Shirley Yuen, Chief Executive Officer of the Hong Kong General Chamber of Commerce looks at how Hong Kong is taking advantage of the stores of the future.
As one of the world’s most tech-savvy and connected populations, Hong Kong has everything in place for embracing e-commerce. Hong Kong possesses many intrinsic qualities necessary for taking up e-commerce – high smartphone penetration rate, densely populated urban areas, fast adoption of new technology, free flow of capital and information, and business flexibility and adaptability. Brick-and-mortar merchants should thus step out of their comfort zone to sell through online channels because the stores of the future will be those that successfully mesh the physical retail experience with the digital world.
Growing trend for online shopping
Data provided by Statista showed that e-commerce sales for Hong Kong have been steadily increasing from US$2,919 million in 2015 to an estimated US$3,710 million in 2017. E-commerce sales are forecast to continue rising with an annual growth rate of 10.2 percent to reach US$5,465 million by 2021.
According to another survey conducted by KPMG China and GS1 Hong Kong during the third quarter of 2016, about half of Hong Kong consumers said they plan to make more purchases in the next two years via their mobile phones than they had previously.
Physical meets digital
The growing desire among Hong Kong consumers for online shopping has driven more Hong Kong merchants to merge online and offline retail to provide a seamless experience for consumers. Many traditional stores have established online purchasing platforms, such as Watsons, Wing On Department Stores and Chow Sang Sang. For instance, Chow Sang Sang set up an e-shop in 2000, when e-commerce had not even kicked off yet. Last year, the company’s e-commerce turnover reached US$900 million.
“Mainland China will remain the world’s largest retail e-commerce market, with sales estimated at US$899 billion last year, representing almost half of digital retail sales worldwide.”
While some traditional businesses are venturing into online retailing, e-commerce platform HKTVmall has opened small concept stores in North Point and South Horizons. The stores, which are an experiment to find out the most applicable online-to-offline retail model in Hong Kong, mainly serve as interactive billboards aimed at showcasing products available on HKTVmall to shoppers and enticing them to order them online, boosting its online shopping business.
Indeed, online shopping brings a new user experience to consumers and makes life more convenient. We can search online for clothing, food, housing and transportation through Taobao, get special deals from Groupon, buy tickets from Ctrip, book a hotel directly from Airbnb and hire a car from Uber. The world’s shops, products and services are at our fingertips, which further drive the need for greater connectivity.
Expanding into Mainland China
The boom in cross-border e-commerce with Mainland China also offers huge room for growth for Hong Kong’s e-commerce sector. According to eMarketer’s worldwide retail forecast, Mainland China will remain the world’s largest retail e-commerce market, with sales estimated at US$899 billion last year, representing almost half of digital retail sales worldwide. Chinese consumers have a strong desire for imported goods, which presents a new window of growth for Hong Kong retailers.
Looking ahead, e-commerce will continue to thrive in Hong Kong as it makes shopping easier than ever. Online and offline shopping will become two sides of the same coin, so businesses – willingly or unwillingly – have to widen the diversity of their selling points both online and offline to stand out in this competitive world. ◆