Despite Hong Kong's high internet and smartphone penetration, the bricks and mortar experience is still the preferred shopping channel for Hong Kong consumers, according to the latest CBRE consumer survey.
Conducted in August 2014, the real estate company's first-ever Asia-Pacific consumer survey sought to identify current and future shopping trends across the region. Approximately 11,000 consumers were interviewed in 11 major cities, including 1,001 respondents in Hong Kong.
The survey found that though Hong Kong consumers are tech savvy, with 92% of survey respondents owning a smartphone, the majority still prefer to complete their purchase at a physical store rather than online.
“Consumers preferring to visit, pay and obtain their products at a physical store is one reason why the Hong Kong retail leasing market has boomed in recent years, despite the rise in online shopping,” commented Joe Lin, Executive Director, Retail Services, CBRE Hong Kong.
“The limited availability of shops at street level in Hong Kong has led to the growing popularity of vertical retail however retailers in high-rise commercial buildings are at a disadvantage as they lack regular foot traffic. Many retailers, therefore, utilize online promotions as a means to increase exposure and generate sales,” he added.
The survey also found that consumers in Hong Kong are generally well versed in utilizing the web and social media to stay informed of new store openings, latest promotions, and marketing events, with 51% of respondents using social media portals to stay informed.
This, however, does not appear to be translating into online retail sales, according to Marcos Chan, Head of Research, CBRE Hong Kong, Macau and Taiwan.
“We see that Hong Kong consumers generally spend more on physical shopping than online — HK$1,634 ($210.60) per month for physical shopping, compared to HK$946 ($121.90) per month online. E-commerce is still less popular in Hong Kong compared to other markets in Asia-Pacific,” he said.
Despite this, shopping patterns are expected to change, with 49% of respondents saying they are prepared to spend more online in the next two years, compared to 24% reporting that they will spend more on shopping in physical stores.
“E-commerce is not expected to pose a threat to brick and mortar retail sales in Hong Kong,” said Lin. “But online consumption continues to trend up and is beginning to influence the local retail market. Retailers are therefore advised to leverage the marketing value of physical stores whilst extending promotions and sales to internet portals in order to capture both traditional consumers and the younger generation.“