The popularity of e-commerce has risen in Hong Kong as a result of the coronavirus pandemic, despite the market’s long-standing preference for physical stores.
Analytics firm GlobalData says its research shows that the e-commerce market in the territory will grow at a compound annual growth rate of 9.9 per cent by 2024 to reach US$29 billion. This year, e-commerce payments are likely to show a rise of 13.4 per cent as a result of consumers practicing social distancing.
“While the pandemic led to a decline in consumer spending, this is being partially offset by rise in online spending, as wary consumers continue to stay at home and use online channels to purchase goods,” said GlobalData banking and payments lead analyst Ravi Sharma. “The pandemic has resulted in change in consumer buying behavior too as they are avoiding visiting shopping centres and choosing online platforms for their day-to-day purchases.”
Globaldata expects that the new trend will benefit e-payment software companies such as AlipayHK, WeChat Pay and PayPal, while bank and card companies will capitalise on the shift in consumer behaviour with their own new products. Citibank has already entered into a collaboration with local e-commerce player HKTVmall to establish a co-branded credit card offering exclusive benefits to online shoppers.
“Hong Kong has a robust e-commerce market with high internet penetration and high preference for online shopping among consumers, especially younger demographics,” said Sharma.
“The Covid-19 pandemic further accentuates this shift towards online shopping, supporting the payments market growth in the country”.