This is the group’s first move into retail e-commerce. SCMP Group also publishes leading fashion and lifestyle magazines including ELLE, Cosmopolitan and Harper’s BAZAAR in Hong Kong.

The SCMP deal comes at a time when global media companies including The New York Times and the Financial Times are keen to explore new profit streams and further digitalize their content and business. This comes as print circulations continue to decline worldwide due to changing patterns of consumption in line with rising smartphone adoption and other technological innovations.

“This acquisition [of MyDress] underpins the SCMP Group’s determination to fortify its digital development growth thrust,” said Robin Hu, CEO of SCMP Group.

“Through MyDress, we will gain a firm foothold in the e-commerce space in Hong Kong and extend along the internet value chain of ‘content-community-commerce’, thus enabling new monetization possibilities,” said Hu.

Founded by local entrepreneurs Edmund Wong and Leon Lai, MyDress launched its e-commerce platform in 2013.

It quickly gained a strong reputation among online shoppers in the Greater China region, the world’s fastest-expanding e-commerce market, by selling a broad range of boutique and fast fashion apparel, accessories and undergarments.

It sources these from over 50 brands and sells them at competitive prices compared to offline retailers, which have to bear the burden of high rental costs in Hong Kong, one of the world’s most expensive cities.

In 2014, the company was ranked by search giant Google as the No.1 most searched fashion e-commerce website in Hong Kong on mobile devices.

The total consideration payable by SCMP Group is HK$39.7 million (US$5.12 million). This breaks down as HK$13.6 million for the acquisition of existing issued shares of MyDress, HK$23.0 million for further subscription of the enlarged share capital, and HK$3.0 million for the subscription of convertible notes, both to be issued by MyDress, according to the company’s announcement.

SCMP Group, through its wholly-owned subsidiary Affleck Ltd, will own 56.65 per cent of the enlarged share capital of MyDress upon completion of the transaction.

Affleck also has a one-time call option to acquire all remaining shares in MyDress.

SCMP is not alone in moving towards digitisation.

In June, China Business News (CBN), a key part of the state-owned Shanghai Media Group, announced it would be partnering with Alibaba, China’s e-commerce giant. Alibaba said it would invest US$194 million for an undisclosed stake in the domestic financial media organisation.

In February, Hong Kong Television Network (HKTV), the flagship company of outspoken entrepreneur Ricky Wong Wai-kay, launched its online-shopping operation, which is initially targeting the local internet broadcaster’s 1.23 million registered subscribers.

Research firm eMarketer has forecast China’s total retail e-commerce sales will rise 42.1 per cent to US$672.01 billion this year, up from US$472.91 billion last year.

For SCMP, the deal also signals a pivot towards a more diverse business portfolio for one of Asia’s largest media empires.

The younger generation of readers - the “Facebook generation” - tends to prefer digital newspapers and magazines, while also looking online for a range of goods from daily fashionwear to luxury cars.

“Our current magazine portfolio consisting of ELLE, ELLE Men, Cosmopolitan, Harper’s BAZAAR and Esquire gives us the lion’s share of Hong Kong’s lifestyle leisure magazine audience in both print and online,” said Josephine Chan, managing director of SCMP Magazines Publishing Ltd.

“The acquisition of MyDress will equip us with the capabilities and know-how to further engage and interact with, and most importantly monetize, our valuable audience base,” she added.

On Facebook, the world’s largest social media network, the official page of SCMP currently has more than 258,000 fans, while MyDress, whose slogan is “online fashion store dedicated to Hong Kong people”, has over 183,000 followers.

“We see SCMP Group’s investment as a catalyst for MyDress to leap ahead and expedite our growth in the online retailing space, towards our goal of becoming the go-to destination of fashion e-commerce in Hong Kong,” said Lai.

Prior to MyDress, Lai led the Hong Kong operation of Taobao and Tmall, the two key online shopping platforms of Alibaba, also known as China’s Amazon.

The South China Morning Post, the flagship newspaper of SCMP Group, was founded in 1903 in the former British colony, making it one of the oldest English-language newspapers in Asia.

Media industry tycoon Rupert Murdoch’s News Corporation owned the newspaper before selling it in the early 1990s to Kuok’s Kerry Group, which also owns the luxury hotel chain Shangri-La.