Key e-commerce trends to look out for your business in 2024, according to SHOPLINE

Across the retail industry, the fourth quarter through the first quarter is often considered a peak sales period annually as customers rush to shop and prepare for the holiday season. As this was the first prime shopping period in Hong Kong's economic recovery after the pandemic, many businesses have made significant efforts to draw in shoppers and boost sales this year.

In the last quarter of 2023, up until December 15, businesses that ran promotions had a higher Gross Merchandise Volume (GMV) of 128% compared to businesses that didn’t. The three most common promotions included free shipping, cashback incentives and fixed discounts. Similarly, SHOPLINE's Hong Kong E-Commerce Whitepaper 2023 showed that web stores offering discount promotions experienced order volumes 1.7 to 9.5 times higher than their competitors, which just goes to show the appeal of promos to Hong Kong shoppers.

Hong Kong residents are buzzing with a rekindled appetite for shopping, and by looking deeper into the local e-commerce market during peak seasons like Chinese New Year, trends have been uncovered that will shape the retail landscape in 2024. 

These trends will serve as a guiding star for small businesses and established brands, helping them navigate and stay ahead in the ever-changing e-commerce terrain now that the pandemic is behind us.

Rise of OMO multi-channel sales

Last year saw the rapid development and user growth of OMO (online-merge-offline) sales channels, which is expected to continue in 2024. So, what are OMO sales channels? Essentially, OMO combines the benefits of online shopping with traditional in-store shopping, meaning customers can browse and purchase products both through a company's website or app (online) and at physical brick-and-mortar stores (offline). The idea is to merge these two channels in a way that enhances the overall customer experience. A large majority of surveyed merchants from the Hong Kong E-Commerce Whitepaper 2023 felt that integrating physical and online sales channels really helped out their business (94%). On top of that, during the year-end peak shopping season in 2023, merchants with multiple sales channels saw a remarkable year-on-year GMV increase of around 171%. So, online and offline stores don’t necessarily compete but rather have a complementary relationship, with each sales channel fulfilling a unique role in consumers' routines. Online stores let customers shop anytime, no matter where they are or what time it is, while physical stores let customers interact with brands and products in person.

Live commerce accelerates conversion rates

Live commerce has also emerged as an effective digital sales channel to encourage more shoppers to actually make their purchases. Referring back to the year-end peak shopping period in 2023, merchants who held sales through live streaming saw a yearly increase in GMV by 56%. This aligns with Mckinsey's predictions that by 2026, live commerce will account for 10-20% of all e-commerce sales. The pandemic has also boosted the "stay-at-home economy," where people wanting to shop online from the comfort of home has become a regular habit, adding to the growth of live commerce in Hong Kong. In the fourth quarter of 2023, including the Double 11/Singles Day weekend, local merchants recorded conversion rates ranging from 50% to 70% via their livestream channels. Merchants should also make strategic choices when planning livestreams to optimize web traffic, for instance, selecting peak hours like Saturday evenings from 9 p.m. to midnight to create content.

AI is reshaping the future of e-commerce

Global attention on artificial intelligence (AI) peaked in 2023, with AI-related keywords among the most popular web searches of the year. Likewise, integrating AI in e-commerce has become more common as AI technology continues to advance. For instance, AI is a powerful tool for analyzing consumer data, helping merchants create marketing strategies that deliver precise and personalized content. SHOPLINE merchants who use AI-incorporated email marketing tools, like SmartPush, achieve an average GMV four times higher than their peers. Additionally, merchants can use GenAI to auto-generate product descriptions and provide 24/7 human-like chatbot services, which also drives the popularity of Chat Commerce, where customers can buy items right through a chat.

At the beginning of 2024, cross-border sales also jumped. This comes alongside the recent popularity of warehouse-style retailers in Shenzhen offering cheap, bulk-buying deals, as search words like "Sam's Club," "group buying" and "personal shopping service" surged in popularity among Hong Kongers in the past three months. Between December 25, 2023, and January 28, 2024, the average year-on-year GMV growth of merchants providing Sam's Club personal shopping services increased by 25%. Some merchants recorded a year-on-year GMV growth of nearly 40%, while others achieved six-digit revenues. So, it’s essential for businesses to embrace multi-channel sales to fully take advantage of this trend.

Looking ahead, it’s important that businesses closely follow market trends, make careful and strategic technological investments and choose reliable partners to capitalize on new opportunities flourishing in the e-commerce market.

This article was written by Nick Chiu, SHOPLINE Hong Kong deputy general manager.