B2B payment practices trends, Hong Kong 2024

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Our survey of companies in Hong Kong reveals key insights into current B2B corporate payment trends. Explore emerging dynamics that could shape the future of business transactions.

27 Sep 2024

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B2B customer cashflow problems spark concern over late payments

While 63% of companies in Hong Kong report stable payment behaviour from their B2B customers, delays in payment remain a problem for many businesses across our survey. Steady payment practices are particularly evident in the electronics/ICT sector, but some consumer durables companies tell us they had to wait longer than last year to collect payments. Overall, an average 52% of sales being made on credit to B2B customers in Hong Kong are not currently paid by the due date. Bad debts written off as uncollectable stand at an average 4% of all B2B invoices, prompting significant financial strain for businesses. The major reason for late payments, cited by 40% of Hong Kong companies, is cash flow troubles among B2B customers, causing concern that difficulties faced by one firm could spread more broadly through an industry.

Impact of customer credit risk arising from B2B trade on Hong Kong businesses

Widespread optimism despite geopolitical and economic worries

A positive mood about the outlook for the year ahead is clear in our survey of Hong Kong companies. 48% of businesses tell us they anticipate an improvement in B2B customer
payment behaviour during the year ahead, especially in the electronics/ICT sector. Many companies in the textile-clothing industry foresee no significant change in payment practices,
while only a minority expect a deterioration. The logical consequence of this is that 41% of businesses in Hong Kong also expect improvement in Days Sales Outstanding (DSO)
during the coming months, against notably in the electronics/ICT industry. A possible worsening of DSO is anticipated only by a minority in the consumer durables
sector. There is also optimism about the prospects for insolvency rates among companies in Hong Kong, with 64% anticipating that these will remain unchanged in the year ahead. Our survey also finds that companies in Hong Kong have a variety of concerns looking ahead despite the generally optimistic environment. One major worry is about how shifting domestic and global economic conditions could impact on their businesses, notably a reduction in consumer spending and demand.

Hong Kong businesses' key short- and long-term concerns

The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers.

Interested in finding out more?

For a complete overview of the 2024 survey results for Hong Kong, please download the full reports available in the related documents section below.

Summary

Our survey finds that, on average, 52% of B2B sales transacted on credit by businesses in Hong Kong are currently not being paid by the due date. Bad debts written off as uncollectable stand at an average 4% of all B2B invoices, putting a strain on business finance.
The main reasons for slow payments are cashflow limitations of B2B customers and inefficient payment processes. Nearly one-third of Hong Kong companies respond by slowing down payments to their own suppliers, while others defer investments.
64% of companies expect the rate of insolvencies to remain unchanged during the year ahead. Almost half of Hong Kong businesses expect an improvement in B2B customer payment behaviour during the same time frame.
One in three companies in Hong Kong are anxious about challenging domestic and global economic conditions that could reduce consumer spending and demand. There is also worry about financial constraints, such as a lack of capital and insufficient cash flow.