17 Feb 2020
Posted in Banking
Amidst civil unrest, Hong Kong sees 11% jump in e-commerce transactions in 2019, finds GlobalData
The ongoing civil unrest in Hong Kong has given an unanticipated thrust to e-commerce transactions, as there was an 11% jump in the total transaction value from 2018 to 2019. The value is expected to further grow at a compound annual growth rate (CAGR) of 8.8% from an estimated HK$140.2bn (US$17.9bn) in 2019 to HK$196.5bn (US$25.1bn) in 2023, says GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘Hong Kong Cards & Payments: Opportunities and Risks to 2023’, states that rising mobile and Internet penetration, low investment costs, and advances in logistics and payments infrastructure boosted e-commerce market during the past five years.
According to UNCTAD’s B2C E-commerce Index 2019, which measures an economy’s preparedness to support online shopping, Hong Kong ranked 15th in the world. The country was also ranked 12th in the World Bank’s Logistics Performance Index 2018, reflecting the country’s strong e-commerce infrastructure and ability to meet higher delivery volumes.
Online shopping is also getting a boost due to the current unrest in the country as wary Hong Kong consumers are staying at home to avoid protests and are going online to buy necessary items like groceries, food and clothes.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “E-commerce spending in Hong Kong will continue to rise on the backdrop of increasing convenience, rising consumer preference for online payments and promotional campaigns by online retailers.”
According to GlobalData’s 2019 Banking and Payments Survey, payment cards are the most preferred payment mode for e-commerce purchases in Hong Kong, accounting for 47.6% in 2019. Alternative payment solutions are also increasingly being used and accounted for 34.8% share. Alipay is the most preferred alternative payment solution in Hong Kong, followed by PayPal. Reddy concludes: “The country’s well developed infrastructure, proximity to Chinese manufacturing hubs, favorable business policies, and availability of convenient payment solutions are all expected to further drive e-commerce market in Hong Kong.”