Hong Kong shoppers says they still prefer the tactile experience of shopping in retail stores over buying online, despite the surge in e-tailing.
A CBRE consumer survey has found that even though Hong Kong consumers are tech savvy, with a staggering 92 per cent of survey respondents owning a smartphone, the majority still prefer to complete their purchase at a physical store rather than online.
Conducted in August, CBRE’s first-ever Asia Pacific consumer survey sought to identify current and future shopping trends across the region. Approximately 11,000 consumers were interviewed in 11 major cities – including 1001 respondents in Hong Kong.
Joe Lin, executive director, retail services, with CBRE Hong Kong, said that despite the convenience online shopping offers, consumers prefer to visit, pay for and obtain their products at a physical store – and that’s one reason why the Hong Kong retail leasing market has boomed in recent years, despite the rise of online shopping.
“The limited availability of shops at street level in Hong Kong has led to the growing popularity of vertical retail however retailers in high-rise commercial buildings are at a disadvantage as they lack regular foot traffic. Many retailers, therefore, use online promotions as a means to increase exposure and generate sales.”
The survey found that consumers in Hong Kong are generally well versed in uing the web and social media to stay informed of new store openings, latest promotions, and marketing events, with 51 per cent of respondents using social media portals to stay informed.
Despite this trend, says Marcos Chan, head of research with CBRE Hong Kong, Macau and Taiwan, even though the survey results emphasise Hong Kong consumers’ increasing use of online research to inform their purchasing decisions, this does not appear to be translating into online retail sales.
“We see that Hong Kong consumers generally spend more on physical shopping than online – HK$1634 per month for physical shopping, compared to HK$946 per month online. E-commerce is still less popular in Hong Kong compared to other markets in Asia Pacific.”
But CBRE’s researchers expect shopping patterns to change, with 49 per cent of respondents saying they are prepared to spend more online in the next two years, compared to 24 per cent reporting that they will spend more on shopping in physical stores.
“Whilst it appears more respondents will be spending online than offline, the results highlight the fact that Hong Kong consumers are preparing to spend more, whether it be using one format or another,” the researchers conlcuded.
“E-commerce is not expected to pose a threat to brick and mortar retail sales in Hong Kong,” said Lin. “But online consumption continues to trend up and is beginning to influence the local retail market. Retailers are therefore advised to leverage the marketing value of physical stores whilst extending promotions and sales to internet portals in order to capture both traditional consumers and the younger generation.“
He said developers and landlords will need to be more creative in managing the design, promotion and tenant mix of shopping centers, taking into consideration the preferences of consumers, in order to compete with the rise of online retail.
The survey showed that Hong Kong consumers place a high importance on the overall experience offered by a shopping destination; thus, malls will need to incorporate more entertainment, food and beverage and special events or exhibitions to attract foot traffic – a strategy that goes well beyond the traditional ‘come and buy’ model.