Hong Kong switches to alternate payment methods

New research from GlobalData has found consumers in Hong Kong are using payment methods other than traditional cards or bank transfers to make purchases online, accounting for 43.3 per cent of all e-commerce payments.

This comes as Hong Kong’s e-commerce market grew by 13.7 per cent in 2022 to reach $26.1 billion, as consumers continue to switch from offline to online purchases in the wake of the COVID-19 pandemic.

GlobalData’s analytics revealed the e-commerce market is also expected to grow by another 11.6 per cent to hit $29.1 billion in 2023.

“E-commerce sales in Hong Kong have been growing at a robust pace, supported by rising internet and smartphone penetration, robust online payment infrastructure, and with increasing consumer confidence in online transactions,” Kartik Challa, Senior Banking and Payments Analyst at GlobalData, said.

“The pandemic accelerated this shift in consumer preference from brick-and-mortar to online channels. Furthermore, online shopping festivals such as Black Friday, Cyber Monday, and Singles’ Day have also contributed to the overall growth of e-commerce in Hong Kong.”

The data firm’s 2022 Financial Services Consumer Survey found 90 per cent of consumers in Hong Kong said they had shopped online in the last six month, while only nine per cent indicated they had never.

This comes as alternative payment methods such as Alipay, WeChat Pay, Apple Pay, PayPal and Google Pay continue to cement their market share as the popularity of Chinese e-commerce sites continues to grow.

“Alternative payment solutions are followed by payment cards, which account for 37.3% of the e-commerce transaction value in 2022,” Challa said.

“This can be attributed to convenience, pricing benefits such as cashback, discounts, and reward points, as well as instalment payment options available with these cards.

“Hong Kong will continue to witness high growth in e-commerce sales, which are forecast to grow at a compound annual growth rate (CAGR) of 10.2% between 2022 and 2026 to reach HKD300.4 billion ($38.4 billion) in 2026. Alternative payment solutions are expected to continue their growth and dominate e-commerce payments in Hong Kong.”