By Cathy Yan
Online shopping in Hong Kong lags behind other highly developed markets, due to the city’s density and the relative ease with which consumers can buy goods in stores, according to the Boston Consulting Group, which was commissioned by search giant Google Inc. to conduct a study on how the Internet has influenced Hong Kong business.
Despite Hong Kong’s advanced network infrastructure, it ranked 13th in the study’s global e-Intensity Index, a measurement of Internet enablement, expenditure and engagement. Denmark, South Korea and Japan led the list of 46 countries. The United States ranked 11th.
Hong Kong supports more than 4.8 million Internet users and has a household broadband penetration rate of 82%. Its average broadband speed, at 8,200 kilobits per second, is also one of the fastest in the world. But the study showed that Hong Kong’s Internet expenditure, which includes e-commerce, is below average for developed countries.
The study also projects the growth of Hong Kong’s Internet economy—consisting of online shopping, e-commerce, and investments in the Internet— at 7% a year—outpacing the city’s forecast gross domestic product growth rate of 4%.
The Internet economy contributed 5.9% of Hong Kong’s total GDP in 2009, the report said, putting the territory on par with the U.S. and several northern European countries, which have Internet-economy contribution rates around 6%-7%.
The study, named “Connected Harbor: How the Internet is Transforming Hong Kong’s Economy,” is part of a global series by BCG and Google. The Hong Kong study is the first in Asia.
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