22 Mar, 2021 Hong Kong’s e-commerce growth will continue beyond COVID-19 pandemic, says GlobalDataPosted in Banking
E-commerce sales in Hong Kong are forecasted to register a strong growth of 11.1% in 2021, as consumers are increasingly opting for online purchases, says GlobalData, a leading data and analytics company.
According to GlobalData’s E-Commerce Analytics, e-commerce sales in Hong Kong are expected to grow at a compound annual growth rate (CAGR) of 8.3% from HK$178.0bn (US$22.9bn) in 2021 to HK$226.0bn (US$29.0bn) in 2024.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “Hong Kong’s e-commerce market 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.”
The social unrest in 2019 followed by the COVID-19 pandemic had accelerated online purchase of essential goods. Several brick and motor retailers started online model to connect with customers and drive sales, due to decline in customer footfall and revenue.
According to Visa Consumer Payment Attitudes Study conducted in August 2020, 52% of all shopping in Hong Kong during the pandemic was carried out online, compared to 40% during pre-COVID-19 period – a trend which is expected to continue even beyond pandemic. The rise in e-commerce has pushed the use of card payments as well as alternative payment solutions such as Alipay, PayPal and Google Pay.
Improving customer payment experience remains one of the key focus areas for online merchants, which is driving the emergence of new business models like buy now pay later. For instance, Singapore-based buy now pay later solution hoolah launched its service in Hong Kong in November 2020, allowing online shoppers to pay for their purchases in three interest-free instalments.
Live-stream e-commerce is another new business model, which is gradually gaining traction. Customers can view and buy from live online video streams hosted by celebrities. Consumers tune into these steams to catch suggestions from their favorite celebrity and buy products online.
Retailers are also leveraging social media platforms to directly reach out to customers. In May 2020, Landmark shopping mall in Hong Kong launched an e-chat shopping service, allowing customers to directly communicate with store staff on WhatsApp and place order online.
Mr Reddy concludes: “Hong Kong e-commerce market is expected to continue its uptrend over the next few years even beyond the pandemic driven by growing consumer preference, emergence of new online shopping models and availability of customized payment solutions.”