The Hong Kong e-commerce market is expected to expand 40 per cent to reach $25 billion annually by 2023 on the back of consumer adoption of bank transfers and digital wallets.
The projection is based on data collected by financial services technology firm FIS in its Worldpay FIS 2020 Global Payments Report. The report shows Hong Kongers currently prefer to pay for goods by credit card – accounting for 40 per cent of online purchases and 45 per cent of in-store sales – in contrast to Mainland spenders, who overwhelmingly prefer to pay with a digital or mobile wallet.
These habits are changing quickly: bank transfers (growing at a 12 per cent compounded annual growth rate) and digital wallets (growing 11 per cent CAGR) are on the rise in Hong Kong and are set to collectively account for 48 per cent of all online purchases by 2023.
Meanwhile, prepay methods (declining 27 per cent CAGR), debit cards (declining 14 per cent CAGR), and cash on delivery (declining 13 per cent CAGR) are falling out of favour with Hong Kong shoppers.
Similar trends are evident in Singapore.
“Around the globe, as smartphone technology becomes ubiquitous, consumers are shifting their behaviours towards frictionless, mobile shopping experiences,” said Worldpay Merchant Solutions, FIS GM for APAC Phil Pomford. “We expect this trend to continue to grow as digitally native consumers come of age.
“Merchants who are able to navigate these changing behaviours and turn them into engaging online experiences will win in an increasingly competitive marketplace.”
Pomford added that with digital wallets set to account for a third of all purchases in the Hong Kong e-commerce market during the next five years, merchants will need to offer the digital wallets preferred by consumers.
“It’s vital to act now on technological innovation in the payments ecosystem as these trends will only compound over time,” he said.