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Online Retail – A Study on Hong Kong Consumer Attitudes, Business Practices and Legal Protection
Online retail is less prevalent in Hong Kong than in many other well developed economies, but it is growing steadily. According to the Government's Census and Statistics Department the "percentage of people that had shopped online in the last 12 months" rose from 7% in 2004 to 16% in 2009 to 23% in 2014. An online shopping penetration of UK (81%), the US (78%), Germany (73%), Japan (69%) and Mainland China (67%). In these countries growth in online retail has arisen because online retailers, especially the large platforms like Taobao or Amazon, offer a wider range of products that are often cheaper than on-street shops. Once consumers become accustomed to shopping online they experiment with a wider variety of goods and services, and tell their friends and families about their good experiences.
In these countries there are a number of sectors where online retail is already dominant, such as air travel and hotels and computers and electrical appliances. Innovations by online retail are changing the way people shop in these sectors, for instance allowing consumers to access information on airplane seating availability in real-time. Underpinning this are profound changes in commercial arrangements between production and distribution especially the growth of large, often global, online retailers and platforms.
With globalisation such trends will no doubt increasingly occur in Hong Kong. Therefore, it is important to understand consumers' and retailers' experience of online shopping so far, and their readiness to adapt to the future trends. Another motivation for this study is to understand how the current regulatory framework, which was designed prior to the emergence of the online retail environment, can be adjusted to make it suitable for the new challenges that arise for consumers from online retail marketing and transactions.
This report publishes results from the Consumer Council's (The Council's) study on online shopping in Hong Kong. It looks into online shopping's prevalence, any detriments faced by consumers, and the commercial and legal environment in which online retail is conducted. The report puts forward key recommendations to help ensure promote consumer safeguards, as online shopping continues to develop.
The Council conducted a range of different analyses to better understand online shopping in Hong Kong. These included:
- On-street survey of 1,010 people all above the age of 15 who had used the Internet in the past 12 months;
- Review of consumer complaints against online traders received by the Consumer Council between 2013-2015;
- Interviews with 27 entities including one regulatory body, trade associations and firms selling goods and services online;
- Reviews of the websites and terms & conditions of 23 e-retail websites;
- Mystery shopping of goods/ services from 15 websites to experience the delivery and returns process; and
- Legal review looking at the legal safeguards protecting consumers undertaking online shopping in Hong Kong and several other major economies.
 Census and Statistics Department, (2015). Thematic Household Survey Report No. 54. [online] Available at: http://www.statistics.gov.hk/pub/B11302542015XXXXB0100.pdf [Accessed on 4 July 2016](aged 15 and above).