Hong Kong Ecommerce Trends & Statistics 2021
The e-commerce market in Hong Kong is forecasted to increase compound annual growth rate (CAGR) by 9.9% from 2019 to 2024. According to GlobalData’s ECommerce Analytics, its value is going to be about HKD 226 billion by 2024. In 2020, a sharp increase in E-commerce transactions was expected to register at 13.4%. This was the time when clients spent their money rather than on physical stores.
User penetration of Hong Kong would cover 73.1% of the population in 2021 and is projected to reach 83.8% by 2025. Statista projected that the revenue generated by an average Hong Kong user (ARPU) would be USD 1,375.89 in 2021.
Hong Kong Ecommerce Trends & Statistics
Digital wallet helps with almost all e-commerce payments in Hong Kong, approximately HKD $0.9 billion per year. This makes it the second most preferred payment option in Hong Kong. It is estimated that in 2021, digital wallet purchases will be more than what is done by cards. Note that digital wallet purchases are increasing at an annual growth rate of 32%. This year, it is predicted that these digital wallets will ultimately outperform all other eCommerce payments in Hong Kong. The two most popular digital wallets in Hong Kong are PayPal and AliPay. Let us study more about what Hong Kong’s e-commerce outlook looks like, its sales, and payment trends.
Outlook for e-commerce in Hong Kong
Clients in Hong Kong have become more selective when it comes to making financial decisions. Clients are encountering economic constraints and are prioritizing value for money. As per KPMG’s study, Hong Kong’s consumers have significantly reduced their spending on luxury and non-essential goods and have re-allocated this spending to day-to-day essentials such as groceries. More tech-savvy client’s value the ease with which they can interact with organizations through digital channels.
The rate of Consumers in Hong Kong using digital platforms is increasing. Additionally, customers have shifted their preferred payment methods to those that contribute better rewards for online spending.
A necessity for a brand to succeed is earning the trust of its customers. Companies that are empathetic towards their consumers’ personal safety and deliver a consistently positive experience even in COVID-19 have gained loyalty. Consumers have demonstrated solid preferences for organizations they trust to provide consistent, high-quality experiences during these challenging times.
Ecommerce Sales in Hong Kong
“The e-commerce market of Hong Kong has been on a consistent growth curve in the last five years, supported by high Internet and smartphone penetration, improved payment, and logistic infrastructure, and increasing consumer confidence in online transactions”. says Banking and Payments Analyst at GlobalData.
During the pandemic, 52% of all shopping in Hong Kong was carried out online, compared to 40% during the pre-COVID-19 period. Even after the pandemic, this trend is expected to continue. Payment solutions like Alipay, PayPal, and Google Pay have taken card payment due to the rise in e-commerce.
Developing customer payment experience remains one of the key focus areas for online merchants, driving new business models like the buy now pay later. Live-stream e-commerce is a new business model that is gradually gaining traction. Clients can view and buy from live online video streams. Customers tune into these streams to catch suggestions from their favorite stars and the products online. Retailers are also using social media platforms to reach out to customers directly. Many retailers are launching the e-shopping service, which allows customers to even WhatsApp to place orders.
Ecommerce payment trends
For a thriving e-commerce market, Hong Kong boasts excellent internet, smartphone, and banking penetration, which lays the groundwork. Merchants must highlight their product diversity by offerings and the convenience of e-commerce to attract consumers.
The E-commerce in Hong Kong is characterized by very high levels of cross-border spending, which predicts well for international merchants. Young demographics use smartphones and app-based sites to introduce and access eCommerce. Cards are also one of the most likable ways to pay. Therefore, both card and digital wallet payments should be integrated by retailers.
In 2020, 5G was launched in Hong Kong. It had been rolled out across the city-state by the second half of 2020. An increase in demand for on-the-go internet speeds could further promote mobile commerce. Without a doubt, now apps are preferred over browsers to perform transactions. Hong Kong’s Domestic merchants have been slower than their mainland China counterparts when it comes to e-commerce apps.
The Monetary Authority of Hong Kong has closely followed Europe’s revised Payment Services Directive as a template to update its own regulations related to online banking. Therefore, the change in trends has been massive and here to stay in the market.
Covid 19 Impact on Consumer Behaviour in Hong Kong
It is projected that e-commerce sales in Hong Kong display strong growth in 2021. Consumers are rapidly purchasing goods online. Therefore, the eCommerce market of Hong Kong has been on consistent growth in the last five years. A few of the primary reasons for this growth are high internet, smartphone penetration, improved payment, and logistic infrastructure. Another primary reason could be the increased confidence in Online transactions.
Approximately 86% of mid to large e-commerce enterprises’ had problems with logistics and fulfilling orders, as per a study by Paypal. Thanks to this, opportunities open up for companies that are able to cover logistics and related processes. The market is changing due to the current situation, which opens up new business opportunities in Hong Kong.
The new top purchase criteria in Hong Kong are valued for money, ease of shopping experience, and product quality. Users’ overall positive online shopping experiences guarantee that they would frequently make more extended purchases from e-commerce stores than before the start of the coronavirus outbreak.
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