Impact of Online Shopping on Traditional Retail in Hong Kong

Added on - 23 Sep 2019

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1Impact of online shopping on thetraditional retail shops in HongKong- Research Report
2Abstract:This research report elicits the findings from a study that was executed on the analysis of theinfluence of online shopping on the traditional retail shops in Hong Kong. The study has beenconducted on an exploratory basis with the collection and analysis of qualitative and quantitativedata. Initially, a comprehensive literature review was conducted in order to gather substantialknowledge on the concepts of online retailing, its various forms and the several advantages anddisadvantages that it offers to the retailers and to the customers as well. Then, a primary datacollection process was undertaken where an interview was conducted with some of therelationship managers of HKTV Mall which is the largest online retail shopping mall in HongKong. They were offered with online open-ended questionnaires where they offered theirfeedback. After that surveys were conducted on some of the customers of the HKTV Mall thatare engaged in online shopping from the mall and also from other online or e-commerce businessestablishments. The customers were offered with online survey questionnaires consisting ofclosed-ended questions on their online shopping habits. Then, the phase of data analysis wasundertaken where the feedback from the interviews and surveys were analyzed to arrive at thekey findings of the study. The major findings from the study have revealed that online shoppinghas been gaining immense popularity in Hong Kong like in other parts of the world. The moderngeneration of consumers are preferring the online mode of shopping due to various factors suchas availability of a wide portfolio of products online, easy option to choose a product and makepayments online. Some of the other reasons due to which the customers are getting inclinedtowards online shopping were found to be cost and time savings, high quality of customerservices, ability to conduct shopping 24x7 and the ability to offer instant feedback to thecompanies about the purchase made.
3Table of ContentsAbstract:...........................................................................................................................................2Chapter 1: Introduction...................................................................................................................5Research Background:.................................................................................................................5Research Scope:...........................................................................................................................5Research Significance:.................................................................................................................6Research Rationale:.....................................................................................................................6Research Aims:............................................................................................................................7Research Objectives:...................................................................................................................7Research Questions:.....................................................................................................................7Chapter 2: Literature Review...........................................................................................................8Chapter 3: Methodology................................................................................................................16Research Philosophy:.................................................................................................................16Research Approach:...................................................................................................................17Data Collection Methods:..........................................................................................................17Qualitative:............................................................................................................................17Quantitative:..........................................................................................................................18Data Analysis Methods:.............................................................................................................19Qualitative:............................................................................................................................19Quantitative:..........................................................................................................................20Chapter 4: Results..........................................................................................................................20Interview findings......................................................................................................................20Survey Findings.........................................................................................................................22Chapter 5: Analysis & Discussion.................................................................................................31Chapter 6: Conclusions & Recommendations...............................................................................34
4References:....................................................................................................................................36Appendix:......................................................................................................................................41
5Chapter 1: IntroductionResearch Background:Online selling or E-Commerce selling has gained popularity worldwide including Hong Kong.With the progress of globalization around the world there has been immense technologicaladvancement in the various methods and processes in which the modern business activities arebeing carried out by the several business organizations[ CITATION Sta1910 \l 1033 ].One ofthe massive discoveries for human beings has been the Information and CommunicationTechnology and it several applications in business. The growth and development of the nationslike Hong Kong has altered the tastes and preferences of the consumers to a great extent[ CITATION Cha191 \l 1033 ].Formerly, the customers used to visit the various shops forchoosing their desired products or services. Decades ago the bricks-and-mortar form of shoppingwas more popular among the consumers in Hong Kong as was the case with shoppers in thedeveloped and developing nations[ CITATION Sta172 \l 1033 ].This research study hasexamined the impact of online shopping behavior of the consumers on the future of the retailstores operating in Hong Kong. It is evident that the consumers in Hong Kong, especially thosebelonging to the young generation are avid users of internet technology and they prefer to usetheir smart devices like smartphones to take part in online shopping that has impacted the growthand development of the retail shops in the country[ CITATION The199 \l 1033 ].Research Scope:The scope of the research encompasses a study of the changing consumer behavior of the peopleof Hong Kong who has shifted from physically visiting the various retail shops and making apurchase of their favorite products[ CITATION Par12 \l 1033 ].Majority of the customersbelonging to the young and middle-aged population are preferring to buy there desert productsand services by using their smartphones and other electronic gadgets that use the internet anddigital communication platforms like various mobile applications which have made it easy forconsumers to choose their products and make purchases online[ CITATION Mar187 \l 1033 ].The scope of the research study has been limited to studying the impact of online shopping onone of the online retail organizations in Hong Kong known as the HKTV Mall from theperspectives of few of the relationship managers of the mall as well as collecting feedback from
6some of the customers that are regular consumers of several products and services from theonline retailer[ CITATION The1820 \l 1033 ].Research Significance:The significance of this research study is that it has helped to determine the impact that themodern methods of online shopping or E-Commerce shopping is having on the traditional retailshops in Hong Kong. It is undeniable that online shopping behavior of the modern consumershas a negative influence on the traditional and conventional retail stores in Hong Kong which areoperating for several years. The study has shed light on the extent to which the traditional shopshas been affected due to the increasing popularity of e-commerce platform of shopping that themajority of the modern customers are indulging in[ CITATION Ale18 \l 1033 ].It is expectedthat the findings of this research study will help to reveal a realistic picture of how theconventional retailers in Hong Kong has been actually impacted by this changing consumerbehavior since decades. It is important to determine the future growth and sustainabilityprospects of traditional retailing as well as online retailing in Hong Kong and this research hasmade a significant contribution in this direction[ CITATION Ver15 \l 1033 ].Research Rationale:The rationale for the research is that the subject that has been chose for this study is a highlyrelevant topic in the domain of business research. It can be said that there has been anunprecedented change in the technology that is being observed by the modern businessestablishments around the world. The developed and the developing nations are coming up withcommendable improvements and innovations in the internet and digital communicationtechnologies that have been enriching not only our personal lives but our professional lives aswell. As it is evident that technological progress has a positive impetus in business but it cannotbe denied that too much dependence and utilization of technology has been acting as potentialbarriers and challenges for many of the traditional business establishments such as the bricks-and-mortar retail shops in Hong Kong. The popularity of online shopping has been a cause ofmajor threat to their existence that needs to be studied in order to understand their positions andfuture growth and sustainability options as the demand for internet technologies in business andshopping keeps on rising[ CITATION Jun19 \l 1033 ].
7Research Aims:The aims of the research study encompass understanding the causes behind the rising popularityof e-commerce companies and online shopping behavior of the consumers in Hong Kong anddetermining the ways in which such consumer behavior are effecting the conventional andtraditional retail stores in the country. The study has aimed to find out the major challenges andbarriers that the traditional retail stores are facing in the country due to the fast increasingdemand of online or e-commerce business establishments that are ready to offer the facilities ofonline shopping for the modern tech savvy consumers. Furthermore, the purpose of the study hasbeen to determine the reactions of some of the online retail business managers as well as onlineretail customers in order to evaluate the reasons of popularity of e-commerce among theconsumers and the future of the traditional and online retail stores in the country. The study alsoaimed at offering suggestions to the traditional retailers as well as the online retailers as to theways in making their businesses grow and sustain within the extremely competitive and dynamicbusiness environment of retailing in Hong Kong.Research Objectives:The research study has aimed to achieve the following objectives:To identify the growth of e-commerce shops in the retail industry of Hong KongTo assess the current status of the traditional retail stores in Hong KongTo analyze the impacts of e-commerce growth on the traditional retail industry in HongKongTo offer suggestive recommendations to ensure continuity of traditional retail shoppingas well as supporting the growth of e-commerce or online retailing in Hong KongResearch Questions:The research has sought answers to the following questions:What are the growth trends of e-commerce industry in Hong Kong?What is the current status of retail industry in Hong Kong?What is the effect of the growth of online shops over the traditional retail shops in HongKong market?
8How can the sustainability of traditional retailing be ensured along with the growth anddevelopment of online retailing in Hong Kong?Chapter 2: Literature ReviewThis section of the study shares the knowledge that has been gathered by undertaking acomprehensive review of various sources of literature such as online journals, websites andreports on the subject of the future of traditional retailing, the emergence of online retailing andthe several challenges and opportunities that modern e-commerce retailing offers to the retailbusiness sector. The learning imbibed from this section has been instrumental in forming thefoundation of the research study in terms of understanding the reasons behind the increasingdemand for online shopping and the several barriers that the traditional retailers have been facingdue to this imminent threat of e-commerce platform of selling products and services.According to Amaro & Duarte (2015), since decades, the domain of retail shopping has beendominated by the conventional retail stores which can be considered as bricks-and-mortar formatof selling products to the consumers. The advantage of traditional retail stores is primarily thebenefit that they offer in terms of offering the opportunity of tangibility of the products that theconsumers can see and physically touch before they make up their minds to either purchase theproducts or abstain from making any purchase if they are not satisfied with the product. This wasone of the reasons behind the time taken for or e-commerce online platform of shopping tobecome popular among the consumers. The conventional consumers preferred to see andexamine the products with their own hands and observe a physical demonstration of the use ofsuch products before they finally decided about purchasing the product or not. Decades agowhen the e-commerce form of business started to open up globally, the initial reaction of thecustomers was not highly encouraging because the majority was not aware of the internet anddigital communication technologies and there was no adequate resources and infrastructure tosupport the large-scale acceptance and implementation of e-commerce strategies. The generalawareness of the public about the technology was also extremely low due to which the majorityof the consumers we are not confident on the technology and they considered the traditional formof retailing to be more effective and authentic way of shopping. However, the inception of the
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