With the number of consumers shifting from offline to online purchases, Hong Kong’s e-commerce market, which grew by 13.7% to reach $26.1 billion in 2022, is expected to grow by 11.6% to reach $28.98 billion in 2023.
According to a recent Financial Consumer Survey by GlobalData, alternative payment solutions are developing as the preferred payment method for e-commerce purchases in Hong Kong, the financial hub of Asia, collectively accounting for a 43.3% share in 2022.
In fact, more than 90% of consumers in Hong Kong have shopped online in the past six months, while only 6% of respondents indicate that they have never shopped online, the survey showed.
Among various tools used for e-commerce purchases, the survey also revealed that alternative payments are the most preferred in many Asian markets, mainly owing to factors like the simplicity, speed, and convenience of using them.
Alternative payment solutions – Alipay and WeChat Pay – are increasingly used for online purchases, driven by the popularity of Chinese e-commerce sites among Hong Kong consumers, the survey found. International payment solutions, such as Apple Pay, PayPal, and Google Pay, are also present in the market.
Alternative payment solutions are followed by payment cards, which account for 37.3% of the e-commerce transaction value in 2022, which the survey attributed to convenience, pricing benefits, such as cashback, discounts and reward points, and instalment payment options available with these cards.
“The share of cash on delivery is on the decline and accounts for a mere 5% of e-commerce purchases, due to the growing popularity of electronic payments,” the survey findings said.
Kartik Challa, senior Banking and Payments Analyst at GlobalData, said that e-commerce sales in Hong Kong have been growing at a robust pace, supported by rising internet and smartphone penetration, robust online payment infrastructure and increasing consumer confidence in online transactions.
“The pandemic accelerated this shift in consumer preference from brick-and-mortar to online channels. Furthermore, online shopping festivals, such as Black Friday, Cyber Monday, and Singles’ Day, have also contributed to the overall growth of e-commerce in Hong Kong,” Challa said.
Challa further said: “Hong Kong will continue to witness high growth in e-commerce sales, which are forecast to grow at a compound annual growth rate of 10.2% between 2022 and 2026 to reach $38.29 billion in 2026. And alternative payment solutions are expected to continue their growth and dominate e-commerce payments in Hong Kong.”
However, Statista, an online platform specialized in market and consumer data, which offers statistics and reports, market insights, consumer insights and company insights, said that revenue in the Hong Kong’s e-commerce market is projected to reach $22.33 billion in 2022.
Revenue is expected to show an annual growth rate (CAGR 2022-2027) of 14.26%, resulting in a projected market volume of $43.49 billion by 2027.