Alternative payment solutions are the preferred payment method for e-commerce purchases in Hong Kong (China SAR), collectively accounting for 41.7% share in 2023, reveals GlobalData, a leading data and analytics company.
GlobalData’s E-Commerce Analytics reveals that e-commerce market in Hong Kong grew by 9.2% in 2023 to reach HKD158.3bn ($20.2bn), as increasing number of consumers shift from offline to online purchases. The e-commerce market is expected to grow by 13.1% to reach HKD179.1bn ($22.9bn) in 2024.
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Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, commented: “The e-commerce sales in Hong Kong have been growing at a robust pace, supported by rising internet and smartphone penetration, robust online payment infrastructure, coupled with increasing consumer confidence in online transactions.”
According to the Office of Communications Authority, 98.2% of households had broadband internet connection as of December 2023. 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.
GlobalData’s 2023 Financial Services Consumer Survey reveals that over 85% of consumers in Hong Kong shopped online in the past six months while only 5% of respondents never shopped online.
Among the various tools used for e-commerce purchases, alternative payments are the most preferred. They collectively accounted for 41.7% share in 2023, a trend that is prevalent in many Asian markets. This is mainly owing to factors such as simplicity, speed, and convenience of using them.
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By GlobalDataAlternative payment solutions Alipay and WeChat Pay are increasingly used for online purchases driven by the popularity of Chinese e-commerce sites among the Hong Kong consumers. International payment solutions such as Apple Pay, PayPal, and Google Pay are also present in the market.
Cash accounted for 6.3% of e-commerce purchases
Alternative payment solutions are followed by payment cards, which accounted for 38.6% of e-commerce transaction value in 2023. This can be attributed to convenience, pricing benefits such as cashback, discounts, and reward points as well as instalment payment options available with these cards.
Cash on delivery share is on decline and accounted for a mere 6.3% of e-commerce purchases, due to the growing popularity of electronic payments.
Sharma concluded: “Hong Kong’s e-commerce landscape continues its upward trajectory, poised for substantial growth between 2024 and 2028, with an anticipated compound annual growth rate of 9.1% in transaction value to reach HKD253.7bn ($32.4bn) in 2028. Alternative payment solutions are expected to continue their growth and lead e-commerce payments in Hong Kong.”
