Most Hong Kongers still snub online shops: survey

Bricks and mortar retailing still dominates.

The bricks and mortar experience is still the preferred shopping choice for Hong Kong consumers, based on the results of a survey.

According to a release from CBRE, even 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.

Conducted in August 2014, CBRE’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.

Joe Lin, Executive Director, Retail Services, CBRE Hong Kong commented on this Hong Kong consumer trend, “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.”

“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.”

The survey 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.

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Despite this trend, Marcos Chan, Head of Research, CBRE Hong Kong, Macau and Taiwan said, “Even though the survey results emphasize Hong Kong consumers’ increasing utilization of online research to inform their purchasing decisions, this does not appear to be translating into online retail sales.

We see that Hong Kong consumers generally spend more on physical shopping than online—HK$1,634 per month for physical shopping, compared to HK$946 per month online. E-commerce is still less popular in Hong Kong compared to other markets in Asia Pacific.

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.

Whilst it appears more respondents will be spending online than offline, the results highlight the fact that Hong Kong consumers are preparing to spend more, whether it be using one format or another.

“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.“

Developers and landlords will need to be more creative in managing the design, promotion and tenant mix of shopping centers, taking into consideration the preferences of consumers, in order to compete with the rise of online retail.

The survey showed that Hong Kong consumers place a high importance on the overall experience offered by a shopping destination; thus, malls will need to incorporate more entertainment, F&B and special events/exhibitions to attract foot traffic—a strategy that goes well beyond the traditional ‘come and buy’ model.