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 personal computer (PC), smartphone penetration, and Internet usage at a consistently high level. According to the latest government survey conducted in 2020 over 2.01 million households in Hong Kong had PCs, representing 75.3 percent of all households in Hong Kong. 100 percent of these households had their home PC connected to the internet. The survey also showed significant growth of the percentage of persons aged 10 and above who had used internet service increased from 85.1 percent in 2018 to 87 percent in 2020. The increase was most remarkable among persons aged 65 and above.
The significant increase in internet usage was largely due to the wider availability and usage of smartphones. Nearly 6 million persons aged 10 and above had smartphones in 2020. The percentage of persons aged 10 and above who had used smartphones for connection to the internet reached 99.3 percent in 2020 compared to 98.8 percent in 2018.
eCommerce uptake is increasing with rising smartphone use and the younger generations shopping via social media channels. Mobile eCommerce is enhanced with 5G networks available in Hong Kong in the second half of 2020, increasing on-the-go internet speeds and facilitating more mobile eCommerce.
Shopping malls are open seven days a week and are easily accessible to the population. In the past, brick-and-mortar retailers were able to secure business without innovating significantly since they enjoyed booming sales from the influx of Chinese tourists. However, in response to the social unrest in Hong Kong in 2019 and COVID-19, digital transactions have increased, and retailers are realizing that eCommerce is crucial. In this respect, eCommerce sales in Hong Kong grew 27 percent in 2020 and 50 percent of consumers prefer online shopping. The Hong Kong eCommerce market size was estimated to be worth US$6.3 billion in 2020, of which 75 percent were purchases made on local retail sites, while 25 percent were on cross-border sites. eCommerce is forecast to grow at a 13 percent compounded annual growth rate for the next five years.
Many brick-and-mortar retailers in Hong Kong are adopting the online-to-offline model (O2O) business operating model to provide a better shopping experience for their customers. On the other hand, online platforms such as HKTVMall.com have opened concept offline stores to find the most applicable online-to-offline retail model for Hong Kong. Cross-border spending is high and is a key element of Hong Kong’s eCommerce comprising 70 percent of the overall market. The most popular cross-border eCommerce sites are those from China, Japan, and Singapore.
As demand for online shopping increases in Hong Kong, the associated delivery infrastructure is already well-established to meet higher delivery volumes. Hong Kong ranks high in the World Bank’s global ranking of logistics capabilities and quality. Many U.S. online sites use Hong Kong as a warehouse and distribution center for delivering orders from customers in the Asia region since Hong Kong is a duty-free port and has many daily flights to countries throughout Asia. The shorter delivery time from shipping out of Hong Kong is often used as a selling point for U.S. online sites. There are also a growing number of online logistic providers in Hong Kong and that have made it easier for SMEs and individual sellers that operate on social media platforms such as Facebook, Instagram, and YouTube to fulfill deliveries. YouTube is one of the most popular platforms in Hong Kong for SMEs and individual sellers to market their products. Live-streaming eCommerce is also gaining traction where customers can view and buy from live online videos often hosted by Hong Kong celebrities. Consumers tune into these videos for suggestions from their favorite celebrity and they can immediately buy the suggested products online.
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.
The Hong Kong Government does not currently have any specific regulations targeting online sales.
Macau: The number of local households using the Internet in 2019 increased by 6,900 year-on-year to 182,300, accounting for 92.3 percent of all households. Internet users aged 3 and above totaled 554,000, up by 5 percent year-on-year. The Internet penetration rate for members of the population aged 35 to 44 and 25 to 34 reached 98.6 percent and 98.0 percent, respectively; and 69 percent of the population aged 55 and above used the Internet, an increase of 5.3 percentage points. Most of those surveyed reported that they use the Internet for communication and online entertainment. Online shoppers rose 30 percent to 123,900 in 2019.
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.