Hong Kong is rising in prominence in the global digital cross-border e-commerce sector, with over 40,000 small and medium-sized city enterprises partnering with PayPal to capture billions in revenue through more than 70 million cross-border transactions involving over 25 million international customers between April 2024 to March 2025.

This is according to global payment services company PayPal’s Global Beat Report, released on Tuesday.

According to the report, gaming led the way among Hong Kong’s cross-border exports, generating over $558 million from more than 13.2 million transactions in one year. Computers and software followed, making $464 million from some 10.5 million transactions in one year. General retail, which includes daily essentials and other retail items, recorded over 9.4 million transactions, generating $503 million in sales during the same period.

These three product categories were most sought by consumers in the United States, the United Kingdom and Germany. The US market alone collectively accounted for more than 15 million transactions.

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Besides the top three countries, Hong Kong merchants have also seen strong connections with buyers in Australia, Canada, France, Italy, Japan, Mexico and Spain.

“Hong Kong is a unique market that serves as a vital bridge between Greater China and the rest of the world,” said Tim Fu, market leader of Hong Kong, Korea and Taiwan at PayPal. “Hong Kong merchants are well-positioned to scale globally, provided that they cater to the evolving needs and preferences of international consumers.”

Fu emphasized that it is paramount for Hong Kong merchants to understand more about the payment preferences as well as transaction and trade behaviours of shoppers in every country. Another consideration is that Hong Kong merchants should provide linguistic translations for their products in different markets so that they can gain popularity in each overseas market.

The report said that consumers expect merchants to provide customized recommendations, deliver tailored marketing campaigns, and enhance customer support, as well as creating personalized discounts and offers.

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According to the report, the adoption of artificial intelligence is also reshaping shopping behaviour, with finding the best deals (34 percent), comparing products (30 percent), and discovering gift ideas (26 percent) the top three AI application scenarios in cross-border commerce.