B2B payment practices trend, Hong Kong 2023

The 2023 Payment Practices Barometer survey for Hong Kong was conducted between the end of Q2 and the beginning of Q3 2023, and findings should therefore be viewed with this in mind.

Key takeaways from the report for Hong Kong 

Rise in B2B trade credit risk prompts strategic measures

• The struggle to manage cashflow for companies in Hong Kong is highlighted by our survey finding of a 26% increase in the number of companies waiting longer to collect overdue payments from B2B customers than last year. This worrying trend explains why late payments now affect a significant 60% of all B2B invoices. The level of bad debts is also a concern, currently impacting 9% of all B2B invoices, up from 6% last year.
   
• Disputes with customers was cited as the main reason for late payments by many businesses polled in Hong Kong, while the electronics/ICT sector reported that insolvency among B2B customers was another major factor. Another indicator of the soaring B2B trade credit risk affecting companies in Hong Kong was a deterioration in Days-Sales-Outstanding (DSO), with 55% of businesses polled saying their DSO either worsened or did not change during the past year.

Positive outlook prevails despite global supply chain worries

• Despite a challenging landscape for international trade, our survey found a generally optimistic mood for the year ahead among companies in Hong Kong. 59% of businesses polled said they anticipate an increase in demand and therefore sales during the coming months, particularly in the consumer durables and textile/clothing sectors. A less positive verdict was given across the electronics/ICT industry, where companies were also pessimistic about the prospects for profit margins. Overall, only 42% of companies polled expect an increase in profitability, while the remainder believe there will be no change or a decrease. 
   
• There was also a positive feeling expressed concerning the outlook for Days-Sales-Outstanding (DSO) in the next 12 months. 50% of companies polled in Hong Kong anticipate there will be an improvement in DSO, reflecting their proactive and forward-thinking approach to strategic credit management.

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 2023 survey results for Hong Kong, please download the full report available in the related documents section below. The Statistical Appendix to the regional report is also available for download in the section below.

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