Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
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 2019, over 2 million households (compared to 1.99 million in 2014) in Hong Kong had PCs, representing 77.6 percent of all households in Hong Kong. Among them, some 2.04 million households (compared to 1.92 million in 2014) had their home PC connected to the internet, representing 100 percent of all households in Hong Kong. The survey also showed significant growth of the percentage of persons aged 10 and above who had used internet service increased from 79.9 percent in 2014 to 91.7 percent in 2019. 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. It is reported that close to 5.9 million persons aged 10 and above had smartphones in 2019. The percentage of persons aged 10 and above who had used smartphones for connection to the internet reached 99 percent in 2019 compared to 94.7 percent in 2014.
On the business side, IT usage has also increased steadily. Based on the most recent government survey, in 2019, a total of 81 percent of business establishments used computers and 90.3 percent of business establishments used the internet.
E-Commerce is on the rise. In 2019, 38 percent of Hong Kong companies had their own websites, up from 34 percent in 2017. The proportion varied from 88 percent for large companies (those employing more than 100 people) to 34 percent for small companies (those employing fewer than 10 people.)
According to the Hong Kong Government’s survey on IT usage and penetration in the business sector in 2019, business receipts from selling goods and services or information through electronic means amounted to US$63 billion in 2018, representing 5.7 percent of the total business receipts of all industry groupings in 2018. About 61 percent of the e-commerce receipts were received via an online ordering facility on the website or mobile application of the respective establishments, 22 percent were received through a third-party website or mobile application, and 16 percent were received through electronic data transmission. Individual consumers accounted for 60 percent of the total e-commerce sales.
The growing desire for online shopping has prompted many traditional Hong Kong retail stores to establish online platforms, such as Wing On Department Store, Yue Hwa Department Store, and Chow Sang Sang jewelry. On the other hand, online platforms such as HKTVMall have opened concept offline stores to find the most applicable online-to-offline retail model for Hong Kong. Among the most popular online stores in Hong Kong are Taobao, Tmall, WeChat, Amazon and JD. People aged below 30 are the most active e-shoppers, but consumers aged 30-49 spend the most online. The average annual online spend is estimated at US$1,992. Travel, health and beauty, and consumer electronics are typically the top three e-commerce purchases in Hong Kong. The key reasons prompting online purchases are price and the convenience of shopping anywhere and at any time. Approximately 75 percent of Hong Kong’s online shoppers have made purchases on overseas platforms.
Following the outbreak of the pandemic in the first two quarters of 2020, and the Hong Kong Government’s social distancing measures restricting the number of patrons in each restaurant, ordering food online has become very popular. Food delivery platforms like Deliveroo, Foodpanda and Ubereats have all been experiencing increased sales and increasing numbers of restaurants joining as merchants.
Currently only a quarter of Hong Kong’s population shops online and e-commerce accounts for just 11 percent of Hong Kong’s total retail sales. Hong Kong lacks a rural population that would rely on e-commerce for a wider choice of products. In addition, shopping malls are open seven days a week and are easily accessible to the population. Brick-and-mortar retailers have been able to secure business without innovating significantly since they have enjoyed booming sales from the influx of Chinese tourists in the past. However, in response to recent social unrest and COVID-19, retailers are starting to realize that e-commerce is their key to survival.
As demand for online shopping increases in Hong Kong, the 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 the U.S. online sites.
The Hong Kong Government does not currently have any specific regulations targeting online sales.
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 e-commerce business services providers are available in Hong Kong. The Hong Kong Trade Development Council (HKTDC) website listed a range of e-commerce business service providers.