Minimum Startup Cost, Infinite Market Coverage

Secrets of Online Business Success

For computer fans and those who are interested in IT gadgets, hkgolden.com is definitely a favorite website on which they would spend hours lingering. With a huge user base, the site has won numerous industry awards including the Hong Kong ICT Award 2009, The Best Lifestyle Award – Online Social Platform Gold Award and one of Hong Kong Top Ten Technology Brands Online Discussion Channels. While many others failed when the dotcom bubble burst in 2000, the SARS attacked in 2003, and some others cannot make it through the rapidly changing market during the past years, hkgolden.com remains a successful website celebrated by many Hong Kong people as well as mainlanders.

The Making of hkgolden.com Revealed

Even though it is not as easy to get attention (and monetary support) from venture capitalists now as compared to the dotcom era, entrepreneurs are still looking positively towards e-business startups due to the overwhelming trend of internet technologies on the one hand, and low startup cost, global coverage on the other. A commonly interested issue will be the knowledge to build a good site and the secrets to attract so many users. A professional seminar focused on the above topic was held on 17 Nov 2010 by HKU SPACE. One of the founders of hkgolden.com, Mr. Arthur Wong, was invited to share his success story. The seminar was conducted in the interactive way of a discussion forum, with Mr. Vendeo Leung, lecturer of HKU SPACE taking the role as moderator. In a series of questions and answers, Arthur revealed every challenge and opportunities, and most importantly, his secrets to success in the making of hkgolden.com.

What May Seem Easy, Often is Not

An online shop may be the most common form in putting e-commerce to practice. This is easy to understand as many businessmen in Hong Kong possess the geographical advantage of gaining access to manufacture industry in the Mainland. To open an online shop takes only a few days, even shorter for the tech savvy. Online shop owners do not need to pay high rent, no need for shopkeepers and stock storage space; the shop in operation 24 hours a day, taking orders from virtually any place around the world.

It seems online retail is the perfect business model with minimum setup cost and infinite return. But Mr. Vendeo Leung reminded that before opening an online shop, one should also take into consideration the cost and feasibility of logistics seriously. Everything could be done online, but the transaction needs to be completed with physical delivery of the products after all. That is why costs and risks of different payment methods are important issues too.

How did hkgolden.com tackled these problems? Let us look closer at the history of development: Arthur and three of his friends were working in the IT department of major banks in Hong Kong, during the 1990's. Seeing that computer products buyers need to obtain quotations and compare prices by roaming computer malls in person, they decided to set up a website gathering product information and updated prices from computer retail shops in major shopping malls. The site was immediately a hit since launched, but the biggest climb in number of users occurred when a piece of step-by-step article teaching users to decode video streams of CableTV was published. The value lies in content, Arthur realized then, whether online or printed.

Content is the Real Value!

At that stage, web traffic was not a concern anymore. What they need to figure out was the source of income. Arthur and his partners tried to go back to traditional retail model by opening a retail outlet with a physical address, hoping to leverage on their existing network. But the endeavor was a failure since profit margin of computer products are too low to sustain the operation. Through trial and error, Arthur finally understood the online community enlivened by contents they provided is the true value behind everything and he managed to reach break-even point with the implementation of online advertising. The cooperation with Fevaworks, who subsequently acquired the website, was also made happen when hkgolden.com was transformed into an effective online promotion platform.

Passion, not Money, is the Ultimate Force Behind

As a conclusion of the seminar, Arthur spoke from the bottom of his heart, “The cost of starting an online business may be relatively low, but you should still make sure the operation is sustainable on its own even if break-even point came later than expected. We have indeed gone through one after another stage of hard-times before the arrival of success. It would even be harder to find your place in the highly competitive business environment nowadays. I believe the real secret to success is that you should make your decisions according to your abilities and personal interest, instead of just going after what's profitable.”