Hong Kong Overview
Hong Kong has maintained its position as one of the world’s leading digital cities with one of the highest internet penetration rates at 93percent. According to a 2022 survey on internet usage conducted by the Hong Kong Census and Statistics Department 96.1 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 99.7percent are currently accessing the Internet through their smartphone device.
The survey highlighted the ubiquitous smartphone usage amongst persons above aged 10 and above at 98.2percent. 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 from 94.2percent from the previous year to 96.5percent.
According to Statista, revenue in the e-commerce market in Hong Kong is projected to hit US$20.32 billion in 2023. This represents annual growth rate of 9.42percent as user penetration hits 80.9percent. Comparing to other Asian cities, Hong Kong is considered an early e-commerce adopter. Besides high internet connectivity, the Hong Kong population live in highly connected urban areas, making it a very conducive environment for e-commerce to thrive.
Hong Kong consumers make regular from cross-border sites like Tmall, JD.com, WeChat, and Amazon for all types of products from health and beauty, consumer electronics, fashion, household products, and sports equipment. Besides, cross-border e-commerce sites, Hong Kong TVmall, a local online shopping platform has grown to be the biggest Hong Kong’s biggest online shopping platforms in recent years.
They have benefitted from Hong Kong’s successive COVID lockdowns between 2020- 2022 when the pandemic caused a seismic shift in consumer behavior and after experiencing the convenience of online shopping.
According to the company’s 2022 annual report, the site now has 1.5 million active app users and a Gross Merchandise Value of US$ 1.05 billion, a growth of 26percent compared to 2021 across all major product categories.
Echoing the exponential growth of e-commerce globally, successful online shopping platforms are increasingly focused on developing multiple facets of their business such as investing on their distribution network, logistics, warehousing, marketing and promotion, digital payment gateways and omnichannel retailing. Omnichannel retailing refers to the multi-channel sales strategy that aims to give customers a seamless buying experience across different channels while collecting critical information about their lifestyle and shopping habits. We will increasingly see more e-commerce companies make significant investments to expand their virtual engagement through deployment of AI assistants, live-streaming, and promotion through key opinion leaders.
Besides online shopping, the online food delivery segment has also proliferated, making it one of the pillar industries for the gig economy. The revenue in the online food delivery market is projected to reach US$3.61 billion in 2023, an annual growth of 9.15percent from 2023-2027. In a city where more than 55percent of its residents have used online food delivery services, the two dominant market players are Food Panda and Deliveroo. Both companies have extended their services to include grocery deliveries, an e-commerce vertical that offers express delivery service of daily essential goods in under 30 minutes. The growth in the grocery delivery service segment is substantial as the industry has a projected market volume of US$2.75 billion.
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 ecommerce companies such as HKTVmall is expanding its international merchant reach by offering its third party logistic services. Its subsidiary, Shoalter Technology offers a 24 hour fully automated warehouse 144,000 square feet solution for international brands with local representation.
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.
Resources
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 Overview
Latest figures in 2021 released by the Statistics and Census Service (DSEC) show that household Internet penetration level has reached 97.9 percent, an increase of 3.3 percent from the year before.
Around 98 percent of the population accesses the internet via smartphones. The survey confirmed that the heaviest users are between 15 to 24 years of age and the highest rate of growth is found amongst senior citizens above the age of 65 at 72.1percent, a 6.8percent increase from the previous year of 65.3percent
With proximity to Hong Kong and as well as the Greater Bay Area, Macau is considered a natural extension for established e-commerce players like Tmall Global, JD.com, Pinduoduo, Wechat and Tik Tok to build market share. The Hong Kong- Zhuhai-Macau was completed in 2018 and this created a land linkage for goods to be transported via land from nearby container ports of Hong Kong and Shenzhen. In December 2022, HKTV Mall started selling to Macau and is seeing positive results. The dominant e-commerce player in Macau is Tmall followed by JD.com and TikTok.
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.