Why Hong Kong stands out in digital commerce

To efficiently capture online opportunities, the offline environment matters. Hong Kong’s banking infrastructure, government initiatives, connectivity to the broader region and innovation ecosystem all lend to the city’s reputation as a hub for digital commerce. For businesses eager to get the most out of this massive, ongoing shift online, Hong Kong promises access to leading digital banking and payments solutions designed to meet the ever-rising demands of the modern marketplace.

The recent launch of HSBC’s Digital Merchant Services, which consolidates multiple digital payments options with a single provider, is a case in point and highlights the direction that digital commerce solutions are heading in.

Bringing benefits to all

The old saying that ‘a rising tide lifts all boats’ is a helpful way to visualise the impact that digitisation has had on business. Opportunities have opened up across markets and industries to a remarkable degree.

In 2023, the Hong Kong e-Commerce market reached USD20.5bn (HKD160.3bn) and is expected to balloon to USD32.7bn (HKD255.7bn) by 2028¹. This is compounded by an almost 81% e-Commerce penetration rate among consumers, signalling strong opportunities for businesses set up to do business online².

In Hong Kong, with around 50% of local consumers now preferring online shopping over in-person, businesses going digital have a lot to gain³. Alternative payment methods such as digital wallets are on the rise and accounted for a quarter of all e-Commerce transactions in Hong Kong in 2023. HSBC PayMe, as one of the most popular examples, is preferred due to its convenience, social features and no transaction fees, making it a go-to among digital wallet users.

As consumers increasingly prefer digital transactions, companies need to adapt to prioritise digital-first ways of doing business – a trend that has quickly become the norm.

Making it easy to get started

Continually ranked as one of the world’s freest economies, Hong Kong’s business-friendly environment has long made it a magnet for businesses to set up and oversee their broader regional ambitions. For e-Commerce companies, many of which are small-and-medium enterprises (SMEs), the value of the city’s low and simple tax regime is hard to exaggerate. Depending on revenue volume, taxes can be as low as 8.25%, a significant benefit for businesses looking for growth⁴.

For companies just getting started, setting up an e-Commerce enterprise in Hong Kong can be done in a matter of days, after which it’s important to find a banking partner with the right solutions for your needs.

For our part at HSBC, we’ve been making significant investments in digital commerce solutions tailored for the modern business and marketplace. For example, we launched HSBC Merchant Box to help SMEs manage cross-border e-Commerce flows.

Now, HSBC’s Digital Merchant Services is going a step further by providing businesses with one-stop access to multiple payment methods and a consolidated portal for easy analysis of sales data for decision making – all designed to deliver a more streamlined checkout experience that reflects how e-Commerce is done today.

Investing in the right things

By looking ahead to how business will increasingly be done, and trying to anticipate this in its policies, the government has gone a long way in helping Hong Kong stand out as a hub for digital commerce and a model on how to nurture a bustling e-Commerce ecosystem.

Take, for example, the E-commerce Development Task Force, formed to coordinate the implementation of policies designed to support digital business models. One of its flagship initiatives, E-commerce Easy, provides funding support of up to HKD1m to SMEs for setting up online stores, developing mobile commerce applications, and more – all to ensure SMEs are able to invest in their success in both the Hong Kong and mainland China markets.

Beyond funding, the Digital Transformation Support Pilot Programme is designed to assist businesses in adopting digital payment systems and other solutions necessary for modern retail operations, while the Single E-lock Scheme is focused on streamlining customs processes for e-Commerce transactions.

This is relevant in the broader context of Hong Kong as a key part of the Greater Bay Area and the gateway to mainland China, the world’s largest retail e-Commerce market. Hong Kong is uniquely positioned to help facilitate the staggering RMB15.7tn in cross-border e-Commerce spending originating there⁵. In addition, as an indispensable trading and logistics centre in the Greater Bay Area, Hong Kong is perfectly suited to assist mainland Chinese e-Commerce firms expand overseas as well as global brands access mainland platforms.

A hub for the future

Despite the disruption that digital commerce has ushered into the business world, Hong Kong has actively taken measures to anticipate challenges and put in place policies that will help businesses transition online and thrive once there.

For e-Commerce businesses, Hong Kong is a hub fit for the future. Whether it’s tapping into opportunities locally or connecting to growth globally, Hong Kong has no shortage of advantages to lean into.