• Innovation & Transformation
    • Digital Adoption

Riding the wave of global cross-border e-Commerce: Insights for Hong Kong businesses

  • Article

More and more people are choosing to shop online in the post-pandemic world, with global e-Commerce sales constantly scaling new heights. While this presents a key opportunity for companies to develop their online trade, industry experts have pointed out that we have yet to realise the potential of e-Commerce markets in regions beyond the US, mainland China and Japan. So how can Hong Kong companies who are looking to venture into cross-border e-Commerce seize these ongoing opportunities and establish a unique edge?

HSBC recently held a seminar, ‘Exploring new horizons: Keys to online business success’, to share invaluable insights on this topic with our customers. A panel of industry experts including Kanju Lin, South China Region Development Manager at Amazon Global Selling and Ken Wong, Founding Director and Director General of the e-Commerce Association of Hong Kong, revealed the latest trends in the global cross-border e-Commerce landscape and offered in-depth analysis of the key markets.

Gen Y and Gen Z: an emerging consumer force

According to Kanju Lin, Amazon’s data shows that the rate of growth in the world’s main e-Commerce markets is currently above 10%. Projections indicate that by 2024, global retail e-Commerce sales will reach a staggering USD65 trillion1, accounting for 21.2% of all global retail sales. Amazon also predicts that global cross-border e-Commerce sales will double within the next five years2.

What’s more, Amazon’s research reveals that younger consumers prioritise digital experiences and have significant purchasing potential, making them the strongest emerging consumer force in cross-border e-Commerce. Globally, 57% of Gen Y (born between 1982 and 2000) and 61% of Gen Z (born between 1995 and 2009) consumers choose to shop on cross-border e-Commerce platforms3, and Gen Y’s online consumption power is already USD2.5 trillion4. As a consequence, traditional retail companies need to pursue transformation more proactively, capturing business opportunities by tapping into the online market and adapting to the evolving shopping habits of young consumers.

Global cross-border e-Commerce sales trends


Hong Kong businesses can tap into robust e-Commerce platforms

Currently, there’s a wide array of e-Commerce platforms offering tailored, streamlined operating models to different markets and customer segments. These may provide an enticing gateway for companies who are looking to expand their e-Commerce business, but how should local businesses take the first step and strategically explore overseas opportunities? Kanju Lin shared that the North American e-Commerce industry, with its mature infrastructure and huge size, is the preferred starting point for many for the following reasons:

  • Vast market: The North American e-Commerce market has a long history, and many overseas e-Commerce platforms have a strong presence there.
  • Robust support: Platforms in North America address merchants’ and sellers’ concerns promptly, making it easier for newcomers to get started.
  • Clear and diverse product categories: North American e-Commerce platforms categorise products clearly, and online shoppers in the region have preferences for particular subcategories. This requires e-Commerce companies to carefully consider a range of product features and select suitable product types to list on the platform based on their strengths, market demand and marketing strategies.

Product categories preferred by North American consumers

Electronics  The local market in North America demonstrates strong sales and demand for smart home products, tablets and accessories, making electronics a leading category on online e-Commerce platforms. Given the fast-paced nature of this industry, sellers and merchants need to be highly responsive to market demands.

Fashion apparel  Consumer preferences are influenced by platform traffic, fashion culture and seasonal factors. Supply chain management and effective inventory planning are crucial.

Household goods  Non-electronic household items, such as bedding, furniture, bath and cleaning products are frequently purchased by North American consumers, who prioritise cost-effectiveness and personalised design when making their purchasing decisions.

Gardening supplies  This includes gardening and outdoor products, with corresponding peak seasons throughout the year.

  • An easier path to expansion: Canada and the United States share similar consumer cultures and high purchasing power, while Mexico has a large population and varied product preferences. The shared cultural heritage and geographical proximity of these three countries creates an environment in which new sellers entering the market can grow with relative ease.

Hong Kong can leverage its unique strengths

Comparing Hong Kong with its neighbours, Ken Wong, a seasoned cross-border e-Commerce expert with over 15 years of experience, stressed that Hong Kong is superior in terms of economic development and made an earlier start in e-Commerce. However, in recent years, Hong Kong’s progress has been slower than neighbouring markets. The factors hindering the growth of cross-border e-Commerce in Hong Kong include:

  1. A shortage of e-Commerce talent in Hong Kong
  2. Fragmented development in the e-Commerce industry, with less information exchange and communication among e-Commerce players than there is in mainland China
  3. Immature industry development, with inadequate suppliers and service support for e-Commerce models

To foster development in its cross-border e-Commerce industry, Hong Kong should deal with the above challenges while taking strategic advantage of its unique strengths. Hong Kong is backed by the vast mainland market, and mainland China is the world’s largest retail e-Commerce market5. By 2022 mainland China’s cross-border e-Commerce market had grown to RMB15.7 trillion6, with 165 comprehensive pilot zones established7. Hong Kong serves not only as an international trade hub but also as a trading and logistics centre in the Greater Bay Area. Its role as a ‘super connector’ linking mainland China with the international markets positions Hong Kong to turn the enormous market potential into boundless opportunities by assisting mainland e-Commerce in the expanding overseas markets and by making it easier for international brands to join mainland platforms.

Empowering growth through comprehensive banking solutions

To respond to the challenges faced by the local e-Commerce industry, in recent years many financial institutions have enhanced their digital banking services to meet the evolving needs of SMEs, including e-Commerce businesses. At HSBC, we’re dedicated to supporting customers with our all-in-one banking solution for e-Commerce. We’ve designed this comprehensive digital solution to help customers drive the growth of their cross-border business. The solution includes HSBC Merchant Box, HSBC Business Debit Mastercard®, comprehensive FX services and HSBC Merchant Financing Programme.

For cross-border wealth management, HSBC Merchant Box is an all-in-one platform designed to help companies handle cross-border payments and collections in the world’s major currencies. Real-time FX rates allow businesses to seamlessly manage their cross-border e-Commerce transactions, international payments, collections and supply chain matters. Meanwhile, HSBC Business Debit Mastercard allows companies to make purchases in major currencies anytime, anywhere – with business spending easy to control through the platform.

In terms of financing, with customer’s consent, HSBC Merchant Financing Programme makes use of the commercial data of merchants on HKTVmall, Cainiao, Amazon and other platforms for credit assessment. This makes trade financing much faster and more convenient, uplifting our customers’ capital and financial liquidity.

As consumer behaviour patterns around the world continue to evolve, online shopping will become even more integrated into everyday life. Regardless of their industry sector, businesses should deepen their understanding of the e-Commerce landscape and adapt their strategies accordingly. It’s only by doing so that companies will be able to thrive and stay competitive in the digital age.

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