Consumers in Hong Kong have become more digitally savvy and value receiving immediate rewards for online spending
Hong Kong consumers have become more digital-savvy, selective and loyal to brands they trust while making financial decisions in the wake of the COVID-19 pandemic. They are expecting retailers, banks and insurers to deliver enhanced digital experiences and are increasingly shifting towards financial services providers perceived as providing more “value” for online purchases by offering cash rebate and other immediate rewards upon payment, KPMG’s latest consumer analysis finds.
The report, titled Impact of COVID-19 on Hong Kong Consumers’ Behaviours, includes KPMG’s recent research on consumers’ needs and the new reality under the effects of COVID-19, and data gathered by gini, shows there is a preference shift towards engaging with leading digital organisations as well as towards payment methods offering immediate rewards for online spending. In particular, banking and insurance consumers in Hong Kong are notedly expecting to continue using digital services more post-pandemic.
As consumers become more economically constrained amid the pandemic, a drop in consumers’ spend on non-essential products overall is observed. Value for money, ease of shopping experience and product quality have been identified as the new key purchase drivers. The analysis highlights an increased emphasis over digital, with consumers found to be purchasing more often from e-commerce sites than before and are likely to continue using online channels in the future due to the overall positive experiences. Some brands are also building off of the trust that they have established with consumers by consistently delivering high quality experiences aligned with their brand promise; For instance, online food delivery services companies which have successfully built trust and loyalty of their customers during COVID-19 are evolving and expanding their services into groceries.
In Financial Services, consumers in Hong Kong want banks to deliver enhanced digital experiences across channels, and the majority (45%) would like banks to have better functionalities on their apps and websites. Consumers expect to reduce their visits to the branch in the future as they expect to be able to solve transactional activities through digital channels, even though when it comes to significant and life-changing transactions, the branch still has a role to play.
Consumers think their banks should prioritise their digital security by focusing on better functionality on their website and app (45%), providing digital security to protect their accounts (42%), giving clear direction about how consumers should contact them (41%) and offering advice on avoiding online fraud and scams (30%), the survey shows.
Similarly, while the majority of consumers are satisfied with the experiences delivered by insurers during COVID-19, they are also expecting insurers to continue focusing on providing personalised, digitally enabled and efficient experiences. Insurance consumers expect to continue using digital more, especially for making a claim (+19%) and renewing a policy (+13%). However, the survey finds that spending on insurance has remained flat during this period, even when the general public has turned their attention to their health and wellbeing, which signals a potential missed opportunity for insurers to deliver best-in-class experiences.
Isabel Zisselsberger, Partner and Head of Strategy and Performance for Financial Services, Hong Kong, KPMG China, says: “Even if consumers in Hong Kong consider that banks and insurers have met their expectations during COVID, they are expecting more enhanced digital engagement and experience in the future. At the same time, customers also want physical interactions to be improved with reduced waiting times, good safety measures and with pop-up services available to provide personalised advice when required.”
Good online experience drivers identified by surveyed respondents are digital security (67%), seamless interactions (41%), personalised experiences (32%) and 24/7 customer service (29%).
In addition, financial services customers are showing increasing appetite for credit cards with generous cash rebate and other perceived immediate discounts/benefits upon online spending, beating those offering loyalty benefit, mostly on airline credits. Compared to the fourth quarter of 2019 when the leading cards with reward cash rebate took up 48.9% of the market share, in the second quarter of 2020, this percentage has increased to 69.7%.
Overall, banking consumers rank quality of products and services (49%), personal safety (45%) and customer experience (45%) as the most important considerations when purchasing banking products. Likewise, insurance consumers see value for money (57%), quality of products and services (55%) and trust in the brand (44%) as the important factors when buying insurance products.
After six months of consumer sentiment analysis at various stages of the pandemic, consumers’ preferences have noticeably changed, directly affecting the key priorities for organisations.
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