PayPal Forecasts Hong Kong Online Commerce To Reach HKD55.4 Billion By 2020
In the last 12 months*, 3.9 million Hong Kong consumers spent HKD30.7 billion shopping online with 75% of shoppers having made cross-border purchases
Hong Kong, November 29, 2018 ― Hong Kong is set for an online commerce boom, with spending expected to hit HKD55.4 billion by 2020, and total online spend achieving 27% year-on-year growth, reaching HKD38.9 billion by the end of 2018, according to PayPal’s Cross-Border Consumer Research 2018 report for Hong Kong.
PayPal also found that a large proportion of increased online commerce spending is coming through from mobile shoppers, with mobile commerce growing at a faster rate of 37% year-on-year compared to total online commerce (27%).
By 2019 it is estimated that more than half of online spending by Hong Kong shoppers will come via the mobile channel.
The research, which was conducted in April 2018 by Ipsos on behalf of PayPal, investigated the online shopping habits of approximately 34,000 consumers in 31 markets, including 1,000 participants in Hong Kong.
“Close to half of online shoppers in Hong Kong will increase their online spending in the next 12 months*, driven by both rising convenience of online shopping and the growing number of shopping platforms,” said William Ip, Director and Country Manager, PayPal Hong Kong, Korea & Taiwan. “Sellers today need to be equipped to not only take their business cross-border and online, but also be on mobile and in-app to create a seamless online commerce experience for shoppers.”
Cross-border shopping dominates online transactions
In the last 12 months*, three in every four online shoppers made cross-border purchases, compared to just one in four shoppers who shopped only from domestic sites.
The majority of shoppers are also open to shopping from overseas, with 71% of shoppers preferring to shop from large global platforms and almost three fifths (58%) trusting overseas online stores as much as stores from Hong Kong. Clothing/apparel, footwear and accessories are the most frequently purchased goods from overseas sellers (83%), followed by toys and hobby-related goods (63%).
While desktops/laptops/notebooks remain the preferred device when shopping, mobile devices account for 33% of online shopping spending, while the number goes up to 37% for cross border purchases. Online shoppers shop cross-border most frequently during seasonal sales (38%) and Christmas (36%).
China is the most sought-after market for cross-border purchases
PayPal’s research also found that, primarily due to better pricing, China beat all other countries to be the top market for cross-border shopping, with nearly half of Hong Kong’s online shoppers (48%) having purchased goods collectively worth HKD3.6 billion from the country in the past year. This is followed by Japan (32%) and the U.S. (30%). Despite ranking second and third, Hong Kong online shoppers spent an estimated value of HKD5.7 billion and HKD2.1 billion on goods from Japan and the U.S. respectively, believing they can get products with higher quality.
Value for money is a priority for shoppers
Despite the popularity of international online shopping among Hongkongers, challenges to cross-border shopping exist. Shipping costs are the top barrier preventing shoppers from buying cross-border, cited by 35% percent of shoppers who do not shop cross-border. Other key factors include difficult process for returning unwanted purchases (32%).
“At PayPal, we understand that online commerce is all about customer experience. We aim to address shoppers’ concerns and endeavor to bring a greater sense of security to online shoppers with Refunded Returns, covering return shipping costs of up to USD20 on eligible transactions even if the reason is simply a change of mind,” William Ip continues.
“Being a Hong Kong-based startup, cross-border e-commerce plays an important role in our business expansion. Today, we sell around the world and 80% of our sales comes from overseas transactions. Online retailers need to deliver seamless, personalized customer experience in order to meet the rising expectations of global customers,” said Wesley Ng, CEO and Co-founder at Casetify.
Security and convenience are key when choosing payment method
Security and convenience are the two major concerns as 34% and 27% of cross-border shoppers respectively, said these are the key factors for choosing their payment method. Among shoppers that cited PayPal as their preferred cross-border payment platform, almost half of them (47%) cited one of their reasons for using it is that it offers a more secure way to pay. Furthermore, 27% said they chose PayPal because they do not want to share their full financial information with the seller.
“Customers’ trust and security are PayPal’s highest priorities. We focus on making people’s lives easier by offering a simpler, more seamless and more secure way to make and accept payments online. Services such as Buyer Protectiondemonstrates PayPal’s commitment as it helps provide greater peace of mind for shoppers when purchasing online,” said William Ip. “As a leader in digital payments and an enabler of online commerce, PayPal partners with merchants to help them capture business opportunities, connecting them with global consumers regardless of place or space. Seller Protection is among the services we offer to help protect merchants against eligible fraudulent transactions such as unauthorized chargebacks, unauthorized claims, unauthorized fraud reversals, items not received chargebacks, etc.”
“PayPal continuously innovates to improve the user experience through new services and features. The recently launched PayPal Checkout promises a more simplified checkout experiences to shoppers by helping them check out directly from product page or shopping bag. This helps enhance customers’ shopping experience. For merchants, it helps reduce cart abandonment and is designed to increase conversion opportunities.”
“While consumers increasingly want to shop online, there remains a real concern when making high value purchases online, especially from overseas websites. Providing customers with a sense of trust and robust security is vital to giving them the confidence to shop online. This is why we offer recognized and secure payment methods such as PayPal, to provide our customers with the assurance that their payment details are secure,” said Christina Zhang, Treasurer, Director of Corporate Strategy at DJI.
*Based on fieldwork conducted between the 5th and 17th of April 2018. See methodology notes for more detail.