Following the resumption of travel after the pandemic, it has become increasingly common for Hong Kong residents to travel and spend in Mainland China during holidays.

Prof. SONG Zheng, Wei Lun Professor of Economics and the Department Head at the Department of Economics, The Chinese University of Hong Kong (CUHK), and his research team have released findings from their study “Hong Kong Travelers in Mainland China: Scale, Destinations, and Expenditure Patterns”.

Through data analysis of the Hong Kong Census and Statistics Department (C&SD), the research found that Hong Kong residents’ expenditure in Mainland China has not crowded out their spending in Hong Kong. The study also obtained AlipayHK’s data model for further analysis, indicating that Hong Kong residents’ expenditure in Mainland China is primarily focused on life services, whereas in Hong Kong, it is concentrated in the retail and food & beverage sectors.

This research release marks the first project in CUHK Faculty of Social Science’s research release series. Prof. Anthony FUNG, Dean of Social Science at CUHK, stated in his speech, “The Faculty of Social Science at CUHK is committed to bridging rigorous academic research with society and exploring various social phenomena and solutions with the public.

Therefore, we conceived this research release series to regularly introduce our research findings from different departments and schools. This study on Hong Kong residents’ Mainland expenditure patterns by the Department of Economics marks the inaugural launch of the research release series. I firmly believe this topic is both timely and closely related to citizens’ wellbeing. It is my hope that the research can offer insights to everyone.”

Hong Kongers’ Consumption Expands Beyond the Greater Bay Area to Mainland China’s Diverse Regions

Research showed that Hong Kong residents’ consumption in Mainland China has gradually expanded beyond the Greater Bay Area and first-tier cities such as Shenzhen and Guangzhou, now reaching lowertier cities within the Greater Bay Area (e.g., Zhongshan and Jiangmen) and even inland cities like Chongqing and Changsha.

This reflects the growing integration of cross-border consumption markets (Figure 1). Driven by the surge in northbound travel among Hong Kong residents and the widespread adoption of convenient payment systems, significant consumption spillover effect is observed.

With support from AlipayHK and Ant Group Research Institute, Prof. Song’s team utilized AlipayHK seasoned* user data model to conduct more detailed consumption pattern mapping. AlipayHK has over 4.5 million active users and it was the first local e-wallet in Hong Kong to launch cross-border services, therefore its data model could reflect the consumption patterns of over two-thirds of Hong Kongers.

C&SD Data Shows Hong Kongers’ Mainland Spending Has Not Crowded Out their Local Spending

Official statistics indicated that the number of trips by Hong Kong residents to Mainland China last year had returned to pre-COVID levels, and the proportion of Hong Kong residents’ expenditure outside Hong Kong in total expenditure remains similar before and after the pandemic (Figure 2). It reveals that Hong Kong residents’spending in Mainland China has not crowded out their expenditure in Hong Kong. 

Prof. SONG Zheng, Wei Lun Professor of Economics and the Department Head at the Department of Economics, CUHK, pointed out that, “Contrary to public perception, government data reflects that Hong Kong residents’Mainland consumption has not crowded out their local consumption.”

Hong Kongers Exhibit Distinct Consumption Priorities Between Local and Mainland China Markets

Furthermore, data analysis revealed AlipayHK users’ distinct differences in consumption patterns between Mainland China and Hong Kong. Among AlipayHK seasoned users who have made transactions in Mainland China, the service sector accounts for approximately half of their total expenditures in Mainland, whereas the retail sector represents only 28%.

However, AlipayHK seasoned users’ consumption in Hong Kong is largely concentrated on retail and food & beverage sectors, accounting for 58% and 29% respectively, while services account for a smaller proportion at only 12% (Figure 3). By breaking down Hong Kong residents’ consumption in the service sector in Mainland China, lifestyle services consumption accounts for over 80%, including beauty & health, massage, and other personal services.

Prof. SONG Zheng added, “Our analysis of e-wallet user data model shows that the service sector accounts for nearly half of Hong Kong residents’ Mainland expenditure, which is distinctly different from their local consumption patterns. This suggests Hong Kong’s service sector faces pressures that warrant government attention and specific policy support for the sector and related workers.

Furthermore, following the cross-border market integration, Mainland China services have become an important part of Hong Kong residents’ consumption choices, expanding from previously concentrated areas in the Greater Bay Area and first-tier cities to nationwide coverage.”

Figure 1
Spatial Distribution of Seasonal AlipayHK users’ Expenditure in Mainland China

Figure 2
Consumption outside Hong Kong

Figure 3
Consumption Patterns across borders for Seasoned AlipayHK users

Ant Unit: Digitized Cross-Border Services Drive a spending surge among over 2 million Hong Kongers in Mainland China

This research is supported by Ant Group Research Institute and AlipayHK, with their provision of data model. Their representatives were invited to attend the press conference and share their observations. Ms. Venetia LEE, CEO of AlipayHK, stated, “Digital services are becoming an accelerator for Greater Bay Area integration.

Over the past year, AlipayHK has attracted more than 2 million Hong Kong residents to use its cross-border services when travelling north. Among them, over 20% have embraced a 'One App Does It All' approach—whether it’s booking a ride, ordering meals, remote queuing, or even making dental appointments, everything can be handled effortlessly through AlipayHK’s mini apps.

This seamless experience not only eliminates cross-border barriers but also drives Hong Kong residents’ shift from ‘impulse consumption’ to ‘daily essential consumption’, promoting seamless integration of residents’ mobility, capital flows, and living circles across the Greater Bay Area.” 

Separately, Ant Group Research Institute, citing data from Mainland China, shared its research and analysis on how digitalization is driving service consumption in Mainland China. Mr. Zhenhua LI, Executive Director of Ant Group Research Institute, said, “The rapid development of digital technology in recent years has significantly promoted the growth of service consumption in Mainland China.

From the supply side, research shows that small and micro businesses using digital platforms for online sales have seen an average annual increase in sales volume and transaction amount of 15.5% and 11.9%, respectively. From the demand side, mobile payments have facilitated the growth of household consumption and the upgrading of the consumption structure (i.e., an increase in the share of service consumption).

Studies indicate that mobile payments can boost household consumption in  Chinese Mainland by 16% and reduce the Engel coefficient by 1.7%.”

Prof. Song concluded that the Department of Economics at CUHK is dedicated to deepening cooperation with all sectors of society, including collecting research data to explore issues of social interest. The department hopes that academic research findings can serve as a reference for policymakers and stakeholders in society, enabling the joint exploration of solutions to boost the economy and citizens’ wellbeing.

* Seasoned users refer to those active users who completed registration and started using AlipayHK before 30 June 2021 and were still engaging in actual transactions after 1 January 2022. This definition aims to screen for long-term and stable users of AlipayHK, to avoid potential behavioural biases caused by new users and more accurately evaluate the relevant effects in the research.