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Summary of Outlook for E-commerce in Hong Kong

Core Content

This document provides an analysis of the outlook for e-commerce in Hong Kong, based on a survey conducted by KPMG China and GS1 Hong Kong, in association with YouGov. The survey includes perspectives from both Hong Kong CEOs and consumers, highlighting the growing importance of e-commerce and customer-centric strategies in the region.

Main Points

E-commerce Growth and Integration

• E-commerce popularity is rising, with more Hong Kong businesses adopting online and offline integration (O2O).
• CEOs are increasingly prioritizing e-commerce and omnichannel strategies. In 2017, 89% of CEOs expected some revenue from e-commerce or omnichannel operations, up from 80% in 2016.
• A significant number of CEOs plan to increase e-commerce investments by over 20% in the next 12 months, indicating a strong commitment to digital transformation.
• Omnichannel strategies are becoming more widespread, with 57% of CEOs using both physical stores and online retail websites, up from 32% and 34% in 2016.

Customer-Centric Approach

• Customer experience is central to business success. CEOs emphasize improving the consumer journey, creating a consistent brand experience across channels, and personalizing the shopping experience.
• Customization and personalization are seen as highly beneficial, with 46% of CEOs believing they would significantly help their business.
• Consumers are looking for authenticity and stories behind products, which is influencing brand strategies.

E-commerce Platforms

• Hong Kong businesses are diversifying their e-commerce platforms, with a majority selling on platforms like Taobao, Tmall, JD.com, and Amazon.
• Facebook is the most popular social media platform for customer engagement and sales, with 76% of CEOs using it for engagement and 53% for sales.
• WeChat is the second most popular platform for both engagement and sales, with 48% and 35% of CEOs using it respectively.

Digital Technologies

• Barcode and GTIN identifiers remain the most widely used technology, with 82% of CEOs utilizing them.
• Big data, AI, and IoT are being increasingly adopted to enhance customer insights and operational efficiency.
• Mobile commerce is gaining traction, with 51% of companies using mobile-friendly websites in 2017, up from 38% in 2016.

Challenges

• Bridging the offline and online worlds is the biggest challenge for CEOs, with over a third indicating the need to up-skill existing staff.
• Lack of talent was a major concern in 2016 but has decreased in 2017, suggesting a shift in focus.

Case Studies

• HKIA (Hong Kong International Airport) is actively integrating e-commerce into its operations, including an upgraded mobile app for O2O shopping and plans for a logistics center to support e-commerce growth.
• Bossini, an apparel retailer, emphasizes the importance of O2O strategies and big data in enhancing the consumer experience and driving growth.

Key Information

• Survey Methodology: Two surveys were conducted — one with 500 Hong Kong consumers and 500 mainland China consumers, and another with 162 Hong Kong CEOs.
• Survey Period: September to October 2017 for consumer survey, August to September 2017 for CEO survey.
• Main Trends:
  • E-commerce is becoming a core part of business strategies.
  • Social media is a critical channel for customer engagement and sales.
  • Technology such as AI, VR, and big data is seen as a key enabler for innovation and customer personalization.
  • Omnichannel integration is gaining momentum, with 55% of CEOs using social media in their strategy in 2017.
• Future Outlook:
  • The future of retail in Hong Kong is expected to be driven by digital innovation and customer-centric approaches.
  • Online festivals, such as Singles' Day, are playing a significant role in boosting online sales.
  • GS1 Global Standards are seen as a way to enhance data quality and improve trust in the supply chain.

Strategic Recommendations

• Focus on customer experience and personalization.
• Leverage data analytics and digital technologies to better understand consumer behavior.
• Develop mobile-first strategies to integrate e-commerce and payment processing.
• Enhance social media presence to interact with customers and build brand awareness.
• Invest in omnichannel platforms to provide a seamless shopping experience across all touchpoints.

Conclusion

The e-commerce landscape in Hong Kong is evolving rapidly, with businesses embracing digital transformation and customer-centric strategies to stay competitive. While challenges remain, particularly in integrating the physical and digital worlds, the opportunities for growth are substantial. The role of technology, especially in enhancing customer experience and operational efficiency, is becoming increasingly vital. With the support of global standards and strategic collaborations, Hong Kong's retail sector is well-positioned to thrive in the digital age.