Online shopping can be a double-edged sword for consumers
Investor Education Centre survey has found
Over two-thirds of shoppers confessed that they were more likely to make impulsive purchases online with nearly half having a tendency to overspend
1 November 2018
- More than two-thirds (68%) of online shoppers believe that online shopping leads to impulse purchases
- Over half (57%) say they are more prone to unnecessary buys, with this behaviour more evident in women and youngsters. Close to a third (31%) claim they have difficulty saving money because of online shopping
- Top three reasons cited for unnecessary spending online: convenience (71%), online promotions (56%) and the variety of product choices (51%)
Hong Kong’s online shoppers tend to be easily lured into making impulsive and unnecessary online purchases which could hinder their savings, the Investor Education Centre (IEC) Online Shopping Survey has found.
Conducted in February 2018, the survey interviewed 500 Hong Kong adults aged between 18 and 54 who had shopped online over the last six months. On average, the respondents shop online about three times a month and spend around HK$1,227 each month, with more than a quarter (27%) spending HK$1,500 or more on necessities and also items that they might not need.
Almost one-fifth (18%) admitted that they cannot settle their credit card bills in full due to online shopping. A quarter of the surveyed online shoppers are carrying personal loans with an average of HK$34,000.
Ambivalence with online shopping
Whilst online shoppers cited convenience (64%), competitive prices (63%), wide variety of choices (60%) and ease of searching for a product (45%) as compelling reasons for shopping online, it is not without its pitfalls. More than half (57%) said they tend to spend on unnecessary items, while three out of ten (31%) respondents found difficulty in saving money because of online shopping.
The top three reasons attributing to unnecessary purchases are convenience (71%), online promotions (56%) and the variety of product choices (51%).
Some 42% of all respondents set themselves a personal budget, and among them close to one-third (31%) tend to overspend. The lower pricing plays a significant role as almost half (48%) over-shop because online products are cheap, while 44% have bought more than they intended in order to reduce or waive the delivery fee.
Impulse buying fuelled by online promotions and conversations
While over two-thirds (71%) usually shop online with a product in mind, nearly half (49%) of the shoppers said their purchases are also often triggered by online advertisements and promotional offers, and one-third (34%) owed it to seeing relevant posts and promotion on social media.
Majority of the online shoppers (79%) have participated in at least one online shopping promotional event last year, with the top three most popular ones being Singles’ Day (56%), Christmas sale (37%), and the 12.12 sale taking place on the 12th of December (33%).
"With the online shops operating 24 hours a day and 7 days per week, you can literally browse anytime, anywhere and make purchases almost instantaneously. Also, it is easy to be drawn in by advertisements and product offers, and influenced by reviews and social media endorsements," said Mr David Kneebone, General Manager of the IEC.
"Shoppers can cultivate good shopping behaviours and avoid hasty purchases by recognising the difference between needs and wants, and setting aside a budget and spending within limits," he added.
On a more positive note, the survey also found Hong Kong online shoppers to be savvy and proactive in terms of comparing prices and products. They are value-conscious, and take the time to learn about related charges (62%), check the sellers’ reputation (60%), compare prices (55%) and search for coupons or offers (51%) before making decisions.
The most popular items purchased online were clothing and accessories (64%), household items (51%), followed by food and drinks (44%).
Mr Kneebone said, "The IEC is committed to helping everyone become good money managers with our tools and resources which allow users to track their budgets and expenses. Whilst the platforms for everyday spending have evolved, the principle behind good money management remains the same – spend within your means, and spend within your budget."