Hong Kong E-Commerce Trends You Should Know in 2024

Hong Kong E-Commerce Trends You Should Know in 2024

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The online retail market in Hong Kong undergoes constant changes. Accelerate your e-commerce business growth by applying the latest e-commerce trends, and establishing yourself over other competition.

While e-commerce was already gaining popularity before the COVID-19 crisis, things changed to become, even more prevalent. The coronavirus outbreak that led to lockdowns and a rise in the e-commerce stock market has affected e-commerce retailers across Asia, with sales surging. Hong Kong is a good example because of its recognized trade hub and its abundance of international business. In that sense, the city-state is becoming one of e-commerce’s most flourishing areas due to more and more of the inhabitants getting involved with online purchasing.

E-commerce trends are the heart of your shopping cart for your tech-savvy consumers and give you the roadmap of the future of e-commerce.

For example, social media has transformed fast enough to affect online purchases. Now features such as Instagram Checkout and Facebook’s Buy button have made sales and discovery of brands easier than ever.

Besides, VR has been the turning point in e-commerce with brands highlighting the products and services in this virtual way which gives their consumers a chance to view the product clearly and make the right decision.

Hong Kong’s e-commerce

With more than 4.5 million online shoppers now, post-pandemic e-commerce growth will be through the roof in Hong Kong. E-commerce sales in Hong Kong went up 27%, as shown by the statistics.  50% of today’s Hong Kong consumers would choose online shopping over offline shopping, which is more and more commonly applied.

With the use of data and metrics, you be able to understand the nature of Hong Kong e-commerce so that you can make an informed choice when setting up an e-commerce shop in Hong Kong.

E-commerce Market Size

Expected RevenueNumber of Users
USD 22.33 billion4.5 million

According to Statista, e-commerce revenue in Hong Kong is estimated to surpass USD 22.33 billion by 2022. Still, revenue reveal a remarkable annual growth rate (CAGR 2022-2027) of 14.26% reaching the market size amounting to USD 43.49 by 2027. The top-grossing segment of online Fashion shopping in Hong Kong is estimated to be USD 2,337 million in the year 2021.

E-commerce Key Metrics

The e-commerce market of Hong Kong will experience a CAGR of 9.9% from 2019 to 2024 and will reach USD 29 billion (about HKD 226 billion) by 2024.

Users by AgePercentage (%)
18 – 24 years old11.6
25 – 34 years old25.8
35 – 44 years old27.6
45 – 54 years old26.2
55 – 64 years old8.8

Hong Kong’s user penetration, which is estimated to reach 76.7% in 2022 and 83.8% in 2025, will cover 76.7% and 83.8% of the population respectively. According to Statista, the ARPU (average revenue per user) should be USD 3.83k, considering the data.

Key Statistics

Statistics show that basic needs items are described by the top three e-commerce categories;  food and groceries, personal hygiene products, and household cleaning products.

Besides, JPMorgan’s 2019 study called out travel, health and beauty, and consumer electronics to be top categories before COVID-19. Along with the nations which are opening the borders beyond theirs, the travel-related products can be anticipated to increase. 

Cross-border Acquisitions

Hong Kong’s e-commerce consumers are also adding orders from overseas, with China being the highest followed by Singapore and Japan is on the list.

Hong Kong’s E-Commerce and the Effect of COVID-19

According to a study conducted by Paypal, as much as 86% of mid to large online businesses facing barriers in logistics and order fulfillment experienced the same issue. 43% of the merchants’ revenue, which is the major cash flow for them was also affected by COVID-19.

Looking at the figures from the consumer market, there were more than half of Hong Kong’s online shoppers purchased more groceries and personal hygiene products online between January and June 2020. People shifted their consumption habits during the pandemic and buying unnecessary goods was significantly reduced because Hong Kong workers fear of losing their jobs or income reduction.

The recent top purchasing pattern in Hong Kong shows that such elements as value for money, ease of shopping experience, and product quality are now the most important. The reason why consumers keep coming back and buying more from the ecommerce stores is the fact that they are enjoying their shopping experiences online more, which was not the case before the Covid-19.

The top online stores and marketplaces in cooperation with Hong Kong are 

The e-commerce landscape in Hong Kong is getting crowded as more e-commerce platforms are entering the market, including Alibaba’s popular Tmall site, which was shut down on October 31, 2022, in Hong Kong. Undeniably, this further indicates that retailers should be up to date with e-commerce trends so that they can keep up with consumers.

Certainly, Hong Kong is the top market in terms of e-commerce expansion, with smartphone, internet, and banking penetration being the best in the region. However, retailers should concentrate on what makes them different from other competitors and make use of the e-commerce regulations to still draw in customers. As the needs of consumers change in the post-pandemic world, e-commerce trends can also catch up with the changing needs of customers.

These are the most recent e-commerce trends in Hong Kong we’ve noticed:

1. Retailers Go Online

According to the data from the Census and Statistics Department, Hong Kong’s physical store retailer sales, which had begun declining since the pandemic in February 2020, dropped by 44% as compared to last year. Only an online presence can help the business survive.

Based on the Nielsen survey’s finding that 46% of the Hong Kongers’ food and beverage consumption was in-home dinning, dining in restaurants was not their top choice. Hong Konger will trend to chose Food delivery, takeaways and cooking at home during the peak of Covid-19 outbreak in 2020 and this trend would likely to continue post-pandemic.

Many Hong Kong based businesses are introducing the O2O business model (online-to-offline) in order to cope with the high level of online ordering. Shopline, a global ecommerce platform, reported that more than 50% of its ecommerce retailers in Hong Kong are also owners of physical stores. In the future 20% of its merchants would like to add e-commerce platform to their activities such as running pop-up stores.

Face-to-face retailers are encouraged to switch to the O2O model because they can sell 24/7 online without losing sleep over downtime and shop closures at night. 78.3% (or almost 4 out of 5) of traders considered this an opportunity to have a competitive edge.

2. The Preferred Payment Methods: Digital Wallets and Credit Cards

The most used payment method is credit cards, which give an annual sales of USD $1.8 billion, slightly under half of all ecommerce sales. This implies that credit cards are the preferred way to shop online where Visa, American Express and MasterCard are leading among other card companies.

This aside, bank transfers and digital wallets are some of the most widely used payment tools in Hong Kong with adoption rates rising at 12% compound annual growth rate (CAGR) and 11% compound annual growth rate (CAGR) respectively. A figure of about 48% is expected to be carried out by bank transfers and digital wallets by 2023.

On the other hand Hong Kong’s shoppers are increasingly shifting to other forms of payment (27% decline in CAGR), being debit cards (14% decline in CAGR), and cash on delivery (13% decrease in CAGR).

2.1 Online Payment Options

A chunk of the ecommerce payment in Hong Kong (HKD$0.9 billion per year) is done through the digital wallets which are the second most preferred online payment in HK.

In 2021, the total value of digital payment transactions will exceed those done by cards, as the growth rate is estimated to be 32% per annum. It is expected that digital wallets will be the primary trading convenient medium by 2022, beating other e-commerce payment means in Hong Kong. The most used digital wallets among Hong Kong residents are PayPal, AliPay and WeChat Pay.

3. Global & Multinational Supplier

While in the virtual store, Hong Kong digital buyers are willing to pay more. Online platforms Taobao, Amazon, and JD from domestic merchants would allow them to enter the market together with foreign e-commerce providers.

Similarly, the cross-border spending is remarkable as the 2019 JP Morgan study showed that up to 75% of Hong Kong online buyers have shopped from overseas, with the most preferred markets being the Mainland of China, Singapore and Japan. Accordingly, cross-border expenditures take up to 60% of the total online shopping, with $2.2 billion spent on this purpose.

When you talk about your international or cross-border partnerships, e-commerce fulfillment shipping is then important to help you scale your business.

4. Rise of the Mobile Economy

Mobile commerce has made it possible for consumers to shop for products directly from online shopping platforms without the need for use of desktops and laptops. Applications as apps like Amazon, in-app purchases, digital wallets, and mobile banking are forms of mobile e-commerce platforms.

As per Worldpay Merchant Solutions, more and more shoppers will prefer to buy via mobile phone as the trend will continue to develop. Those merchants who analyze their customers’ behaviours and create an exciting online experience for them will surely have a successful ecommerce business. E-commerce Hong Kong merchants should provide their customers with the digital wallet services that they prefer to use since digital wallet transactions are projected to account for a third of the total purchases in Hong Kong’s e-commerce purchases over the next five years.

In addition, Hong Kong had initiated 5G, which was a gratifying progression as the consumers also received higher internet speeds. Thus, people are able to buy products and services without much effort through their cellphones, which is another reason for the rising trend of mobile commerce.

5. Better Experiences with Customer Payments

The speedy nature of e-commerce, coupled with the fact that it is a highly competitive market internationally and domestically, keeps the competition tough. They have always been doing this, and now, they are continually designing new business models to improve the satiation level of the consumers.

Similarly, ‘buy now, pay later’ model has been originated with consumers making interest-free payments to online shops in instalments. This is an advantage in the purchasing of an item online but if a consumer is not able to pay up the whole amount.

Another trend on global e-commerce that has been introduced in Singapore is Hoolah that started operating in Hong Kong in November, 2020.

In Summary

The COVID-19 pandemic has brought about changes in consumer preferences, especially as the residents of Hong Kong continue to be one of the most active online shoppers, with the trend of digital store migration leading to a digital boom. Digital wallets and bank transfers have eventually overrated credit cards, similarly installment contracts, debit cards, and cash-on-delivery methods have also been trending up. Hong Kong’s solid infrastructure sets the scene for cross-border merchants, about 75% of which are in from China, Singapore, and Japan. Embrace the radical models, such as “Buy now, pay later” if you want to excel in the market. Register your business in Hong Kong‘s booming e-commerce with professional accounting services with Fastlane. Contact us now!

Author

ang wee chun

Ang Wee Chun

Wee Chun Ang is a seasoned professional with expertise in business expansion, global workforce solutions, accounting, and strategic marketing, backed by a strong foundation in financial markets. He began his career managing high-value FX transactions at Affin Moneybrokers, a subsidiary of Affin Group, and KAF Astley & Pearce, a subsidiary of KAF Investment Bank. During his tenure, he played a pivotal role in setting up FX options desks, achieving significant milestones, including a 300% increase in desk revenue.