How evolving digital economy transforms HK's 'most exciting' industries
PwC and InvestHK report details the role of digital in HK’s e-commerce.
A recent report showed that Hong Kong businesses have been transforming to meet the changing preference of consumers who lead increasingly digital lifestyles.
Invest Hong Kong (InvestHK) and PricewaterhouseCoopers (PwC), in their joint report titled "Explore Opportunities in Hong Kong's Digital Ecosystem,” showed that digital trends have dominated almost every business.
This digital emphasis, according to InvestHK’s Director-General of Investment Promotion Stephen Phillips, “permeates Hong Kong's lifestyle cluster including vibrant areas like e-commerce, food services, and creative industries.”
As Hong Kong’s digital economy continues to improve, businesses are creating new ways to engage with customers online.
In the food industry, for example, is the use of the Cloud Kitchen model.
“Cloud Kitchens are an innovative option for restaurants or caterers to expand to new areas or test new menu concepts without large investments in physical retail locations and equipment,” the report explained.
“With reduced operational costs, restaurants, in turn, are free to offer innovative new menus in strategic neighbourhoods of Hong Kong whilst keeping risks at a minimum,” the report added.
With new avenues for business offered by food and beverage operators and growth in online grocery shopping, Hong Kong’s food services industry is predicted to grow at a robust 5.5% for the next three years.
“Businesses have found ways to innovate, adapt to recent challenges, and reinvent themselves to continue serving customers of the future,” the report stated.
In the creative industries, PwC and InvestHK said there has been a creation of an online-first ecosystem as more consumers demand access to online contact.
The rapid digital adoption amongst consumers has also forced businesses in the industry to reframe their business models.
Advertisers, for example, are shifting to subscription-based models.
The report also stated that by 2024, high-speed mobile internet penetration in Hong Kong will reach 87%, up from 85% in 2021.
In the same year, the over-the-top video market will be able to bypass traditional TV revenues, the report stated.
Given that over 40% of HK’s population shops online weekly and 70% monthly, HK’s eCommerce is expected to nearly double by 2025, with a projected market volume of HK$90.63b.
The report said the growth in e-commerce is because “more players are joining the digital ecosystems,” adopting the O2O model.
“This widespread adoption to meet online demands also gives retailers a competitive edge as they can leverage online platforms to operate 24/7, no longer limited by business hours,” the report said.
“Adopting an O2O model is a rising priority for traditional brick-and-mortar businesses in order to capture increased value from customers,” it added.