Hongkongers are the world’s most reluctant online shoppers, but try stopping the Chinese

  • Tech News
  • Monday, 21 Oct 2019

The report found that Hong Kong lags behind in the development of mobile commerce – shopping via mobile phone – both now and in projected growth rates, compared to global averages. — SCMP

Hongkongers just won’t shop online, while the Chinese can’t get enough of it.

Only 4% of overall retail spending in Hong Kong was conducted online, compared to 24% on the mainland – the highest of any nation, the FIS 2019 Retail Global Payments Report showed two weeks ago.

The report surveyed online and offline retail payment patterns of people in 16 countries, including Japan, China, the US and the UK, covering 80% of global retail e-commerce and 60% of physical transactions. The average of all nations surveyed was 9.7%.

The report showed that digital wallets – such as Alipay, WeChat Pay and PayPal – continue to grow in usage, particularly in China. Chinese shoppers used digital wallets in record numbers, accounting for 64% of e-commerce and 40% of in-store payments.

Alipay and WeChat Pay are the dominant mobile payment providers in China. Photo: Shutterstock

Alipay and WeChat Pay dominate the market, accounting for more than 90% of mobile payments. Just 21% of the value of offline retail transactions was in cash.

Alipay is the payments platform under Ant Financial, the financial affiliate of Alibaba Group Holding, which owns the South China Morning Post.

The report found that Hong Kong lags behind in the development of mobile commerce – shopping via mobile phone – both now and in projected growth rates, compared to global averages. Hong Kong shoppers also show continued reluctance to switch to digital wallets compared to China. This is despite repeated predictions that online retail and digital wallets would inevitably take over Hong Kong retail.

A 2018 study by Mastercard found that Hong Kong shoppers’ biggest concern was security of payment facilities and the reputation of the merchant, ahead of the price of the item. An earlier survey from 2016 shoppers found that 30% of Hongkongers who do not shop online were worried about data privacy.

Those concerns have not gone away, as a 2019 report on Hong Kong retail payments by Tofugear, a IT services provider for retailers, noted the top two concerns preventing more digital wallet usage were privacy and data security.

Analysts agree that Hong Kong’s dense environment, which puts brick-and-mortar stores within easy reach of customers, as one of the main reasons why online shopping has been slow to take off.

“The close proximity of shops in the city allows consumers to get what they need quicker than it would be to wait for shipping,” said Tiffany Lung, a retail analyst formerly with Tofugear.

Meanwhile, mobile commerce in Hong Kong is expected to grow from 16% of online purchases to 34% in the four years to 2022, while Hong Kong’s e-commerce retail business is projected to grow by more than 18% to almost US$4bil (RM16.73bil) in the same period, according to the FIS report.

Tofugear’s own 2019 report on payments in Hong Kong said that the top three methods of payment for in-store shoppers was cash, Octopus card or credit card.

The report noted that the success of the Octopus card, first introduced in Hong Kong in 1997, limited the demand for digital wallet payments offline. Nine out of 10 Hongkongers have a digital wallet the report said, but that they are used less than other payment methods, including cash.

Alipay is currently the most popular of the digital wallet systems in Hong Kong, used by two-thirds of Hongkongers with digital wallets, according to Tofugear.

Singaporeans also remain wary of digital wallets, with just 20% of the value of e-commerce purchases made using digital wallets. Online retail in Singapore accounted for 8% of the total value of sales, while 40% of in-store transactions were conducted in cash.

Globally, digital wallets accounted for 37% of retail e-commerce value in 2018, the most popular method of payment for online shoppers.

For traditional bricks-and-mortar retail, cash remains king globally, accounting for 32% of the value of all transactions, the report said. Debit cards were the second most popular at 27%, while digital wallets accounted for 12%. – South China Morning Post

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Business , China Business , Money , Wealth , Tech , E-Commerce , SCMP


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