Hong Kong's shoppers flee to online refuge

By Maija Pesola in London and Justine Lau in Hong Kong, FT.com site

Published: May 05, 2003

Like many Hong Kong companies, cosmetics seller Sa Sa International Holding had abandoned the idea that online sales would ever be a big part of its business.

After all, Hong Kong has a reputation as a consumers' paradise, where many people list "shopping" as a favourite hobby. The city's compactness, convenience and plethora of malls have made it a place where people like to shop face-to-face.

All that has changed, however, since the outbreak of Sars in the territory in mid-March. "With Sars, people have realised that shopping online can help them buy things in the safety of their homes," said Sa Sa spokesperson Macy Leung.

Sa Sa's online sales in the second half of March rose 25 per cent compared with the first half of the month and have continued to increase in April.

Web surfers have been snapping up surgical masks, hand moisturiser (because all of that hand washing dries out the skin), thermometers and anti-acne products to combat oily skin from mask wearing.

This is a marked turnaround from the recent past, according to Peter Steyn, director of Nielsen Net/Ratings Hong Kong, which tracks online activity in the region.

"People in Hong Kong love to go shopping - it is part of the culture. But they love to feel and touch the things they are buying," says Steyn.

In the US, for example, an estimated 62 per cent of internet users had purchased products online as of October last year, compared with only 18 per cent in Hong Kong.

However, preliminary data from Nielsen Hong Kong indicate big increases in traffic to e-commerce websites such as Ebay and Amazon and Yahoo Hong Kong's virtual mall in April as panic about the virus began to take hold.

"The increase wasn't initially that great, because people were rushing out to buy things that were in short supply. But now they are spending more time at home, and they are coming on to the internet more," said Arthur Chow, Yahoo Hong Kong's manager of business and marketing.

According to preliminary figures by Nielsen, Yahoo, the most frequently visited site, saw a 16 per cent jump in visitor numbers, while visitors to Ebay increased 25 per cent, and Amazon user numbers jumped 23 per cent. Yesasia.com, an Asia-based online retailer that sells everything from CDs and comics to cuddly toys, has seen a 60 per cent increase in traffic.

People are also spending more cash when they get to these sites. Comparing the second week in April to the second week in March, for example, the volume of transactions and revenues on Yahoo's shopping sites rose 120 per cent, said Mr Chow.

Hot selling items include groceries and bleach - used to sterilise homes to help stop the disease spreading. Park N Shop, Hong Kong's largest supermarket chain, is reporting a 30-35 per cent rise in online sales since March.

As people avoid crowded cinemas and concerts, they are also buying more CDs and DVDs over the internet. The three-week closure of Hong Kong schools, also led to an increase in purchases of video games and visits to games sites.

Not all e-commerce sites have benefited. The flip side of increased DVD sales is a 34 per cent decrease in traffic at cinema.com.hk, the site for booking cinema tickets online.

But overall, e-tailers are hopeful that these exceptional times will create a lasting shift in Hong Kong's consumer behaviour.

"This is acting as a catalyst, pushing people who have not tried before to shop online for the first time," said Mr Chow. "Maybe, if they are satisfied with the service, they will continue."