At the age of 45, Alvin Ho had an enviable job as head of accounting for a British company that made headphones, Atomic Floyd. But he was bored, and with took a leap of faith, first as CFO with an e-commerce logistics company, Floship, then with a traditional B2B freight forwarder, AFL. One more leap, and he was working for himself, using what he had learned from the finance and operations of both to build his own company, TigerfireShip, from scratch.

Along the way, he has taken advantage of Hong Kong’s supportive environment for entrepreneurs, using a grant from the Hong Kong government to get a diploma in supply chain management and another grant from the quasi-government Hong Kong Productivity Council to build his own logistics platform.

AmCham HK e-Magazine takes a deep dive into what it means to be an entrepreneur in one of the world’s most competitive industries, e-commerce logistics, in a city that is steeped in traditions of seafaring and trade. The interview was conducted by Zoom from Ho’s car, in classic entrepreneurial fashion, rather than from a corporate office.

You could say that trade and logistics are part of Hong Kong’s DNA and that entrepreneurs like Alvin Ho keep it that way.

Trading and logistics are by far the largest of the four “pillar” industries of Hong Kong, together accounting for 23.7% of Gross Domestic Product (GDP) and 608,200 jobs in 2021, according to the Hong Kong Trade Development Council (HKTDC). While that may sound like a target too large to miss, by the time Ho set out on his entrepreneurial journey, it was already in full-blown disruption.

Hong Kong’s huge goods trade through its ports and roads land is gradually declining in value terms. Air cargo, however, is another story, and Hong Kong International Airport (HKIA) was the world’s busiest airport for cargo in 2022, with 4.2 million tons of cargo. Part of the reason for that is the explosive growth of e-commerce sales, which revolutionized traditional logistics, as consumers demanded instant gratification.

Globally, e-commerce is growing 9%, with US$4 trillion in trade annually, US$1.4 trillion of that generated by China.[i] The International Air Cargo Transport Association (IATA) predicts that e-commerce will account for one-third of air cargo volumes from about 20% today. The message is faster, skip the middlemen, and direct-to-consumer shipping rather than the traditional B2B, or the business-to-business of traditional retail.

In 2023, e-commerce was a relatively tiny 2.6% share of Hong Kong’s massive HK$8.8 trillion, or US$1.1 trillion in merchandise trade. But after Covid-19, when person-to-person contact was limited, people increasingly used their mobile phones for shopping. Online shopping since then has rocketed, growing to $32.5 billion in 2023, although still only 8% of retail sales overall.  Bricks-and-mortar retail sales, meanwhile, have been sluggish, dropping by 13.3% year-over-year in July.

Navigating disruption in e-commerce logistics

E-commerce demands an entirely different approach to logistics than traditional supply chain management, bypassing many of the chokepoints that tied manufacturers to costly tiers of service providers. Ho’s first job after he left Atomic Floyd, and before he set up his own company, was as a Chief Financial Officer at Floship Limited, a cross-border start-up for global e-commerce brands. At Floship, Ho built up an interest in the industry and learned the basics. Among other things, he learned the vital importance of online platforms connecting carrier networks with third-party logistics (3PL).

“For example, say you own an online business selling watches,” Ho explains. “You receive your orders online, and the customers will tell you the name, the address and the product they want to order. So that data will be on your online shop. It will remain there as a database, but you need to hire someone to enter the same set of data into a logistics system and type it in. So, you have to log into FedEx, type in the information, duplicating the work, right? If I build an electronic bridge to link the two systems together, you don’t have to hire an extra person to do it. That’s API.”

Floship had its own in-house information technology (IT) team handling the tech side. Two years later, Ho jumped to an ocean freight forwarding company, AFL Logistics Limited, which asked him to set up an e-commerce logistics department.

AFL was finding that the expansion of “B2C” or business-to-consumer e-commerce was eroding its traditional B2B business, with fewer people shopping at traditional bricks-and-mortar retail and more online.

“My boss at AFL said, why don’t you try out your business idea?” Ho says. “I was on my own, with no resources, and the project seemed large scale. But it turned out to be a success. After that, I started my own company, which is now in its third year and growing 20% per year”.

As a corporate veteran, Ho knew that the key to survival was identifying demand. As an entrepreneur, he needed to find a niche within a niche within a niche. The online delivery market for e-commerce was dominated by companies owned by some of China’s largest players, such as Taobao and JD.com.

Demand was certainly there, but competition would be brutal unless he chose exactly the right opportunity. Hangzhou SF Intra-city Industrial Co., Ltd. (9699.HK), China’s largest independent online delivery company, was beginning to go global – it launched its “SoFast” express delivery service in Hong Kong in July – and so TigerfireShip needed to secure its position before it was overtaken by competitors with deeper pockets.

Taobao and JD.com covered primarily shipments within Asia. For cross-border re-export from Hong Kong to the rest of the world, there was a gap. Only a handful of companies, included Floship, knew how to do it using automation, Ho says. “I leveraged my knowledge from Floship and started TigerfireShip to do cross-border logistics from Hong Kong.”

Ho’s experience with Floship gave him another piece of the puzzle. While Floship’s customers were largely multinationals, it also worked with start-up crowdfunding campaigns, providing order fulfilment after the products were successfully launched. Ho knew that, at least at the time, few logistics companies specialized in e-commerce, largely because of its difficulty, and even fewer in crowdfunding logistics. He decided that this was where he would start.

Starting from scratch

Why go off on his own? Ho says he went into accounting because of parental pressure, without feeling much attraction for the role. “I’m an extrovert. I like building something tangible rather than reading numbers and I don’t want to be just a tool, which is replaceable. With my lack of interest in accounting, I predicted I would be made redundant by the time I am 55 years old” (Ho is 53 now).

The first step was identifying potential clients in the crowdfunding space, as well as managing the highly specific elements of the supply chain to get the clients’ products to their customers. Ho’s idea was that TigerfireShip would pick up the fulfilment workload of start-ups that had finished their crowdfunding campaigns and were ready to ship their products.

Most start-ups in North America work through Indiegogo, Inc. or Kickstarter, US websites that help their customers organize crowdfunding, and Shopify Inc (SHOP.US), a Canadian portal that like Taobao, offers virtual shop windows to businesses. (Taobao, which has been Chinese-language so far, in September launched English-language apps in Singapore and Malaysia that may provide new competition to Shopify; Shopline, in English and Chinese, also based in Singapore, does much the same). The start-ups who use these portals do the logistics work, either on their own, or through outsourcing.

Ho figured that he could provide the logistics back end for his customers, connecting them with third-party logistics suppliers including warehouses and transport, with TigerfireShip orchestrating and customizing the logistics supply chain through an “electronic bridge”, as Ho calls it, between virtual showrooms and courier services like FedEx Corporation (FDX.US) and Deutsche Post AG (DHL.DE).

The service is known in the industry as 4PL or fourth-party logistics and different from 3PL, or third-party logistics. TigerfireShip uses warehouses, for example, only when they are needed for a job. It leases space on demand in warehouses in Hong Kong, Long Beach in Los Angeles, and Dusseldorf. The niche within a niche within a niche of TigerfireShip is crowdfunding, where start-ups need a bespoke service and attentive partner to handle the logistics of getting their products to market.

Why TigerfireShip, as opposed to a mainstream 3PL logistics company? “You can imagine when a brand owner comes to us,” says Ho. “‘What is your niche?’ people will ask. Aren’t you just a middleman who will make things more expensive? I tell them, we have our value. If you are a small-to-medium size enterprise (SME), if you look for warehousing, you will have to hire your own warehouse person and open different accounts with DHL, FedEx. It’s all time consuming and costly, not to mention you need logistics knowledge or knowhow. As a small and medium enterprise, an SME, you can use us as a single point of contact. As a business owner, you can let us do the heavy lifting.”

Decisions, decisions

Drawing on his accounting background, among Ho’s first decisions was that TigerfireShip would have as few assets as little as possible, in order to keep costs to a minimum. “TigerfireShip is an aggregator and a light asset model,” he says. “We do not own any warehouses, delivery vehicles, and employ no workers. We use different APIs connecting to warehouses and courier services as well as our clients’ online shops.” Out of a team of six, three are in sales including Ho, two are in operations providing customer service, and one is the chief financial officer. Four are based in the Philippines, while Ho and CFO, Peter Fung, share a co-working space at Spaces Lee Garden 3 in Causeway Bay, Hong Kong’s midtown.

But that was just the start. To unite the different systems of clients and 3PL providers electronically, TigerfireShip needed a dedicated logistics platform. Initially, Ho borrowed a platform from Fulfillment Bridge, another Hong Kong-based company, through an introduction from a former colleague at Floship. Fulfillment Bridge provided services on a subscription basis, and Ho felt that TigerfireShip needed its own tech. He was able to get help from the Hong Kong Productivity Council. He applied for a grant in October 2023, and by March 2024 had been approved for HK$600,000 for the first stage of the project. A HK$470,000 grant for the second stage was approved in June. Ho says the will be ready by November.

The team will be able to run the two systems in parallel and transfer existing customers from the old system to the new one, Ho says. The Hong Kong government also helped with HK$20,000 in funding to study for a professional diploma in supply chain management from the Hong Kong Management Association, on top of his MBA from Macquarie Business School and bachelor degree in accounting and finance from the University of Canberra.

Finding customers was another barrier. TigerfireShip could look for customers by scanning the websites of Indiegogo, Kickstarter and Shopify. That proved to be easier said than done. In the first and second year, the company had no marketing, Ho says. They sent cold-call emails to business owners and creatives, asking if they needed logistics services. After the first two years, Ho had enough accumulated retained earnings to spend some of its cash flow on marketing.

 “By the beginning of 2024, we had grown by three times,” Ho says. “How could I keep up with this multiple? My thinking was that I would have to do some automation or find a good marketing agency. You must do your due diligence and obtain two to three quotations. Otherwise, you will likely waste money and the agency won’t deliver as expected. Then I thought there might be an application or automation technology using algorithms to scrape the Internet to blast out email. But it turned out that automation didn’t work. It really has to be personalized. You can’t just blast out mass emails to your target market. It will damage the brand as well.”

Then Ho got lucky. Crusade Partners, a venture capitalist introduced Ho to one of his portfolio clients that had a business process automation tool, which was able to filter websites to reduce the population of potential leads to a manageable size for personalized emails.

 TigerfireShip’s customers are “everywhere” says Ho, in the US, Canada, France, the United Kingdom, Italy, Australia, Israel, New Zealand and Hong Kong. The crowdfunding clients and marketplace clients have distinct needs. The crowdfunders “are creators,” says Ho. “They create, they innovate new ideas to bring to the market and are raising funds on platforms” like Indiegogo and Kickstarter. “The size is from 500 to 10,000 orders, with different addresses around the world. If I’m lucky, I will land one of those clients in a month, which will give me an extra 5,000 orders.”

The kinds of clients TigerfireShip gets from Shopify have already gone through the crowdfunding process and are ready to build their own online shops. “We provide storage of products and integration with Shopify. My staff on the platform will see orders, the warehouse will pick and pack them, and then ship them all over the world,” Ho says.

Why Hong Kong?

Why Hong Kong? “It doesn’t matter if you are a US, German, or Singaporean brand,” Ho says. “Eighty percent of manufacturing is done in China. In Hong Kong, it takes 24 hours to get goods from the client’s factory to the warehouse in Hong Kong. The right place to do pick and pack fulfilment is Hong Kong. For larger products, we can use ocean freight to Los Angeles, for US customers spoiled by Amazon.com. For some customers, we can use bulk shipping to LA, where we can do pick and pack and delivery to the customer’s doorstep in two to three days.”

TigerfireShip is still in early days. The name, Tigerfire, originally came from a nickname Ho’s son uses for computer games. In early 2024, Ho added “Ship” to the name as part of a rebranding effort to identify it with logistics. According to Ho, TigerfireShip’s first-year revenue in 2022 was HK$1.5 million, 2023 was HK$5 million, and he thinks 2024 will be HK$8 million. Up to now, Ho has been funding the company from his own pocket and retained earnings. He is beginning the process of looking for venture capital. He needs funding to scale up sales and improve his tech for better customer experience and to retain clients. He would also like to invest in a 3PL factory with advanced robotics like the one he leases in Dusseldorf.

“Our German warehouse partners are fully robotic,” he says. “They have a 300,000 sf warehouse with six human beings and 25 robots. It’s Like Star Wars and R2D2. 95% of the working parts are robots, and you can cut the cost of logistics by 50%.”

Another gleam in Ho’s eye is green logistics. He thinks within three years, greening of the logistics supply chain will become compulsory. He would like to offer carbon credits along with his service, so that if a customer asks to ship their products from Hong Kong to Japan, they can provide 500 grams’ worth of carbon credits for every 500 grams in weight of the shipment. He says: “The challenges ahead are scaling up faster, finding more cost-effective shipping solutions as clients always expect faster and cheaper solutions, improving customer experience, retaining clients, and implementing Artificial Intelligence (AI) for automation.”

Happy at last

Ho’s entrepreneurial journey is far from over, and yet may fail, but is he happy now? “Yes, I’m very happy now,” he says. I’m excited every day to wake up, to rush to work, to fulfil my vision and build my company. In the past, my parents asked me to work hard. But if I’m going to work hard for someone, I think I should use my energy to work for myself.”

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[i] Rebecca Jeffrey, “E-commerce to become a third of air cargo volumes,” Air Cargo News, March 13, 2024, https://www.aircargonews.net/iata-wcs/e-commerce-to-become-a-third-of-air-cargo-volumes/

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