6 Killer Strategies For Increasing E-commerce Conversion Rate
Dive into 6 powerful strategies, rooted in behavioural science and empirical data, to boost your e-commerce conversion rates.
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The Hong Kong e-commerce landscape is changing at a rate and in ways that many people have never imagined before.
With many shops and malls spread across the city, shopping is an undeniable part of Hong Kong culture. Recent advancements in technology and the changes brought by the pandemic have nevertheless displayed how shopping in Hong Kong is changing and advancing to new heights.
To illustrate this, FORTRESS’s online shop allows you to purchase all things digital without having to travel to any of their physical stores, and HKTVmall has nearly everything, from food and clothing to insurance.
e-Commerce in Hong Kong is apparently in full swing, so knowing the latest trends, statistics, and sites for e-commerce can help you navigate the future of online shopping in Asia’s world city.
Although all e-commerce industries across the globe are essentially built on the buying and selling of goods and services over the Internet, the culture and infrastructure of Hong Kong have given birth to consumer behaviors unique to the city.
Going over some statistics about Hong Kong e-commerce can therefore help you get a grasp of how online shopping works in the city. Let’s get started!
According to a report released by the Research Office of the Legislative Council Secretariat, Hong Kong’s information and communications technology infrastructure has helped facilitate the development of e-commerce, since the region had a mobile phone penetration rate of 316% as the year 2020 began.
The same report described how the Covid-19 pandemic had “enticed more consumers to shift their shopping habits online”.
Owing to fears of infection, everyone very likely preferred to have goods delivered to their doorsteps so they could avoid going outdoors too much and risking exposure to the virus. The numerous lockdown and social distancing rules unique to Hong Kong must have played a role in encouraging a shift to online shopping as well.
A study by PayPal in fact showed that online shoppers in Hong Kong spent more on groceries and personal hygiene products as the pandemic began. The industry would go on to generate US$19.61 billion in revenue during that very year.
In 2018, Hong Kong boasted a 59.8% e-commerce penetration rate, and the figure was expected to increase to 72.6% by the end of 2022. In other words, more than half of the city’s population has already engaged with online shopping in one form or another.
As for the market size of e-commerce in Hong Kong, it was roughly 4.5 million in 2021, with the estimated revenue from online shopping being nearly US$7.6 billion. Unsurprisingly, revenue generated from this booming industry is still growing, and is projected to reach some US$11.3 billion by 2025.
A J.P. Morgan report and Zookram report revealed that credit cards and digital wallets are the two most popular payment options in Hong Kong, with each method representing 49% and 25% of all e-commerce sales respectively.
Today, each resident of Hong Kong has a variety of non-cash payment options to choose from, be it Alipay, PayMe, WeChat Pay, Apple Pay, or the Octopus that nearly everyone in the city has.
Clearly, cash is no longer the king of payment. The convenience of tapping one’s card or phone on a payment terminal outweighs the apparent comfort of carrying around bills all the time.
Hong Kong’s distinct location gives it easy access to both mainland China and the rest of the Southeast Asian region, which are key markets in the e-commerce industry.
Against this backdrop, cross-border sales account for about 60% of all e-commerce spending in Hong Kong, with 75% of the city’s online shoppers buying goods and services directly from mainland China.
Singapore and Japan are other popular destinations for Hong Kong’s online shoppers.
A wide array of e-commerce sites are available for the avid shoppers of Hong Kong, offering an even greater array of products and services, ranging from travel and electronics to beauty cosmetics and fashion clothing.
As such, surveying ten of the most popular e-commerce sites frequented by the city’s consumers would help inform the strategy of your own online business. Now let’s see what they’ve got.
Topping off the list as Hong Kong’s leading e-commerce platform, HKTVmall had approximately 4.6 million monthly web visits in the fourth quarter of 2020. It currently serves as a reliable marketplace for hundreds of thousands of buyers and sellers in the region.
Electronic appliances, sports gear, cosmetics, insurance and other supplies can be purchased on HKTVmall’s mobile app or website. As Hong Kong’s “one-stop shop” platform, HKTVmall has every aspect of people’s lives covered, making it the go-to destination when the locals are in need of anything.
What’s noteworthy about HKTVmall is its founder’s foresights and emphasis on robotics and e-commerce automation since an early time — the company started using smart warehouse technologies back in 2018, at a time when e-commerce wasn’t yet popular in Hong Kong.
Early adoption of automation technologies nonetheless proved beneficial to the online business. During periods of rapid growth, orders on the platform surged and reached an average of close to 60,000 orders per day in the first quarter of 2022.
With increased order numbers came mounting pressure on e-commerce fulfillment, but the shopping platform handled it well.
It’s thanks to the automated pick and pack systems, sorters and autonomous vehicles in HKTVmall’s warehouses that operational efficiency stays at optimal levels and fulfillment costs are kept to a minimum, enabling the online mall to thrive and pursue further growth.
Tmall.com is an online retail website owned and operated by the Alibaba Group of China.
Once known as Taobao Mall, the platform caters to nearly 4.4 million web visitors every month with its product categories of beauty and care, food and health, clothing and apparel, and digital devices among others.
Both Chinese and international retailers utilize Tmall to reach customers across the region of Greater China, and Alibaba’s own Alipay digital wallet and payment app serves as the most popular payment method on the said website.
Tmall Global or Tmall.hk even has features set up to provide over 26,000 digital merchants from 84 countries with both wholesale and retail business solutions in the Chinese market.
Founded in 1975 as a small electrical appliances shop in Fortress Hill, FORTRESS now hosts more than 70 physical stores in both Hong Kong and Macau, along with an extensive online store that makes the search and purchase of electrical appliances all the more easier.
Going along with Hong Kong shoppers’ appetite for convenience and immediacy, FORTRESS has committed to an O+O platform strategy intended to create a “seamless offline plus online shopping experience”. Customers can now order on the store’s website or mobile app, and pick up their goods in-store on the same day or next day.
Their apps on the App Store and Play Store likewise allow customers to enjoy the latest digital products and promotions, be it the newest rechargeable GoPro Camcorder or a HK$200 student discount on a Marshall Speaker.
Being the first business-to-consumer e-commerce company to be successfully listed on the Hong Kong Stock Exchange, the YOHO Group of Hong Kong is another leader in the region’s e-commerce industry.
The YOHO Group adopted an “online-merge-offline” (OMO) business model similar to that of FORTRESS, where their products are available on both their online shop and their two physical stores in Cheung Sha Wan and Kwun Tong.
Their 820,000 registered customers can also choose to pick up their purchased computers, appliances or lifestyle products from over 2,000 pick-up points across Hong Kong.
The group reportedly recorded the “highest online retail sales of consumer electronics and home appliances” among all e-commerce sites in Hong Kong during the 2020-2021 financial year.
From Shiseido perfume to Avène aftershave, nearly every manner of beauty and personal care products can be found in the navigable and expansive pages of the Strawberrynet website.
Free shipping and other rewards are even offered to every new customer for their first order on the e-commerce site.
The online health and beauty store carries more than 800 top beauty brands and 36,000 total products for its millions of customers from over 200 different countries.
24 years of service has led them to develop a platform that enables them to now start delivery within 24 hours of placing any order, so that customers enjoy a more fun shopping experience with more products, better deals, and better service.
For all things fashion and apparel, ZALORA is the go-to site for millions across Southeast Asia and Hong Kong.
ZALORA Hong Kong presently offers a selection of more than 50,000 products from over 500 local and international brands, making it a leader in online fashion shopping.
“Skirts to suits, sneakers to slip-ons, sportswear to watches, and so much more” are available on ZALORA and can be returned with a full refund even after 30 days (provided that the product in question is still in a suitable condition).
In addition to helping customers with their style journeys, the company has also dedicated much of its efforts towards the creation of a sustainable fashion ecosystem.
ZALORA takes into account the social and environmental impacts of its operations, and aims to inspire its customers to adopt sustainable fashion choices as well.
MyDress is yet another online shopping platform for those in Hong Kong who are seeking out their fashion fix.
The platform was created in 2013 and primarily offers a selection of high-quality Japanese, Korean and Taiwanese underwear, beauty, and lifestyle products.
Stylish shoes for the summer to shawls for the winter season can be bought on MyDress using their variety of payment methods, including Alipay HK, Tap & Go, WeChat Pay, and HSBC HK’s own PayMe.
Their performance throughout the years has also garnered them recognition from Deloitte, Yahoo!, and the Hong Kong Information Technology Association.
MyDress’ Taiwan branch was officially established in 2019, and their sister platform MyFood.hk started selling Taiwanese food and snacks back in 2020.
Samsung, Sony, Xiaomi and Apple products are among the many big name brands one can find when visiting Suning’s online shop.
Suning currently maintains over 1,600 retail stores in mainland China, Hong Kong, Macau and Japan. Those looking for a new Whirlpool washing machine or Panasonic air conditioner can likewise visit their online store for quality service, genuine security, and free shipping on orders over HK$349.
Regular updates about the latest products and promotions are also available on Facebook and YouTube, though they also maintain a presence on Weibo and WeChat for its customers in the Greater China region.
Those simply seeking to get their groceries and daily necessities more conveniently can alternatively visit Ztore.
Hong Kong shoppers can buy their groceries on the online platform anytime during the day without having to queue at a physical supermarket, and have their entire purchase delivered to their doorsteps, thereby saving time and labor.
Ztore offers approximately 2,000 local brand products, and they even have free home delivery for orders over HK$499.
Loyal customers of this particular e-commerce website can then sign up for the Zmile Club where they can earn rebates, get the latest news about hot-selling products, and enjoy exclusive monthly member rewards.
In fact, shoppers can earn Z-Dollars as well, where 1 Z-Dollar = HK$1 of in-store rebate.
Arguably the oldest brand on the list, Broadway serves as a trusted e-commerce site in Hong Kong for those seeking out the latest technology products.
Mr. Li Bo opened up a small shop on Nathan Road in 1949 that would eventually grow into the encompassing Broadway store we know today.
In 2017, Broadway Lifestyle was launched to provide an online and offline shopping experience for customers looking for the latest tech and lifestyle products.
Now, they offer a diverse assortment of items online, from e-sports equipment to digital cameras and yoga mats to smart watches. Customers can pick up their purchases at the many Broadway stores in Hong Kong, and they may enjoy bank offers and promotions from time to time as well.
Certain key trends become evident when observing the top e-commerce platforms in Hong Kong. Ranging from similar payment methods to business models, each online shopping site apparently relies on a variety of practices that seem to help encourage e-commerce growth and ease-of-use.
Wondering where e-commerce in Hong Kong is headed? Read on and find out about the five key trends to watch for!
Gone are the days when customers queued and made cash deposits at ATMs for their online purchases at mom-and-pop stores. A whopping 90% of Hong Kong people now use mobile wallets for payments.
The growing popularity of e-wallets, such as Alipay HK and WeChat Pay in Hong Kong can be attributed to their features that make cashless payments all the more convenient. The HKSAR government’s stimulus vouchers given to citizens exclusively through digital wallets played a part, too.
More than 4.7 million users across the city have adopted some of the aforementioned digital wallets by the end of 2021, and the said number is only expected to increase. If your online business hasn’t yet set up an account with any of the digital wallet providers, it’s time to get them.
As its name suggests, buy now pay later (BNPL) allows buyers to make purchases now but pay for them later. This is done by splitting the bills into several interest-free installments. BNPL services are often offered through apps or platforms, such as Atome and Hoolah in Hong Kong.
The BNPL mode of payment not only makes online purchases more affordable, but also enables users to track their monthly spending more easily as they can view their purchase records in their mobile apps.
Many of Hong Kong’s major e-commerce players, such as Ztore, YOHO and Strawberrynet have already partnered with BNPL platforms to incentivize customer purchases on their online platforms. Are you joining the party?
The adrenaline rush of buying from your favorite brand with a limited-time discount is hard to resist, isn’t it? That’s the psychology behind live streaming e-commerce.
In live streaming shopping, a host — usually a celebrity or influencer — would promote a brand’s products through a live video.
Unlike conventional ways of online shopping, live streaming e-commerce welcomes potential buyers to tune in, comment on the products and ask questions with the host, making it a fun and interactive shopping experience.
As a trend originating from mainland China, the practice of live stream selling was recently picked up by digital merchants in Hong Kong.
HKTVmall, for example, hosts regular live streams on its Facebook channel to showcase the latest products that customers can enjoy.
The online shopping platform also provides attractive limited-time offers exclusively for their live stream audience, stimulating purchases with discounts combined with a sense of urgency.
The business-to-business (B2B) and business-to-consumer (B2C) markets are the conventional ways by which brands make sales, but the direct-to-consumer (D2C) model has been gaining traction due to its apparent efficiency.
A D2C model essentially allows brands to sell their products directly to consumers without the need for the usual retailers and distributors, thereby also allowing more attention to be given to the overall customer experience.
For instance, ASUS, the computer and electronics company, deployed both B2B and D2C models using Adobe Commerce and they experienced a notable increase in their orders and annual revenue, by 59% and 56% respectively.
A study published back in 2021 even forecasted that the online retail value of D2C platforms in Hong Kong would reach HK$29.1 billion by 2026, compared to HK$15.9 billion in 2021.
That being said, Adobe recommended against a full-on adoption of D2C e-commerce, and a combination of different models may instead be needed to properly cater to customer interests and requirements.
The concept of online-to-offline (O2O) has been around for some time, but it wasn’t widely adopted by Hong Kong’s digital merchants until recent years.
With O2O, customers get the benefits of online shopping but avoid the potential drawbacks of it.
To be specific, customers enjoy the convenience and flexibility of shopping 24/7, but they don’t have to wait for the parcels to arrive, nor do they have to bear the risks of product loss or damage during e-commerce transit.
In Hong Kong, examples of O2O commerce in action are FORTRESS, HKTVmall and YOHO, all of which have brick-and-mortar stores for buyers to pick up their goods at.
e-Commerce is clearly here to stay in Hong Kong, given its current overall value and vast potential for the future of retail and shopping in Asia’s world city.
But as Hong Kong’s e-commerce landscape becomes increasingly crowded and competitive, businesses must work extra hard to grow and stay on top of competition. Some e-commerce businesses choose to pivot to D2C models, whereas other digital merchants launch new product lines or even expand across borders.
If you work in one of those fast-growing e-commerce businesses, Choco Up could be your trusted growth partner. With flexible funding, global payment solutions and growth analytics tools, we help businesses succeed on their own terms and expand at scale.
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Dive into 6 powerful strategies, rooted in behavioural science and empirical data, to boost your e-commerce conversion rates.
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