4. Cross border – tax policies differ across markets, how can we align the cross-border policies?

Hong Kong, a country of over 7 million people, is an important transit point between vendors and Chinese consumers as a free port. The French Chamber in Hong Kong quotes it as “suitable for low-volume B2C ecommerce, goods for personal consumption with low cargo value and low tax rate items”.

The Trust Mark sounds good in theory, an online business gains the badge after a thorough investigation by HKFEC, customers identify badge on site and are more willing to shop knowing they will be protected. The main question then becomes, how long will this take?

Ecommerce companies in all parts of the world, especially Asia, are already moving quickly to grab market share. Consumers aren’t familiar with any badges or certifications that aim to protect them so education would also add time to the process.

“Our committee has legislative influence to give us a line to the government,” says Joseph. “The one thing that will get them acting is social pressure from our friendly alliances. We will act as the judge.”

“Guandong Electronic Commerce Association, Russia, India, Europe and the UAE are all invested in making the Trust Mark a reality.”

The effects of the Trust Mark

Joseph believes luxury brands are weary of selling online in Asian markets because customers, especially the Chinese, prefer to fly abroad to purchase goods they know are real. The goal is to keep the business within the country.

“The government should facilitate access to financing sources and terms in order to enhance competitiveness of local ecommerce operators,” said Pawoot Pongvitayapanu, president of the Thai Ecommerce Association and ASEAN Market Advisor of HKFEC.

If the badge were to come into effect, HKFEC hopes to see an increase in cross-border trade and growth in the trend. For example, companies would be less concerned about damaging their brands and sell on platforms like Tmall to reach Chinese customers if it was certified. Or they would open their own webstores to sell directly to customers.

“In every single fast moving industry, regulations and government cannot catch up,” says Joseph. “Someone has to stand in front of the court as an alliance and agree on a set of rules before standardization can happen.”

By: Cynthia Luo

Hong Kong tackles online counterfeit products with the launch of the ‘Hong Kong Trust Mark’ electronic logo, reports Enterprise Innovation.

Small and medium enterprises are expected to benefit from the initiative, launched by the Hong Kong Federation of ecommerce. Hong Kong’s retail industry offers a wide variety of goods and services. However, due to the rampant selling of fake goods online, a lot of consumers feel reluctant of buying goods on the internet.

The Hong Kong Trust Mark is recognized by the ‘Belt And Road Ecommerce Strategic Alliance’, including the Thailand ecommerce association.

A trust mark will improve confidence of new customers in purchasing from unfamiliar websites, including a guarantee against the risk of fraud and non-payment.

Pawoot Pongvitayapanu, founder of and President of the Thai Ecommerce Association comments, “For a healthy growth of ecommerce in Thailand and surrounding countries, a well developed trust system is necessary. Our association will give full support to this Trust Mark in the ASEAN market.”

The scheme could build a trust worthy image for Hong Kong’s online trading platforms. The Trust Mark will also provide a channel for complaints and legal consultations. Meanwhile, HKFEC will actively communicate with local government and organizations to make Hong Kong a better place for ecommerce.

HKFEC will aggressively promote the “Hong Kong Trust Mark” and encourage more online retailers to participate. It will also raise awareness regarding IP rights.

Those who obtained the Trust Mark would be authorized to post the electronic logo of the “Hong Kong Trust Mark” issued by HKFEC on their website and linked to a given webpage. Online consumers can click the “Hong Kong Trust Mark” logo on the approved website to review the details and status of that particular site.

Following Alibaba’s various initiatives at battling counterfeit, more ecommerce organizations are stepping up to battle fake goods to better the ecommerce landscape for consumers.

A version of this appeared in Enterprise Innovation on August 18. Read the full version here.