Transformation of a Shopping Heaven – Hong Kong E-commerce Review

With 7,082 residents per square km, Hong Kong is ranked 4^th among the most densely populated areas in the world. With that, comes an equal density in shops, and convenience stores just around every corner. Adding the fact that Hong Kong enjoys duty-free concessions and other preferential policies, it is no surprise that Hong Kong is, since long, a Shopping Heaven. But, what about online shopping in Hong Kong? With all kinds of stores within walking distance, do Hongkongers want to shop online?

Lukewarm opinion on Hong Kong e-commerce

Truth is, before 2019, Hongkongers were actually known for being the most ‘reluctant’ online shoppers in the world according to the FIS 2019 Retail Global Payments Report especially compared to Mainland China, where online shopping had become a major trend for some time. Among the 16 regions whose retail payment patterns are tracked, Hong Kong has the lowest online-to-total-retail. Spending ratio at 4%, with China at 24% and the world’s average at 9.4%. This pattern may have resulted from the fact that Hongkongers could buy almost anything in stores within easy reach. Instead of waiting for shipping and paying freights. Analyses also show that the main concerns while shopping online are the security of payment facilities and data privacy.

Post-Corona: the Rise of Hong Kong Local e-commerce

Hong Kong’s e-commerce potential is accumulating and has begun to manifest itself. Statista indicates that Hong Kong’s e-commerce revenue in 2020 will reach 5,992 million USD, a y-o-y growth by 23.3%, and will have a market volume of 9,786 million USD by 2024. The maturing of its e-commerce became more evident through the pandemic lately as Hongkongers began to notice changes in online shopping patterns of family and friends. Previously, the main forces in HK e-commerce had been Taobao (Alibaba group) and Facebook Marketplace. Desperately looking for goods to stockpile during the pandemic, Hongkongers not only increased the frequency of online shopping. But because of the shutdown of various cities in China and other nearby countries, also began to shift focus towards local e-commerce platforms such as HKTVmall, Bigbig Shop by TVB, Strawberrynet. And popular supermarket e-shops like ParknShop and Wellcome.

Statistics from the biggest local e-commerce platform in HK (HKTVmall), indicate a significant increase in its recent turnover, with an average daily order value of 1.4 million USD in January (y-o-y increase: 49.3%). In February, an average daily order value of 2.1 million USD was recorded, giving a monthly increase by 52.3% (y-o-y increase by 1.59 times). Many local retail chains seized this opportunity and started refurbishing their online stores. HKTVmall set up pick-up points in various districts and offers free delivery for batches over 25 USD; Watsons’ (big drugstore chain in China, HK, and Taiwan) has webshops connected with designated stores for pickup services, reducing transportation costs. Regular discounts and limited-time campaigns are also common approaches to increase website traffic and sales.

Hong Kong’s e-market is getting more attractive

The unstable circumstances have undoubtedly undermined the retail industry in Hong Kong. But at the same time also gave rise to local e-commerce. HKGSEO points out the unique attributes allowing local e-commerce to take advantage of Hong Kong’s proximity to Mainland consumers makes it a hub for imports. Its international trading history, understanding of foreign markets and products. As well as its proximity to Mainland suppliers allow Hong Kong to build extensive trading networks, which makes Hong Kong an exporting hub connecting China and the world. For example, although large online players like JD.com and Tmall in China often claim that the imported goods are authentic and the sources reliable, many Chinese consumers still seem to prefer goods shipped from Hong Kong. Coupled with Chinese consumers’ insatiable appetite for foreign goods, Hong Kong e-commerce or e-market can be very attractive to Chinese consumers and ambitious players.

Refining Online Shopping Experience

Apart from growing in volume, online shops in Hong Kong are getting more and more sophisticated. GS1 HK and Retail Asia Expo jointly awarded 10 local e-commerce websites for creating a top-tier user experience and achieving extraordinary sales growth. Many renowned etailers including Strawberrynet, ZALORA, Pricerite, and HKTVmall are on the list for their innovation, impressive branding and clear categorization to provide the best shopping experience. For sure, Hong Kong’s e-commerce is going to get more exquisite (similar to Mainland’s recent trend) which may involve sophisticated live content and 3D assets. For online players to catch up with the trend, Icecat’s PIM platform with rich media solutions such as picture optimization and Product Story definitely has a chance to come in to help in the near future.