Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
Hong Kong: Hong Kong has maintained its position as one of the world’s leading digital cities with one of the highest internet penetration rates at 93 percent. According to a 2021 survey on internet usage conducted by the Office of Government Chief Information Officer (OGCIO), 94 percent of all total households in Hong Kong have access to the Internet. An 80 percent of these households have access to a personal computer and 99.7 percent are currently accessing the Internet through their smartphone device.
The survey highlighted the ubiquitous smartphone usage amongst persons above aged 10 and above at 94.7 percent. The other demographic group that has seen a dramatic uptake in smartphone ownership is the older than 65 years age group where the numbers increased by 12 percent to 69 percent from the previous year.
According to Statista, revenue in the e-commerce market is projected to reach US$7.6 billion representing an annual growth rate of 10.5 percent. Comparing to other Asian cities, Hong Kong is considered an early e-commerce adopter. Besides high internet connectivity, the Hong Kong population live in highly connected urban areas, making it a very conducive environment for e-commerce to thrive. In 2020, 5G networks became available and within just two years, 90 percent of the population have now upgraded and have access to information faster than before.
Hong Kong consumers purchases from cross-border sites like Alibaba, Taobao, WeChat, and Amazon for health and beauty, consumer electronics, fashion, household products, and equipment. The market is currently valued around US$3.7 billion projected to expand an annual growth rate of 10.2 percent.
It was not until the COVID pandemic that e-commerce became arguably the mainstream way of buying. After successive rounds of social distancing measures and apprehension of crowded; consumer behavior shifted after experience the convenience of online shopping. Hong Kong consumers now buy everything online including fresh produce, going against the cultural norm of buying fresh from wet markets.
Another trend worth mentioning around the proliferation of e-commerce is that Hong Kong people are switching to convenience and are forking out on delivery fees. In 2019, Food Panda one of the largest food delivery companies in Hong Kong launched PandaMart, an e-commerce vertical that offers express delivery service of daily essential goods in under 25 minutes.
This service resonated well during COVID social distancing measures as residents worked from home and turned to fast and convenient on-demand home deliveries.
Echoing the exponential growth of e-commerce globally, retailers are embracing omnichannel retailing. This refers to the facilitation of selling via multiple channels which includes traditional brick and mortar stores, online sites, marketplaces, and via social media channels. In Hong Kong, many traditional brick and mortar retailers are shifting from offline-to-online model (O2O) business operating model to stay relevant to their customers.
One of the major beneficiaries of COVID is HKTVMall.com, an online shopping platform that saw their number of unique customers grew from 94,000 in 2015 to 1.29 million in 2021. The company has a successful partnership program to lure traditional retailers to build their online stores. It is now the number one online shopping mall in Hong Kong with 5,500 online stores.
With the continuous shift to e-commerce, businesses are ploughing ahead to enhance customer experience and engagement. In recent years, we see e-commerce companies make significant investments to expand their virtual engagement through deployment of AI assistants, live-streaming, and promotion through key opinion leaders (KOL)
Access to a world-class logistics infrastructure has also played a heavy hand in spurring e-commerce growth in Hong Kong. Hong Kong consumers are at a highly advantageous position due to its position as the trading port for China. Hong Kong ranks highly in the World Bank’s global ranking of logistics capabilities and quality.
Numerous U.S. ecommerce companies such as iHerb.com utilize Hong Kong as a warehouse and distribution center for delivering orders to customers located throughout the APAC region. Geographic proximity and connectivity have been cited as Hong Kong’s strength. With access to different logistic providers, Hong Kong is a lively eco-system for e-commerce players to compete aggressively for business. This has enabled SMEs and mom and pop shops operating on social media platforms like Instagram, Facebook, WhatsApp, and YouTube to fulfill orders.
The Hong Kong government provides various subsidies for businesses hoping to create or enhance their online business operation. The funding schemes include the Trade and Industry Department’s Dedicated Fund on Branding, Upgrading and Domestic Sales is available to all Hong Kong-registered businesses. Other funding schemes available include the Cyberport’s Creative Micro Fund, the Hong Kong Science and Technology Park’s Science and Technology Entrepreneur Program, and the Hong Kong Productivity Council’s Retail Technologies Adoption Assistance Scheme.
Macau: Latest figures in 2021 released by the Statistics and Census Service (DSEC) show that household Internet penetration level has reached 94.6 percent, an increase of 2.7 percent from the year before.
Currently, about 98 percent of the population are accessing the internet via smartphones. The survey confirmed that the heaviest users are between 15- 24 years of age and the highest rate of growth is found amongst senior citizens above the age of 65 at 9 percent from the previous year to 65.3 percent.
The e-commerce sector is growing in Macau. Due to its proximity and trade reliance, Chinese e-commerce sites such as Alibaba, Taobao, JD.com and WeChat are extremely popular. In 2021, the first of its kind, live-streaming commerce center was opened for retailers to showcase local products and services.
Many local ecommerce business services providers are available in Hong Kong. The Hong Kong Trade Development Council (HKTDC) website lists a range of e-commerce business service providers.