Jenny Chan 陳詠欣
Nov 3, 2016

Hong Kong consumers remain resistant to ecommerce: KPMG/GS1 research

Hong Kong consumers still have "strong intentions to buy from physical stores", casting doubt on their acceptance of the Singles' Day push next week.

Tmall Hong Kong promises free shipping for this year's Singles' Day pilot
Tmall Hong Kong promises free shipping for this year's Singles' Day pilot

HONG KONG - A Hong Kong-focused report on ecommerce, jointly initiated by GS1 and KPMG and conducted by YouGov surveyed 225 CEOs and 1,000 consumers in both Hong Kong and China.

Hong Kong consumers "steadily hold strong intentions to buy from physical stores", Anna Lin, chief executive of GS1 Hong Kong, said at an event presenting the research yesterday, pointing to data from last year.

Even when we look ahead to the next two years, Hong Kong shoppers still prefer to "shop and pick up in-store" because of physical convenience," she added. China is the other way round, with mainlanders favouring online orders delivered to their homes.

This year, Alibaba has expanded its Singles' Day festival, in terms of ecommerce infrastructure, logistics and payments systems, to Hong Kong and Taiwan for the first time. However, Hong Kong's contribution to Alibaba's sales will "probably not be huge", predicted Anson Bailey, head of consumer markets at KPMG.

Trust and consistency issues are among the top challenges of online shopping in Hong Kong. About half of respondents (47 percent) expressed concerns about potential discrepancy of size and colour, about one-third (35 percent) said product information is insufficient, and about one-fifth (20 percent) said search results for product information are inconsistent.

Also, given the density and compactness of the city, having a parcel arrive a few days or even one week after ordering online is deemed unacceptable, and has inhibited the growth of ecommerce in HK, remarked Piotr JJ Szymanski, regional director of YouGov Asia Pacific.

In Hong Kong, the average delivery time is around three to seven working days, compared to China's same-day delivery in urban areas.

“In particular, Hong Kong needs to keep pace with the new trend towards the digitalisation of the entire logistics and payment systems, along with marketing services, and not lag behind other countries and, especially, mainland cities,” said CK Pak, COO of Convenience Retail Asia, operator of the familiar Circle K convenience stores and Saint Honore cake shops in Hong Kong. Pak was one of the 225 CEOs surveyed.

If Hong Kong may fail Alibaba, Southeast Asia may be a more significant revenue driver. Yesterday's Redmart acquisition by Alibaba's Lazada is "certainly laying the groundwork for a bigger push into Southeast Asia, and an increasingly intensifying battle between Amazon and Alibaba", said Ken Mandel, president of innovation and commerce at Publicis Media Asia Pacific.

The deal gives Alibaba'a Lazada a "solid delivery and logistics capability to deliver in hours, not days", he added. Similar to Hong Kong, delivery time is a key competitive lever in the West and will become more important in SE Asia. 

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