Behaviour shifts: How HK brands can navigate the evolving search landscape

With APAC retail media advertising revenues expected to grow by 15.7% this year, Hong Kong's retail media advertising income will likely surge by 5.0% to reach US$12.5 million, according to GroupM’s “This Year Next Year” report.

This rapid growth can be attributed to retailers leveraging first-party data to offer targeted advertising solutions, capitalising on consumer behaviour insights, according to Smith Bhatt, agency commerce lead, APAC, GroupM. “This full-funnel approach is fueling the growth in retail media spending outside of retail onsite search which was the only source of advertising revenue for most of the retailers,” he added.  

Meanwhile, Chris Ngan, general manager, Hong Kong and Taiwan, The Trade Desk (TTD), said this rapid growth of retail media is unsurprising given its demonstrated impact, citing TTD’s recent partnership with foodpanda across seven Asian markets which exemplifies this trend.  

“A case study from Taiwan illustrates that Unilever’s Knorr leveraged TTD’s platform and used foodpanda's retail data to target their subscribers, resulting in a 229% uptick in add-to-cart rates and an 81% increase in conversions during the beta phase of the campaign,” he said.  

This use case demonstrates that utilising retail data can significantly enhance targeting effectiveness and campaign performance measurement, he added. “It proves that investing in retail media enables brands to reach a wider audience, foster engagement, and expand their market reach.” 

True enough, retail media networks are attracting a significant share of digital ad spend. Taking China for example, Gary Cheung, general manager of NP Digital Hong Kong, said a big proportion of its digital ad spending is channelled towards retail media networks owned by companies such as Alibaba and JD.com.  

“So you can expect retail media networks in Hong Kong to be increasingly integrated into brands and advertisers holistic media approach, becoming an increasingly core component of their overall marketing strategy,” he added.  

Core search remains a dominant force in Hong Kong 

While retail media is gradually gaining traction, core search remains a dominant force in Hong Kong. This is coupled by a Magna global ad forecast which revealed that search remains the largest portion of digital advertising revenues in APAC and will represent US$103 billion in 2024. This is 47% of total digital advertising budgets.  

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Search advertising in APAC is substantially driven by retail media platforms, especially in China where Alibaba, JD.com, Pinduoduo, and Meituan all drive search advertising revenues, said the report. Core search is also spiking around the world as traditional search platforms such as Google and Baidu also see strong performance relative to recent results. 

As onsite search is the first placement that is activated by most retail media platforms, GroupM's Bhatt said he is seeing an increase in spending on search. This increase is not only in marketplaces such as KTVmall, Parknshop, Taobao, and Tmall but also in Quick Commerce players such as Deliveroo and foodpanda.  

“With more retailers taking the route of being a retail media network we foresee the spending on search increasing further. We are also seeing a rise in collaborative/partnership ads with Google happening in the region,” he added. 

Retail media does leverage on their own infrastructure and data to support brands reaching out to their consumers, said Joanne Tong, managing director, Mediabrands Hong Kong, adding that search contributes highly to directing consumers to what they need and desire.  

“We see search spending as one of the more effective ways of converting business and minimising wastage. Therefore at such a conservative time, we anticipate its growing significance in retail media on eCommerce platforms," she added. 

Navigating the evolving search landscape 

However, simply securing top search rankings isn't enough, according to Brandon Cheung, head of biddable, GroupM Nexus, adding that consumers are looking beyond basic information, prioritising authentic reviews and in-depth product research.  

“This evolving search behaviour, characterised by a desire for deeper insights and genuine recommendations, is driving the rising influence of platforms such as mainland China's Xiaohongshu, particularly among younger generations in Hong Kong.” 

In fact, Gen Z in Hong Kong considers social media a key companion, with Instagram leading the way, according to OMD Hong Kong’s “Youngster report”.  Gen Z are starting to explore Instagram’s new platform Threads and turn to Chinese social platforms such as Douyin and Xiaohongshu for more fun, updates in entertainment or shopping. 

Moving forward, navigating this complex and evolving search landscape requires brands to expertly integrate core elements such as SEO, SEM, and CRO, while simultaneously harnessing the growing influence of retail media and emerging platforms, said Cheung.  

As consumers are seeking authentic stories and reviews on brands and products, search will continue to contribute to their research journey. However, the brand and generic search will require support from increasing brand awareness, therefore integrated communication will continue to be important, said Mediabrands’ Tong.  

“Search alone is not the answer. While consumers are seeking simple answers, they have also developed a search behaviour on social. We believe there will be a spike in search within the social media landscape,” she added.  

NP Digital’s Cheung also said YouTube has become a crucial channel, with viewers more likely to consider brands or products featured in video ads. “As shopping behaviours evolve, marketers must adapt their strategies to reach consumers across this diversifying search landscape.” 

On the other hand, there is a significant trend towards diversification in consumers' media consumption behaviour due to the growth of the open internet, represented by streaming media, ultimately influencing consumer search behaviour as well, said TTD’s Ngan. 

“Consumers may no longer be limited to searching for content, products, and services in walled gardens such as search engines. After seeing ads for relevant products and services on ad-supported CTV/OTT, streaming music, podcasts and other open internet channels, they are likely to search directly on brand-owned or eCommerce marketplace,” Ngan added. 

This shift presents a valuable opportunity for advertisers to adopt an omnichannel strategy centred around the open internet, he said. “This approach can help them reach valuable customers and establish a strong global brand presence, a strategy TTD has consistently advocated.” 

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