Hong Kong retailers amp up online sales capacity

The online penetration rates in Hong Kong remain relatively low and have ample room to grow compared to other APAC markets such as Mainland China and Korea.

Platforms such as Shopline are on the rise as they help retailers to turn online.

Hong Kong retailers amp up online sales capacity

Local retailers are responding to the current environment by increasing investment in online and delivery apps and 80% said they will boost their social commerce capacity. “More retailers have shifted sales capacity and consolidating brickto digital sales channels to sustain their and-mortar store networks, according businesses during this period. The to CBRE Research’s latest Asia Pacific online penetration rates in Hong Kong Retail Flash Survey. remain relatively low and have ample

During Q1, most of major APAC room to grow compared to other retail markets, including Hong Kong APAC markets such as Mainland SAR, recorded a contraction in retail China and Korea,” said Ada Choi, sales, and 87% of APAC survey head of occupier research in Asia respondents identified loss of sales as Pacific and head of research in Greater their top concern. To support longChina at CBRE. term business growth, 78% of them The role of digital sales channels has plan to invest more in online retailing significantly and rapidly changed in retail business in the past few months. About 31% of the APAC respondents now view online sales as their core business from 9% the pandemic.

Where landlords’ response to relief measures are concerned, all respondents from Hong Kong said they have been offered some relief measures by landlords. Nevertheless, these respondents would like landlords to be more accommodative with regards to the relief measures.

“Apart from negotiating rental discounts, landlords typically provide marketing support, such as shopping promotion campaigns, CRM programs, parking discounts, to support tenants and attract local customers. The local consumer spending power still has ammunition. Whilst retail footfall is recovering as the outbreak is contained, customers are usually incentivised to spend with appropriate marketing efforts,” said Lawrence Wan, senior director of advisory & transaction services–retail at CBRE Hong Kong.

Wan also added that the demand for healthcare, education and daily groceries remained stable in Hong Kong and that a number of international brands and retailers are looking for the right time to enter the market, considering the increased availability of prime spots, lower rents and reduced operational costs.

“We may see more new retailers branching out to Hong Kong in H2 or early 2021,” added Wan.

COVID-19 TO DRIVE DIGITAL PAYMENTS TAKE-UP IN HONG KONG

Pandemic-stricken Hong Kong consumers are increasingly taking up mobile wallet solutions for in-store payments as they seek ‘safer’ alternatives to paying for their purchases, a caution brought about by the COVID-19 pandemic, reports data and analytics firm GlobalData.

Consumers are switching from in-store to online purchases in order to avoid exposing themselves to disease vectors such as cash and POS terminals, noted GlobalData. For example, Hong Kong-based e-commerce platform HKTVmall reported a 165% increase in the number of orders in February 2020 compared to the same month in the previous year.

The shift in payment attitudes is also reflected in the increase of use of mobile wallets, as these solutions are arguably ‘safer’ due to the lack of physical contact with foreign objects. Electronic payments firm Octopus announced that its mobile wallet usage increased by 20% and 30% in January and February, respectively.

“Both ATM card withdrawals and card payments in Hong Kong are set to grow at a more subdued pace through 2023. Revised forecasts predict that the ATM cash withdrawals value will grow at a subdued compound annual growth rate (CAGR) of 1.2% between 2019 and 2023. Similarly, card payments value will rise at a CAGR of 4.7% during the same period, a slower pace than the previous estimates.

ATM and cash withdrawals payments value from 2016-2023

Source: GlobalData