As an international business hub, Hong Kong has solidified itself as one of the most dynamic markets for eCommerce. The city’s digital ecosystem has developed rapidly with no sign of stopping. And the people of Hong Kong are increasingly adopting the digital lifestyle.
This article will give you a glance at the prosperity of the digital retail industry in Hong Kong. BBCIncorp will walk you through the key metrics of Hong Kong’s eCommerce, from consumers, and revenue, to long-term growth. Let’s dive into it!
Hong Kong eCommerce is vastly booming
There is no doubt that Hong Kong is a prime market for eCommerce with a solid economic foundation. The city’s eCommerce industry is surging thanks to various reasons.
Firstly, Hong Kong is one of the most friendly international business environments. PwC reported that Hong Kong was ranked the world’s freest economy in 2021. With its transparent regulation and attractive tax regime, it is no surprise that entrepreneurs keep choosing Hong Kong to build their eCommerce businesses.
Secondly, the retail sector, the base of eCommerce, is among the cores of Hong Kong’s economy. Hong Kong Census and Statistics Department reported that retail generated a fifth of the city’s GDP in 2020. Along with constant digital development, eCommerce is exponentially strengthened in Hong Kong.
Furthermore, Hong Kong is the regional logistic center of Asia. It has a quick and efficient world-class logistic system. The city’s excellent logistical quality makes it a wonderful destination for eCommerce businesses to grow.
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Fascinating statistics about Hong Kong eCommerce consumers
Hong Kong is an incredible retail market full of digital-savvy shoppers.
Numbers don’t lie. In particular, KPMG recorded that over 97% of customers in Hong Kong use smartphones, and about 40% shop online every week. With an average annual spend of nearly HK$15,004, Hong Kong shoppers are the second-highest spender in Asia-Pacific according to PwC. And the numbers show no sign of slowing down.
Key metrics of eCommerce revenue in Hong Kong
eCommerce is generating immense revenue for Hong Kong’s economy.
According to the latest report of Statista:
- The total revenue from eCommerce will reach US$25,500 million by the end of 2022, resulting in an annual growth rate of 14.18%.
- The market volume is also expected to be US$1,412,000. million in 2022.
The chart below illustrates the estimated annual revenue of Hong Kong eCommerce through different segments from 2017 to 2025.
Also, Statista predicted the average revenue per user will amount to US$1,568. In addition, Hong Kong’s eCommerce user penetration rate is 76.7% in 2022. As the line chart shows, the average revenue per consumer is steadily surging over the years and is projected to keep increasing in the future.
Major eCommerce merchant segments
The top five largest segments of eCommerce in Hong Kong according to Statista are fashion, consumer electronics, personal care, furniture & appliances, and food & beverage. Among these segments, fashion is expected to be the largest segment with a projected market volume of US$312,200 million in 2022.
So if you are planning to kick-start your eCommerce business in Hong Kong, you should consider one of the segments above.
COVID-19 brings more opportunities for Hong Kong’s eCommerce
The Coronavirus has caused severe damage to Hong Kong’s economy in general. However, the pandemic has also created enormous room for eCommerce to grow as Hong Kong has recovered sharply from the pandemic.
As a result of COVID-19, consumers in Hong Kong have remarkably increased their use of digital platforms to shop for goods. In figures, 75% of shoppers admit they frequently buy goods online and 97% will continue shopping online (KPMG 2020). The numbers solidly prove that there’s rising demand for eCommerce in Hong Kong.
Shoppers are willing to splurge on goods online with brands that they trust. Furthermore, shoppers highly value a pleasant digital experience. That’s why they are likely to spend more on companies that provide a good online shopping experience. Therefore, besides the product’s quality, maintaining the consistent quality of digital platforms is crucial for brands engaging in eCommerce.
The future growth of eCommerce in Hong Kong
With escalating demand for online shopping, Hong Kong eCommerce is heading for sustainable long-term development. And there are supporting numbers for the future growth of the digital economy in Hong Kong.
According to Statista, the market size for eCommerce in Hong Kong is expected to almost double by 2025. In particular, the number of online shoppers is forecasted to hit more than 6.5 million. The market volume is likely to reach US$12,879 million and user penetration will hit 83.3% in the next five years.
In particular, the illustration below demonstrates the steady future growth of Hong Kong’s eCommerce market size through the previous years and in the next years.
Currently, Mainland China is where the jurisdiction generates the highest revenue in eCommerce. But in the next five years, ASEAN will be a not-to-miss market for eCommerce businesses based in Hong Kong. The region has a growing large population, high smartphone penetration, and non-stop rising consumer expenditure. With a total population of over 667 million, ASEAN is forecast to be the world’s fourth-largest economy by 2030 (PwC, 2021).
Furthermore, the jurisdiction has a strategic geographical location. It takes less than 5-hour time flight from Hong Kong to any ASEAN nation. Therefore, South East Asia countries offer eCommerce companies in Hong Kong an incredible potential for future expansion.
In a nutshell, Hong Kong is one of the most ideal places to base your eCommerce company. The city is a dynamic international business hub with a robust digital infrastructure and exceptional logistic system. It also has an enormous pool of tech-savvy and high-demand consumers. Countless opportunities are there for you to grab. So don’t hesitate to start your eCommerce business in Hong Kong.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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