Published Feb 23, 2022

E-commerce Funding in Hong Kong: 3 Best Funding Options

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If you are an e-commerce business owner looking for funding in Hong Kong, your path is probably not smooth sailing.

Despite a promising outlook for the industry, e-commerce funding in Hong Kong remains scarce. 

Governmental support dedicated to e-commerce companies is few and far between. Institutional investors are generally reluctant to back these businesses financially.

Nevertheless, some government funding schemes can be used by e-commerce companies to facilitate their business growth. There is also non-governmental funding devoted to supporting e-commerce businesses.

This article rounds up the e-commerce funding options in Hong Kong, helping you grow and scale your business with less stress. Let’s get started!

1. SME Export Marketing Fund

The SME Export Marketing Fund (EMF) is set up with an aim to help small and medium enterprises (SMEs) expand their businesses outside of Hong Kong.

You can claim EMF funding for expenditure items spent on export promotion activities.


To apply for the SME Export Marketing Fund, your business must:

  • Be a non-listed enterprise registered in Hong Kong under the Business Registration Ordinance (Cap. 310);
  • Be a small and medium enterprise (i.e. less than 50 employees for non-manufacturing businesses, or less than 100 employees for manufacturing businesses); and
  • Have substantive business operations in Hong Kong at the time of making the application (i.e. funding is not available for shell businesses, or enterprises with main business operations outside of Hong Kong).

Funding scope

EMF funding can be used for a variety of purposes. For e-commerce businesses, below are some promotion activities which you could use EMF funding for:

1. Export promotion activities

Recipients of EMF funding could use it to cover the expenses of export promotion activities.

To be eligible for EMF funding, these activities must target markets outside of Hong Kong, and be conducted through electronic platforms or media.

Examples of export promotion activities include:

  • Placing advertisements (e.g. Google Ads and Facebook ads)
  • Performing keyword search
  • Listing product information
  • Setting up or enhancing online shop

2. Advertisements on trade publications

You could also use EMF funding for placing advertisements on trade publications. Similarly, these publications must target non-Hong Kong markets.

3. Setup or enhancement of website or mobile app

EMF funding can also be used for setting up or enhancing your corporate website or mobile application. Target markets of the website or app must be outside of Hong Kong.

Funding provided for this purpose is for covering non-recurrent fees only. For instance, you could apply for EMF to cover one-off setup fees for building your website on Shopify, Shopline, Wix, Squarespace or WooCommerce.

Recurring expenses, such as the following, will not be covered by EMF funding:

  • Fees for maintenance of the website or mobile app
  • Salaries of employees related to the daily operation of the website or mobile app
  • Commission paid based on sales volume

4. Online trade exhibitions

Online trade exhibition is another type of activity covered by EMF funding. To qualify as an online trade exhibition, the event must:

  • Display the products and/or services of participating exhibitors;
  • Be conducted on a proper electronic platform; and
  • Have a theme.

The online trade exhibition must also be organized by one or more of the following entities:

  • The Hong Kong Trade Development Council (HKTDC)
  • Government-related organizations
  • Non-profit distributing trade and industrial organizations 
  • Other reputable exhibition organizers with good track record

However, the following activities are not considered as online trade exhibitions: 

  • Online market promotion activities intended primarily for retail or meeting purposes
  • Livestreaming sales activities

Moreover, you will not qualify for EMF funding if your enterprise simply participates as a conference or seminar speaker in an online trade exhibition without having a paid online booth.

Funding amount

For each successful application, the maximum amount of EMF funding is 50% of the approved expenditure or HK$100,000, whichever is less.

Why apply for EMF funding?

If you are looking to grow your e-commerce business beyond Hong Kong borders, EMF funding will be helpful for supporting your company’s expansion.

Government statistics also show a high approval rate. As at February 2022, a total of some 315,000 EMF funding applications have been received, and around 260,000 applications (82%) were approved.

Limitations of EMF funding

It must be noted that each EMF application covers the expenses of one activity only. To obtain EMF funding for different activities, separate applications must be made.

Besides, there are heavy documentation and reporting requirements under the EMF funding scheme. Fulfilling these requirements could cost you a lot of time and money.

To give an example, if you want to claim EMF funding for setting up a corporate website, you will need to submit the following documents:

  • Written quotations obtained prior to the award of contract
  • Justification for not choosing the lowest conforming quotation (if applicable)
  • Contract for the setting up of the corporate website
  • Printout of the relevant webpages
  • Registration details of the website provided by the service provider for website hosting and domain name registrant
  • Final user acceptance test report on the website

The above is just an example list of documentation needed to obtain EMF funding for website setup. A comprehensive list can be found here. 

2. Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund)

Dedicated Fund on Branding, Upgrading and Domestic Sales is also known as the BUD Fund.

As its name suggests, the BUD fund covers three main areas: branding, upgrading and promoting sales. It supports Hong Kong enterprises in exploring and developing markets in the Mainland, FTA and IPPA economies.

Note: FTA stands for Free Trade Agreement, whereas IPPA refers to the Investment Promotion and Protection Agreement. A list of FTA and IPPA economies covered by the BUD Fund can be found on the BUD Fund’s website.


To apply for the BUD Fund, your business must:

The BUD fund is available to a wide range of enterprises. Businesses in both the manufacturing and service sectors can apply for the BUD Fund.

You can also apply for the BUD Fund even if you already have business operations in the Mainland, FTA or IPPA economies.

Funding scope

The BUD Fund provides financial support for projects which fall within any one (or more) of these three categories: branding, upgrading & restructuring, and promoting sales.

1. Branding

You may apply for the BUD Fund to carry out branding projects. Examples of eligible branding projects include: 

  • Brand strategy
  • Brand building
  • Positioning and identity
  • Brand equity research
  • Brand promotion

2. Upgrading and restructuring

The BUD Fund can also be used for upgrading and restructuring business operations. For example, you can use the BUD Fund for:

  • New product design
  • Adoption of advanced technology
  • Management and logistics system upgrading
  • Manufacturing automation

3. Promoting sales

Sales promotion is the third area that the BUD Fund covers. Below are some activities which belong to this category:

  • Marketing strategy and research
  • Sales strategic planning
  • Sales channel establishment and management
  • Advertisements
  • Promotion of products or services

Project types

The BUD Fund offers financial support to enterprises in different stages of market development.

Currently, the BUD Fund can be used in two types of projects: developing holistic business plans and implementing specific measures.

Project type I: Development of holistic business plans

This type of project involves the development of holistic business plans for branding, upgrading & restructuring and/or promoting sales of the applicant enterprise.

Qualified service providers should be engaged in the planning process.

The business plans should also be aimed at enhancing the applicant’s competitiveness in FTA and IPPA economies, and facilitating business development in these markets.

Project type II: Implementation of specific measures

The BUD Fund also provides funding for implementing specific measures in the areas of branding, upgrading & restructuring and/or promoting sales of the applicant enterprise.

The applicant enterprise should be responsible for implementing the measures.

These measures should also be implemented with the goal of enhancing the applicant’s competitiveness and facilitating business development in FTA and IPPA markets.

Funding amount

The BUD Fund covers up to 50% of the total approved project cost. However, the maximum amount of funding available for each project is HK$1,000,000.

Why apply for the BUD Fund?

The BUD Fund is a great source of funding for businesses that currently operate in, or plan to expand to the Mainland, FTA or IPPA markets. These economically thriving regions present valuable opportunities for local businesses to find their footing on the global stage.

This funding scheme also has a high funding ceiling (HK$10,000,000).

Limitations of the BUD Fund

With a focus on branding, upgrading & restructuring and promoting sales, the BUD Fund has a rather restricted funding scope. You will not be eligible for funding unless your project falls within these categories.

The funding approval process also takes a lot of time. You may have to wait up to 60 working days (i.e. more than 2 calendar months) before the approval/rejection decision comes back.

Further, there are many restraints on the project that you implement with the BUD Fund. Bookkeeping, financing reporting and auditing are some examples. You must also comply with guidelines in relation to the procurement of equipment, goods and services.

Details of the BUD Fund can be found on this website.

3. E-commerce funding from Choco Up

Based in Hong Kong and Singapore, Choco Up is the leading growth and revenue-based financing platform in Asia. We provide growth capital for e-commerce companies to grow and scale their businesses.


To apply for e-commerce funding from Choco Up, your business must:

  • Have operated for at least 6 months; and
  • Have a monthly revenue of at least HK$80,000.

Funding scope

Choco Up’s funding is suitable for fast-growing companies who want to take their businesses to the next level.

There is no restriction on how you use the funding. That being said, Choco Up’s funding is commonly used by e-commerce companies for the following purposes:

  • Increasing advertising spending to bring more sales
  • Hiring new talent
  • Purchasing inventory
  • Launching new product lines
  • Expanding into new markets

Funding amount

Funding provided by Choco Up ranges from HK$80,000 to HK$80,000,000. The amount of funding you can get depends on your company’s revenue size.

To find out how much funding your company can get, you can sign up for a preliminary offer here. It is free and takes only a few minutes.

Why apply for Choco Up’s funding?

Choco Up helps e-commerce businesses overcome the limitations of traditional funding methods.

Before we explain how Choco Up could support your business, we must first discuss the problems faced by e-commerce companies in Hong Kong.

Challenges faced by e-commerce companies in Hong Kong

For small and medium enterprises, there are three major ways to obtain funding:

  • Applying for government funding
  • Raising capital from investors
  • Borrowing money from financial institutions

Yet, all these types of funding are hardly accessible by e-commerce companies in Hong Kong. Here is why.

1. Limitations of government funding

Government funding schemes usually have complicated application procedures, long processing times and heavy reporting requirements. These could cost you a lot of time and money.

More importantly, there are very few government schemes for e-commerce businesses. This is especially true when you compare the large amount of funding programmes for technology startups.

2. Limitations of raising capital from investors

Raising capital from investors (e.g. venture capital) is a burdensome process. You need a lot of time to put together your business plans, prepare pitch decks and reach out to investors.

What’s worse, fundraising via this route has an extremely low success rate (around 3%). Further, most investors are reluctant to invest in local e-commerce companies because of their limited growth potential in the Hong Kong market.

3. Limitations of borrowing from financial institutions

Getting a loan has various drawbacks.

To begin, many business lenders will ask for collateral to secure the loan. Common types of collateral include cars, property or equipment. If you cannot repay the loan (i.e. you default on the loan), the lender will sell the collateral to cover its loss.

The difficulty with collateral is that small businesses may not have eligible or adequate assets to secure the loan. Even if they have, many business owners are reluctant to provide collateral — because they risk losing those assets in the event of default.

Besides, repayment of a loan is fixed in date and amount. Once you enter a loan agreement, you will need to pay back a fixed sum of money before certain dates.

This arrangement could cause serious troubles. Let’s say your business experiences an underperforming month (very little revenue), and cash reserves are not enough to cover that month’s debt payment. You will have a difficult time repaying the loan.

Some businesses will get another loan to pay off the existing one, but this could put your business in a vicious cycle of endless debts.

In fact, a survey finds that 44% of small businesses take out loans to make repayments on existing debt. You don’t want to become one of them, right?

Choco Up’s solution for e-commerce companies

When the government and investors’ funding are out of reach and loans have stringent repayment terms, Choco Up could be your funding and growth partner.

At Choco Up, we offer growth funding to e-commerce companies, SMEs and startups. Unlike government funding schemes, we do not impose limitations on how, when or where you use the funding.

Choco Up’s growth capital also differs from loans. Instead of demanding fixed monthly repayments, we adopt a flexible revenue-sharing approach. We will share a small portion of your monthly revenue until the funding plus a small flat fee is paid back.

When your company’s revenue performance is good, you will repay more in that particular month (hence the funding will be fully repaid more quickly). When your monthly revenue decreases, so does your repayment in that month.

As mentioned above, Choco Up only takes a small flat fee for providing funding to you. It is our promise — that there are no hidden fees or unpleasant surprises.

If you are looking for funding to grow your e-commerce business, Choco Up’s growth capital is an option you could consider. To learn more about Choco Up could support your company’s growth, check out our client success stories or apply for funding now!