LC Q10: Development of e-commerce in Hong Kong

Following is a question by the Hon Kenneth Ting and a written reply by the Secretary for Economic Development and Labour, Mr Stephen Ip (in the absence of the Secretary for Commerce, Industry and Technology), in the Legislative Council today (June 16):

Question:

Will the Government inform this Council:

(a) whether it has studied and predicted the development trend of e-commerce in Hong Kong within the next five years;

(b) how the present pace and mode of Hong Kong's industrial and commercial enterprises in utilising e-commerce for their business development compare to those of their counterparts in Europe, the United States of America and the Mainland; and

(c) whether it has studied the monitoring of e-commerce development in Hong Kong through amending or enacting legislation?

Reply:

Madam President,

(a) Since 2000, the Census and Statistics Department has been conducting annual surveys on information technology (IT) usage in the business sector. The survey findings have recorded a steady increase in the adoption of IT and e-commerce in the business sector over the past three years. The penetration rates of personal computer and the Internet have increased respectively from 51.5 per cent and 37.3 per cent in 2000 to 54.8 per cent and 47.5 per cent in 2003. In addition, more and more business establishments have started to order/purchase, receive, sell or deliver goods, services or information through various electronic means.

With a view to encouraging more small and medium-sized enterprises (SMEs) to adopt IT, Information Technology Services Department has been cooperating with the relevant trade associations and IT industry organisations to promote IT adoption by SMEs in specific sectors. We have already started two sector-specific programmes to promote IT adoption by travel agents and private medical practitioners. We expect that e-commerce adoption in Hong Kong will continue to grow steadily over the next few years.

(b) Hong Kong ranks ninth overall (10th and 14th respectively in 2003 and 2002) in the Economist Intelligence Unit's 2004 e-readiness rankings, which covers over 60 economies. The rankings are based on criteria in six categories and Hong Kong comes 11th in the category of consumer and business e-commerce adoption.

Those ahead of Hong Kong in the 2004 e-readiness rankings are mainly the United States and European countries leading in IT adoption, including Denmark, the United Kingdom, Sweden, Norway and Finland, etc. The Mainland ranks 52nd.

Regarding the mode of e-commerce utilisation, we have studied the research and survey findings of e-commerce adoption in 2002 and 2003 published by the United Nations Conference on Trade and Development, European Commission, National Statistics of the United Kingdom, University of California and Census and Statistics Department of the Government of the Hong Kong Special Administrative Region. In general, online shopping is most popular in the United States and European countries, in particular the United Kingdom and Germany. Enterprises in the European Union member states tend to be active in adopting e-procurement and participating in e-marketplace transactions, as well as exchanging business and product information through the Internet with their business partners, suppliers and customers. Among the firms in the United Kingdom and United States, popular e-commerce utilisation includes the use of e-mail and electronic data interchange (EDI), establishment of website and intranet/extranet, as well as electronic fund transfer and payment. As regards the Mainland, some enterprises in the manufacturing, distribution and financial sectors have set up websites and extranets and adopted EDI. Exchange of operational data through the Internet with their customers and suppliers is also quite common. In Hong Kong, receipt of goods, services and information through electronic means has been the most commonly cited e-commerce utilisation among enterprises. Some firms have also offered product and service information through their websites, and sold their products and services through various electronic means.

(c) Electronic means, including the Internet, is one of the media for conducting commercial and trading activities. In general, legislation regulating the various aspects of commercial and trading activities (such as the use/collection/storage of personal data, trade description, consumer goods safety and copyright) is also applicable to commercial and trading activities conducted through electronic means. If criminal activities are involved, they can be dealt with by the Crimes Ordinance or other relevant legislation.

Moreover, with a view to facilitating the development and adoption of e-business, the Electronic Transactions Ordinance (Cap. 553) was enacted in 2000 to provide a clear legal framework for the conduct of electronic transactions. For instance, the Ordinance accords electronic record and digital signature the same legal status as that of their paper-based counterparts. We also introduced the Electronic Transactions (Amendment) Bill 2003 into the legislature last year with a view to updating and improving the Ordinance, and thereby facilitating the adoption of electronic transactions. The Amendment Ordinance, if enacted, will come into operation on June 30 this year.

Wednesday, June 16, 2004

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