Market Trends of Hong Kong E-commerce Industry
This section covers the major market trends shaping the Hong Kong E-commerce Market according to our research experts:
Increase in Internet Penetration Across the Country is Fueling the Growth of the Market
- With the increase in internet adoption across the country, the penetration of online retailing is growing. According to the world bank, internet users in Hong Kong accounted for 92.4%, 91.7%, and 90.5% of the country's population for 2020, 2019, and 2018, respectively.
- According to a survey conducted by the Government of Hong Kong in 2020, over 2.01 million households in had PCs, representing 75.3% of all households in the country, and 100% of those households had an internet connection for their PCs.
- Businesses in the country are adopting the online-to-offline model (O2O) to meet the demand for goods in the online marketplace. According to Shopline, an e-commerce solutions and customized services company, more than 50% of its e-commerce Hong Kong retailers have physical stores.
- With such a rise in the adoption of e-commerce, the region is witnessing significant growth, and it is expected that traditional brick-and-mortar retailers are willing to adopt the online-to-offline model as this can benefit them by selling products 24/7.
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Fashion Segment Accounts for Significant Share
- In recent times fashion retail has become very competitive, as major brands in the business are boosting e-commerce operations in order to develop online shopping in the country. Further, online shopping enables retailers to adopt technologies such as Big data analysis, which allows the company to grasp the fashion market with information and analysis of the user trends.
- Also, advancements in technology and an increase in the efficiency of logistics have enabled logistical companies to provide services at a lower price. As most of the orders in e-commerce are made up of small batches, the cost of logistics used to be very high. Several apparel companies operating in the region have focussed on achieving higher logistic support in order to gain customer satisfaction with deliveries.
- In recent times logistical companies charge very less for small batches than in fashion e-commerce orders and also offer services such as collection, inspection, and repackaging of returned goods which enables the customers an added advantage to make fashion purchases online.
- The increase in internet adoption has enhanced the social media landscape in the country. Social media such as Facebook, Instagram, and other platforms are not only used for connectivity but to keep up with the latest fashion trends and to research the products to purchase.
- With a high user penetration rate for Facebook, Instagram, and other platforms, many fashion companies in the country have increased focus on brand advertising and user engagement through social media as reviews play an important role in e-commerce, with a significant portion of consumers reading online reviews of products prior to purchase.
