Unlike Chinese Shoppers, Hong Kong Customers Are Very Hesitant to Shop Online
While the Chinese people can’t help but do most of their shopping online, people in Hong Kong will rather not shop online. The FIS 2019 Retail Global Payments Report which was done last week shows that only 4% of Hong Kong retail shopping was done online -- this is in comparison to the 24% of online shopping done on the mainland.
In this report, over 10 countries were surveyed for both offline and online retail shopping—this includes China, Japan, the UK, and the US. This survey covered over 50% of the global retail e-commerce and physical transactions respectively. The average of all the countries measured was over 9%.
Digital Wallets Dominating the Market
This report also showed the increasing use of digital wallets like PayPal, Alipay, and WeChat Pay in countries like China. It also showed that shoppers in China made use of a large number of digital wallets that accounted for over 60% and 40% of e-commerce and in-store payments respectively.
Over 90% of mobile payments were made with Alipay and WeChat Pay, this puts them as the front runners in the market-- cash transactions, on the other hand, had a value of about 21%. The financial platform Alipay is under the Alibaba Group Holding financial affiliate (Ant Financial). This holdings company also owns the South China Morning Post,
The Mobile Commerce Development Delay in Hong Kong
Reports have shown that Hong Kong is lagging in mobile commerce development. Compared to the average globally, Hong Kong’s projected rates are behind. Compared to Chinese shoppers, Hong Kong shoppers were also reported to be hesitant to move to digital wallets. Despite the inevitable predictions that digital wallets and online retail will take over retail in Hong Kong, shoppers are still very reluctant.
A study carried out by MasterCard in 2018 showed that a common concern of Hong Kong shoppers was the security of the online payment platforms as well as the merchant's standings. An earlier 2016 survey showed that over 20% of people in Hong Kong are reluctant to shop online because of data privacy reservations.
A 2019 report showed that the worries have not disappeared as an IT service provider called Tofugear stated in its report that data security and privacy are two leading concerns hindering the use of digital wallets in Hong Kong.
Analysts in Hong Kong noted that the easy reach of stores was a major reason why online shopping isn't taking off in the country. A former retail analyst for Tofugear, Tiffany Lung also stated that the proximity of the shops in Hong Kong made it easier for shoppers to get what they want rather than ordering online and having to wait for shipping.
Projection of Mobile Commerce in Hong Kong
According to the FIS report, mobile commerce in Hong Kong has a projection to grow to over 30% from 16% in four years. Also, the e-commerce retail business is expected to grow by over 18% to reach approximately $4 billion by 2022. A 2019 report done by Tofugear showed that cash, credit card, and Octopus card were the major payment methods for in-store Hong Kong shoppers.
Octopus card which was first introduced in 1997 in Hong Kong is a major reason for the restricted demand for offline digital wallet payments according to this report. This report also stated that a large number of people in Hong Kong had digital wallets but they are the least used payment method in the country. Alipay, on the other hand, is the most popular digital wallet used in Hong Kong –it is reported by Tofugear that two-thirds of the people in Hong Kong using digital wallets make use of Alipay.
Wariness of Other Countries to Digital Wallets
Singaporeans are another set of people that are reluctant to make use of digital wallets although the value of e-commerce purchases made with these digital wallets is about 20%. 8% of the total sales value was accounted for by online retail in Singapore while in-store cash transactions accounted for 40%.
In 2018, Digital wallets accounted for over 30% of the retail e-commerce value in the world – which is one of the popular payment methods for shopping online. However, cash is still leading especially for traditional retail stores.
According to reports, cash accounted for over 30% of the value of the entire transactions carried out. The second most popular payment method according to the report was Debit cards. This payment method accounted for about 27% while digital wallets are reported to account for just about 12%.Source