Retail in Asia

In Trends

Embrace online commerce to keep profits “golden”, says PayPal

Hong Kong received a record-breaking number of mainland Chinese tourists in last year’s Labour Day Golden Week, up 21.6 percent over the corresponding period in 2010. However according to recent news reports retailers and financial analysts are predicting a slump this year, with many mainlanders turning their attention to Macau as they eschew Hong Kong for casinos in the gambling mecca.

PayPal suggests Hong Kong businesses to adopt a multi-channel approach to capture both on- and off-line sales opportunities in the Golden Week. "Even if fewer people physically cross the border this year, by embracing online commerce businesses can open up a key channel for increasing sales and growing customer loyalty. Business owners could look to create special offers and deals for their online customers, encouraging consumers to spend via the web no matter where they are," said Kerry Wong, Managing Director, PayPal Hong Kong, Korea and Taiwan.

Having a trusted third-party payment provider is critical, according to Wong, as this indicates to consumers that their credit card details are in safe hands regardless of whichever payment method they use, and in turn encourages them to spend more on the site. For smaller businesses, e-commerce offers a platform with low overheads, which can help them compete with much larger organisations while keeping costs down.

Retailers should also look to embrace mobile commerce as another key channel for reaching new customers, PayPal suggests. According to IDC, 118 million smartphones were shipped in China alone in 2011. In addition, cross-border data plans are becoming increasingly popular, meaning that a growing number of mainland tourists can use their smartphones when visiting Hong Kong without having to worry about extortionate data roaming charges. As a result, an increasing number of people throughout Hong Kong and mainland China are using their smartphones to connect to the internet and conduct activities such as online shopping, no matter where they are travelling.

Although a slump in mainland tourist coming to Hong Kong is expected, business can still target the consumption demands of mainland customers during holidays.