Hong Kong, 17.10.2023

Hong Kong's tech market shows recovery amid economic challenges

The consumer tech and durables industry in Hong Kong is experiencing a transformative phase, driven by fast evolving market trends, and shifting consumer behavior. Despite facing economic headwinds, Hong Kong continues to maintain its status as a regional hub for technological innovation and development.

In the first half of 2023, Hong Kong's tech and durables market experienced a 7 percent decline in unit sales and 2 percent decline in market USD value.

Seizing Opportunities in Hong Kong:

According to Mukund Tripathi, APAC Head of Market Intelligence for Tech & Durables, GfK, “Hong Kong's tech and durables market presents numerous growth opportunities. Sectors aligned with convenience continue to attract consumer interest, and as the market evolves to meet changing consumer preferences, industry players are encouraged to be proactive and flexible. Understanding the intricacies of Hong Kong's market and aligning strategies accordingly will be essential to unlocking its full potential in this dynamic and evolving marketplace.”

Resilient Sectors in Hong Kong's Market:

Certain sectors within Hong Kong's tech and durables market have proven to be more resilient than others. Notable performance variations in key subsegments during H1 2023 vs. 2022 (in Value USD Terms) include:

Consumer Electronics (TVs, soundbars, etc.): -12 percent
Telecom (Smartphones, etc.): +6 percent
IT (Mobile PCs, hardware, etc.): -22 percent
Small Domestic Appliances (Fryers, mixers, etc.): -17 percent
Major Domestic Appliances (ACs, ovens, etc.): Flat
Photo Appliances (Camera, Camcorder, etc.): +41 percent

Retail Landscape Transformation in Hong Kong:

Online sales continued to grow post-pandemic in Hong Kong, signaling a continued shift towards e-commerce as consumers increasingly embrace online shopping. In the first half of 2023, online sales grew 3 percent while traditional sales declined.

The retail ecosystem in Hong Kong offers further opportunities for online growth, including multiple payment options, omni-channel retail developments, attractive online-only promotions by e-commerce giants, and efficient logistics and delivery services.

Convenience and Affordable Premiumization in Hong Kong:

Products that offer greater convenience have shown strong growth in Hong Kong. For instance, sales of washing machines with automatic dispensers grew by 29 percent, exceeding the 5 percent growth rate of overall washing machines. Furthermore, while overall refrigerators declined by 10 percent, refrigerators with smart applications and voice control grew by 17 percent. These are aligned with smart home trends for greater convenience demanded by the discerning consumers in Hong Kong.

While the demand for premiumization is not as robust this year compared to 2022, high-end models within affordable premium price ranges continue to outperform the market average. For instance, while the overall Hong Kong TV market is down 20 percent in the first half of 2023 compared to the same period last year, the sales volume of premium TVs over 75 inches increased by 7 percent. In the telecom sector, overall smartphone sales grew by 6 percent, while those with larger than 256 GB of internal storage grew by 49 percent.

Strategic Purchases and Promotions in Hong Kong:

Given ongoing cost-of-living challenges, consumers in Hong Kong are becoming more discerning in their purchases, prioritizing affordability, and value. Further challenges such as typhoon season and increasing competition from neighboring China have to be considered to attract consumers to purchase at home.

Promotions have emerged as a compelling factor in Hong Kong's market, with events like the Hong Kong Shopping Festival run by large retailers in April. In the second half of the year, events such as “back to school” in July and Christmas period would be important milestones to capture sales.

About the method

Through its retail panels, GfK regularly collects POS data in more than 70 countries worldwide for the consumer electronics, photography, telecommunications, information technology, office equipment, and small and large household appliances sectors. All figures are according to GfK panel market, with global data excluding North America and presented in US dollars, except stated otherwise.

Through its distribution panel, GfK regularly collects sales data in more than 40 countries worldwide for products in the consumer electronics, photo, telecommunications, information technology, office equipment segments from around 300 distributors / wholesalers. B2C refers to the business to consumer channels of distributors.

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