3 Strategies making use of Online Delivery Platforms
In our last blog, we have introduced Hong Kong’s food delivery industry by taking Deliveroo, which owns half of Hong Kong’s market share, as an example. As a result of the COVID pandemic affect, roles of physical stores are being weakened nowadays. In this blog, we are going to pick up 3 strategies which help support the food service companies’ continuous growth by making use of the online platforms such as Deliveroo.
Virtual brand is a brand without physical stores. For food service companies that already have their physical stores, opening up a virtual sub-brand would be a way of making full use of the companies’ kitchens. Sub-brands allow companies to connect with their potential customers without taking a risk to their main brands and also without being restricted by their main brands.
Opening up a sub-brand is not a new strategy as it has been used to broaden the customer base that could not be reached by main brands in terms of prices and food styles. For example, “UFUFU Café（うふふカフェ）”, which was established in Japan’s Saga prefecture, entered Hong Kong in 2016, is using “L.D.K. by Ufufu Cafe” as their main brand and opening up “Omelette Rice by Ufufu Café” and “Japanese Burger & Steak by Ufufu Café” as their sub-brands.
However, sub-brands which occupy physical stores would be costly on rent and food. Virtual brands using online platforms would be a more low-cost, low-risk choice, which also can open up new customer bases and allow new challenges for the companies. For customers, they would also be enjoying different choices and new menus.
According to Deliveroo’s data, 84% of customers who ordered from virtual brands had not ordered from the main brands before. Moreover, 42% of the virtual brands are having higher ratings than their main brands, which could develop new customer bases and possibilities for the companies.
A Shared kitchen is also known as cloud kitchen, which is a facility mainly used to prepare dishes for food delivery. There are usually several restaurant owners and chefs sharing one rental space, and only provide delivery food service.
Customers can order a variety of dishes from more than one brand using the same delivery order, which makes a better food delivery service experience. For restaurants, businesses can be started and expanded using only low cost investments. The economized capital can be used for further expansion. New kitchen set-up issues, such as construction and FEHD license applications, and kitchen management could be easily done by using a shared kitchen as a solution.
Analyzing data from online platforms
Food service companies usually only have their own sales data, which makes analyzing market trends involving other companies’ business conditions difficult. Although there might be differences between online platforms’ services, we would take Deliveroo’s data analyzing service as an example:
By using Deliveroo’s global database analysis, restaurant partners could review their own sales data as well as data of surrounding areas. For example, the most popular dishes, kinds of cuisines undergoing rapid sales growth and shortage in supply, average sales amount, trend and frequency of orders.
The data analyzing service “Marketer” provided by Deliveroo, can target customers accurately and offer special promotions at a suitable timing.
Conventionally, even if restaurants announce promotions on their social media pages, there are no ways to distinguish whether a customer is a new or current existing customer. By using Marketer, restaurant partners could make more efficient use of their marketing budget focusing on reaching potential customers only. According to Deliveroo’s data, if new customers discover a restaurant through Marketer’s offer, the possibility for them to become the restaurant’s repeater is almost same to customers who discover the restaurant by themselves in other ways.
“Food delivery” is not only “meals”
As there are plenty of supermarkets and wet markets within walking distance from residential areas, online purchasing of groceries, especially fresh food, was not popular in Hong Kong. However, delivery is becoming more popular as people refrain from going out due to COVID pandemic. Consumer ecosystem of one-stop-shop is now expanding.
For example, Deliveroo which equipped with the most trusted grocery brands in Hong Kong, such as PARKnSHOP, 7-Eleven and DON DON DONKI, achieved growth of registered shops by 210%, 240% repeaters growth, and new customer monthly growth by 118%.
Food service companies could make use of online platforms to further expand their customer base, by also selling groceries such as condiments, paper pack drinks and bottle drinks.
MAY Planning provides support on business expansion to Hong Kong and promotions towards Hong Kong’s market. Support on implementing delivery service platforms is also available. Feel free to contact us anytime.
Booming! Food Delivery Industry’s Rapid Growth under COVID Pandemic
As introduced in the previous blog, food delivery is becoming a more important source of income to the restaurants. Food service industry in Hong Kong is now putting more focus on their collaboration with the food delivery services. In fact, not only Hong Kong, the rapid growth of food delivery services due to the COVID pandemic can be seen all over the world. In the forecast by Statista, the German company specializing in market and consumer data, sales of online food delivery in the world would reach approximately 339 billion USD in 2022. Moreover, there would be an annual growth rate of 8.29%, which makes the sales reach as much as about 466 billion USD in 2026.
In this blog, we will take Deliveroo, a food delivery company launched in Hong Kong in 2015 and holding half of Hong Kong’s market share now, as an example to introduce the food delivery industry and consumers’ behavior in Hong Kong.
Market Trend and Consumer Insights of Food Delivery Market
According to the survey results of “Censuswide survey” (responded by 1,000 Hong Kong citizens) conducted in January 2021 and “the Share of Stomach report” (responded by 800 Hong Kong Deliveroo Customers) conducted in December 2021, the following characteristics of Hong Kong consumers can be concluded:
・”Meals” is a indispensable part of “Well-being” to Hong Kong citizens
71% of the respondents stated that “food plays an important role to mental health”, and 64% expressed that ordering from their favorite restaurants contributes to their feeling of happiness and sense of well-being.
・Healthiness and tastiness take priorities in Hong Kong citizens’ meal orders
65% of the respondents answered that they would like to manage their nutrition levels. People are more used to dining at home because of dining-in restrictions due to the pandemic. As a result, consumers’ priority of nutrition becomes higher compared to the past.
38% of the Hong Kong consumers see “flavor and taste” as the most important factor while they are choosing their delivery meals. 30% consider whether the meal fulfills their own dietary restrictions, while 26% expressed their eagerness for “meals prepared by specialized chefs”.
・Over half of the Hong Kong citizens getting more rely on delivery services
Since the COVID pandemic started, 78% of Hong Kong consumers order meals at least once a week through food delivery services. In 2020, the amount spent on food delivery services by Hong Kong citizens was 1,324 HKD a month, which grew 21% compared to 2019. 55% of Hong Kong consumers stated the frequency of ordering food delivery or take-out increased in the past 12 months, while 75% expressed that they would use food delivery services even more frequently than now in the future.
・Asian cuisines preferred by Hong Kong citizens
Among the world cuisines except Chinese ones, Hong Kong citizens’ favorite cuisines are Japanese cuisines (45%), Korean cuisines (36%) and Thai cuisines (22%). Hong Kong citizens enjoy their foreign cuisine meals as if they are traveling over the countries.
29% of the consumers stated their reason for online ordering as “many foreign cuisines could not be easily made at home”. On the other hand, there are 27% whose motive is to support their favorite restaurants which are suffering from the COVID restrictions, and 24% feel troublesome to cook at home by themselves.
・Tendency of online orders differs between weekdays and weekends
Orders on weekends are mostly within dinner time. As dinners are usually ordered by large groups, consumption price would be about 20% higher than lunch, while there would be a 10% additional increase comparing weekend orders to the weekday ones.
For weekdays, most orders are lunches during office and school lunch time, making meal boxes for individuals, especially Japanese “Bento”, a popular choice.
In the next blog, we are going to introduce ways to expand food services in Hong Kong by using online platforms such as Deliveroo.
Latest! The 5 Hong Kong Food Service Market Trends
As the COVID-19 pandemic continues for over 2 years, Hong Kong’s food industry and consumers’ habits changed a lot. The industry is undergoing a great shuffle and this may bring chances for new food businesses to enter Hong Kong’s market.
In this blog, we are going to introduce 5 main latest Hong Kong food service market trends by InvestHK.
Trend 1: Green Eating
Plant-based meat is being globally popular nowadays. Especially in Asia, people are combining plant-based meat with their traditional Asian cuisines, such as meat buns and dumplings, to immerse the green eating concept into their own food culture.
In Hong Kong, there are restaurants of many different kinds of global cuisines. Restaurant chains and classy restaurants are arranging their dishes to fit Asians’ preferences and started to introduce new green dishes to their menus.
According to Euromonitor’s estimation, the global plant-based meat market and milk substitute market would be growing to about 27.5 billion USD and 22.5 billion USD sizes, which APAC area accounts for respectively 74.5% and 48% of the whole world’s market.
In the report of InvestHK, it is stated that there are approximately 40% of Hong Kong citizens who are semi-vegetarians, and 52% of the interviewees expressed “agree” or “strongly agree” to the statement “we should consume more plant-based substitutes”. Green Common, the plant-based meat online shop in Hong Kong, is having it sales grown by 77%, while the food delivery service Deliveroo also stated that the order rate of plant-based substitute products has grown by 160% under the COVID-19 pandemic, showing the continuously growing size of Hong Kong’s green eating market.
Trend 2: Grab and Go
“Grab and Go” style fits Hong Kong citizens very well as the pace of living is very speedy in Hong Kong.
For example we have Hanamusubi, a shop chain of Japanese rice balls, launched in Hong Kong in 2011, has now expanded their business to 102 shops. Mr Nishida, the founder of Hanamusubi, commented that “Hong Kong citizen’s love to Japanese food, ability of casual consumption and valued food quality” led to the business’s success.
Especially there are still restrictions for dine-in due to the COVID rules in Hong Kong, we can see a rapid growth of snack shops and drink shops which are specialized for take-out. Other restaurants also started to rearrange and simplify their menus for taking-out in order to catch the trend.
Trend 3: More Affordable Rent, Leading Growth of Small Shops and Pop-up Stores
Tsim Sha Tsui, Mongkok and Causeway Bay areas, which used to be filled up with retail stores, showed a sharp decrease in rent starting from the year 2019. Although the drop slowed down due to Hong Kong’s economic recovery, there was still a 37.1% decrease for shopping mall stores’ rent and a 50.2% decrease for street stores’ rent in 2021 comparing to 2019.
As the demand of take-out orders increases, food businesses could be started even only using a small area such as an 18-27 square meter store. Therefore, it is easy for franchise businesses to develop, and suitable for new businesses and chefs to try their new ideas in Hong Kong at the present.
Trend 4: Food Trading and Manufacturing Chance in GBA
In order to handle the supply chain issue, food and drink manufacturers are considering setting up their production line in Asia. Some of the manufacturers are setting up pilot facilities in Hong Kong to make use of Hong Kong’s advanced manufacturing capabilities, and aiming to expand their businesses to the GBA area.
Last year, Nissin Foods Hong Kong received 15 million HKD of subsidy from the Hong Kong government’s Re-industrialization Funding Scheme, for implementing their new smart production line in Hong Kong.
The digital ecosystem of food business, such as food delivery, online grocery stores and cloud kitchens, is well developed in Hong Kong. Food service businesses could make use of Hong Kong to get their local partners for financial, logistics and operation support, examine their recipes and concepts for Asian and Chinese markets, and spread their brands from Hong Kong to the huge GBA market of 86 million Chinese consumers.
Trend 5: Food Delivery and Online Grocery Stores
Affected by the COVID-19 pandemic, food businesses are paying more attention to the collaboration with food delivery services. Food delivery services are having their sales share among the whole Hong Kong food service market, growing from 4.4% in 2016 to 22.3% in 2021, and becoming one of the restaurants’ major sources of income.
Apart from food delivery, the food service industry is also having its digitalization on grocery sales. Although supermarkets and wet markets are easily accessible in Hong Kong, consumers are refraining from leaving home under the COVID-19 pandemic, which created a business chance for online grocery shopping.
Please stay tuned for more details on facts and usage of Hong Kong’s food delivery industry in our next blog.
Gray Zone in Hong Kong’s Employment Ordinance? Discover the Vague Employment Status from Doubt of Compensation Shortfall on Uber Eats Hong Kong’s Exit
Uber Eats, the food delivery service company, had suspended their service in Hong Kong from the end of 2021. However, this was not the end of the case. On 24th Jan 2022, Hong Kong Freelancer Service Union (HKFSU) of Service Industry General Union (HKFTU) gathered over 40 of the former Uber Eats workers, mainly riders, to bring an action to the Labour Tribunal for the issue of compensation shortfall caused by the Uber Eats Hong Kong’s exit.
Among the former workers, there were workers who did not receive sickness allowance even after 6 months from his work injury, and also workers who did not ever receive any paid annual leaves and statutory holidays. The reason behind is all about whether the workers are “self-employed” or not.
In this blog, we are going to introduce the definition of “employees” and “self-employed individuals” under Hong Kong’s Employment Ordinance, using the case of Uber Eats as an example.
Only 2 Types of Employment Status under Hong Kong’s Employment Ordinance
First of all, Hong Kong’s Employment Ordinance is applicable to all the employees, except self-employed individuals, civil servants and those who are employed by the Hong Kong government, those who are applicable to the Merchant Shipping (Seafarers) Ordinance and the Apprenticeship Ordinance.
People usually classify employment status into “full time” and “part time”, which different employers may have their own definitions. While under the Employment Ordinance, employment status are only classified as the following 2 types:
1. “Continuous Contract of Employment”
An employee who has been employed continuously by the same employer for four weeks (*) or more, with at least 18 hours worked in each week is regarded as being employed under a “Continuous Contract”.
* the definition of “week” in “Continuous Contract of Employment” specifically means “weeks ended with Saturday as the last day”. In other words, to fulfill the condition of “Continuous Contract”, the employment period should include at least 4 Saturdays.
2. Status that are not under “Continuous Contract of Employment”
Any situations that are not fulfilling the above definition. In any dispute as to whether a contract of employment is a “Continuous Contract”, the onus of proving that it is not a continuous contract shall be on the employer.
Employees who are applicable to the Employment Ordinance, no matter how long their working hours, could enjoy basic guarantees such as payment of wages, prohibition of wage deductions, and statutory holidays.
For employees who are employed under the “Continuous Contract”, they would be able to enjoy more statutory rights, such as rest days, paid annual leaves, sick allowances, severance payment and long service payment.
The Gray Zone between “Employee” and “Self-Employed Individual”
For “self-employed individuals”, they are more like in a “partnership” relation than “being employed”, and the Employment Ordinance is not applicable to them. However, there are NO specific factors to clearly distinguish the differences between “employment” and “partnership”.
Normally the following 3 perspectives could help to judge:
In the case of employment, working time, work content and instructions are usually established by the employer.
2.Ownership and Offer of Productive Factors
In the case of employment, tools needed are usually provided by the employer. While in partnership, tools are often owned by the employees themselves. For example, when a hair stylist is self-employed, he/she probably works with his/her own hair cutting scissors.
3.In Economic Aspect
In the case of employment, employees do not need to take the risk of economic loss. While in partnership, the self-employed individuals may need to take the risk of part of the loss.
Also, on the issue of tax and Mandatory Provident Fund (MPF), employers would declare the income tax return for their employees, while self-employed individuals would have to complete the procedures by themselves.
Yet, the difference may still be unclear. Always remember that only the court could make the final judge.
For the case of Uber Eats Hong Kong, according to chairman Wong of HKFSU, the riders involved in this case had been working for Uber Eats for 2-5 years, with working time and area fixed by Uber Eats, and working 6-7 days each week with 9-12 hours per day. They must apply leaves in advance, and sick leaves must be applied at least 1 hour in advance. “Moreover, as the riders are restricted by factors such as completion rate of orders, it is no doubt that UberEats dominates most part of the work. Thus we consider this relationship as employment rather than partnerships.” Chairman Wong added.
Suggested Method for Companies to handle
To avoid dispute on the employment status gray zone, employees should check all the conditions carefully before signing any employment contracts.
But how about the companies?
1.State clearly if the contract is for “employment” or “partnership”
Despite verbal explanations, companies are strongly suggested to WRITE clearly, “employment” or “partnership” on the contract itself, for the sake of companies themselves.
However, the written content on contract is not everything. Same to the case of Uber Eats, if there are conditions that bring doubt to the employment status, such as actual work schedule and content controlled by the companies’ side, even if the contract is written as “partnership”, it would probably bring dispute to the relationships.
2.Treat the workers as employees anyway
The safest method is to treat your workers as employees. But expenses such as workers’ compensation insurance, tools and MPF would increase in this case, so it would be better to consider the cost balance before taking the action.
MAY Planning provides support on human resources management to serve your company’s needs. We would be glad to provide guidance for your company in Hong Kong or overseas. Feel free to contact us anytime.
5 Solutions to Great Changes of Consumers’ Habits under COVID Pandemic
Despite lasting over 2 years, the COVID-19 pandemic still has no signs of ending. Numbers of digital consumers are growing sustainably, and online shopping together with electronic payment methods are becoming the new normal in our daily life.
In this blog, we are going to introduce 5 trends about the new consumers’ needs that businesses are facing, and the related solutions, based on the new published report of Adobe.
In February 2022, Adobe and Econsultancy published the “2022 Digital Trends – APAC in Focus” report, analyzing the digital trend from data of over 943 senior managers, IT and marketing professionals, answered during the period of November 2021 to January 2022.
Duncan Egan, the vice president of Marketing APAC at Adobe, found that digitization changed the way of thinking of the consumers from APAC. Therefore, businesses should understand more about these new consumers who value digitalized and flexible solutions much. The solutions for coping with this trend suggested by Adobe could be divided into the 5 following directions:
1）Understanding New Consumers, Speed-up the Transformation
According to the report, 77% of the interviewees responsible for APAC Marketing have the opinion that businesses have to develop new and speedy customer experiences in order to maintain and expand their customer bases.
Especially under the COVID pandemic, digital marketing is very important. 49% of the APAC enterprise leaders expressed their intention of putting digital marketing as their main development direction. As marketing officers would need to improve their marketing strategies using various ways and data, businesses should invest their resources to the related area and recruit insightful talents in order to catch this business opportunity.
2）Improving Customer Experiences, Providing Personalized Services
From the interview results in the report, we could find that most of the APAC enterprises are placing acquisition of new digital customers as their top priority, and maintaining current customers as the next. In order to acquire new customers, improvement of customer experiences would be a must and digitalization of business processes would help much with this. 38% of the interviewees see “digitalization” as the pivot of customer experience improvement, while over 54% of the enterprises are putting effort on investing their software for managing work flows and work items, also
Productivity enhancement and providing personalized services to customers.
3）Valuing Flexibility to Retain Talented Employees
92% of the report interviewees see “flexibility” as the pivot of successful marketing. However, there are only 25% of employees who rated their companies’ flexibility on transformation and correspondence for over 8 points out of 10 points. Companies’ lack of flexibility would bring further stress to the marketing officers and make marketing to customers more difficult, eventually causing talent drain to themselves.
According to Scott Rigby, the Head of Digital Transformation for Enterprise Solution at Adobe, 84% of the APAC enterprises are predicting that the speed of change on technology and society would remain unchanged or accelerating. Technologies up-to-date and flexible correspondences would become the key point of the future enterprise development.
4）Cooperation of IT and Marketing
The senior management interviewees are seeing the synchronized pace between marketing teams and IT teams very important to their businesses. 92% of IT team managers in APAC enterprise think their team is cooperating with the marketing team more closely compared to the past. As marketing officers could concentrate on their strategies of customer experiences, IT teams could also put more effort on analyzing and implementing digital transformations for their enterprise, both teams should carry out more cooperation.
5）Acquiring Customers’ Confidence
Customers’ confidence is a very important element for every brand, and personalized experience is one of the strong methods to acquire customers’ confidence. 48% of the APAC enterprise interviewees stated they have not prepared a marketing environment without any third party Cookie. This may affect the enterprise’s creation of personalized customer experience in the future.
According to the report, IT officers are responsible for the security and rightfulness of the business’s data. Enterprises should use primary data, for example using AI to customize browsing experiences, and recommend related products based on customers’ online and offline behaviors. By offering more personalized experiences to customers, businesses could motivate their customers’ willingness to consume, and thus improve the business results.
MAY Planning provides support on digitalization of your business process, suggestion and implementation of IT solutions. Support for solutions to digital trends are also available. Feel free to contact us anytime.
Wellness Trend! Hong Kong’s Market seeking for “Healing”
What do you feel about Hong Kong’s living pace and style?
Most may feel that Hong Kongers usually live with a speedy pace and highly stressed living environment.
The COVID-19 situation lasting for over 2 years is no doubt one of the reasons why it has been more stressful in recent years. According to the survey of 24/7 Tempo conducted in 2020, Hong Kong was the top stressful city in the world.
On the other hand, Hong Kongers nowadays, especially the young adult segments, are becoming more conscious of both physical health and mental health. Hong Kong’s way of “Healing Trend” is now happening, and some brands are making use of this chance to further build up their business. The “Healing Trend” is expected to have its continuous growth in the future.
In this blog, we are going to introduce some examples of business related to this trend and the reasons why Hong Kongers are seeking “healing” from these services and products.
“Wellness” market’s continuous growth in the world
Facing the COVID-19 situation is just like being forced to run a marathon without goal. It brings much stress to people and people from all over the world are becoming more valuing “wellness” in their life.
“Wellness” does not only mean physical health. McKinsey & Co. has conducted a survey in 2021 on how the consumers feel about wellness. The survey concluded the opinions of 7,500 interviewees from 6 countries, and the result shows that 79% of them see wellness, which include physical health, fitness, nutrition, appearance, sleep and mindfulness, as important to their life. 42% even answered that wellness is the most important element in their daily life. Looking from the economic aspect, the wellness market in the world is as huge as 1.5 trillion USD, and would be growing at a 5%-10% growth rate in the future as estimated.
Business under Hong Kong’s “Healing Trend”
In order to face the stress in daily life, consumers used to get their living pace down on holidays and day offs. Maybe because of this reason, there are some shops in Hong Kong able to keep their sales up to 5-6 digits of HKD each month stably, and even expecting a growth rate of 20% in the future, despite starting their business in these 2 years deeply affected by COVID-19.
HKET interviewed a Japanese tea ceremony themed restaurant and a shop selling Taiwanese incense in 2021, and pointed out a few reasons of “Healing Trend’s” growth in Hong Kong:
・As wellness is being valued in the entire world now, not only industries related to physical health, but also the ones related to mental health are growing continuously.
・The COVID-19 has brought the world a new task, making people forced to face stress and anxiety. As the result, people started to be more conscious of mental health.
・Popularization of social media: traditional cultures such as singing bowls and Japanese tea ceremonies were difficult to reach consumers’ sight in the past. However in recent years, taking photos and selfies during workshops and uploading to social media is becoming a routine among people. The posts become a kind of advertisement for the business and lead more people to be interested in the services and products, which eventually expand the consumer base.
・Although the COVID-19 situation is now more stable, Hong Kongers who love to enjoy overseas trips are not able to travel around for a long period of time, which makes them more longing for overseas culture experiences.
In view of these shops’ business strategies, both of them are running physical stores and online shops at the same time. Despite having their social media such as Facebook frequently updated, they also regularly open Japanese tea ceremonies and incense workshops which are related to their products.
For many Hong Kongers, taking care of mental health is still a very new concept. Some of them may blindly run into expensive products without getting enough understanding of a new concept. This would in fact make it more difficult to take root in the services and products. It is better to deliver the brand concept through workshops as an introduction to the consumers. Letting them to feel the advantages of your products would help them build up their own experience, and eventually make them take root in your brand in the future.
MAY Planning provides support on your expansion and promotions to the Hong Kong market. Support for advertising on social media such as Facebook and Instagram, arrangement of workshops are available. Feel free to contact us anytime.
“KOL” and Live Commerce, the New Commercial Trend in Hong Kong
The COVID-19 situation in the world has changed people’s consumer behavior. Internet and online shopping are becoming part of our daily life, and e-commerce is developing as an important part of business.
VS MEDIA in Hong Kong has conducted a survey on Hong Kong citizens’ consumer behavior under the COVID-19 situation. 75% of the interviewees answered that they would believe in services and products which are recommended by “KOL”.
They see “KOL” to be powerful influencers even in the post-COVID-19 era, bringing “social commerce” and “live commerce” as a new trend of commercial trend to the market.
What is “KOL”? What is “Social Commerce” and “Live Commerce”?
“KOL” is an abbreviation which is commonly used in Hong Kong meaning “Key Opinion Leader”. It is also be called as “網紅(Wanghong)” in Chinese and “インフルエンサー(Influencers)” in Japanese.
Specialists of particular fields such as athletes, entertainers and fashion models would be good examples of KOL, but there are more of YouTubers, bloggers and ordinary people who have significant influence becoming KOL nowadays.
“Social commerce” is a mix of social media and e-commerce. It means the influencing technique of sending consumers from social media posts to product’s online shopping page through just clicking on the posts.
“Live commerce” is one kind of social commerce where KOL would introduce products by showing on hands or even demonstrations, which is believed as a more trustable sales method compared to the others. On 20 October 2021, the Chinese Online Mall Taobao’s top KOL made as much as 10.65 billion RMB (about 1.65 billion USD) sales in only a single day. This shows how powerful has live commerce grown nowadays.
Rapid Growth of Hong Kong’s Usage Rate of Smartphones and Internet
Both social commerce and live commerce requires consumers to use internet services. So how is the usage rate of IT related products in Hong Kong nowadays?
Referring to the “Women and Men in Hong Kong – Key Statistics (2021 Edition)” published by the Census and Statistics Department (C&SD), among Hong Kong citizens who aged 10 or above, 79.8% answered that they have used computer in the past 12 months, while 92.1% answered that they have smartphones. It shows that smartphones would probably become Hong Kong citizens’ mainstream in the future due to the more affordable price and simplicity of use.
There is also a rapid growth in the internet’s usage rate. With the same interviewee groups, 92.4% answered that they have used the internet in the past 12 months, which shows a significant growth compared with the year 2001 (43.3%).
Among Hong Kong citizens’ aged 15 or above, the percentage of having online shopping for personal use has grown 8 times, from 5.6% to 43.1%, in the past 20 years (2001-2020).
Also according to the data of NielsenIQ, comparing 2019 to 2020 when the COVID-19 broke out in Hong Kong, the online consumption amount per family increased by 46%. Consumers’ online shopping frequency increased by 75% while the amount spent increased by 52%, which is 2.5 times compared to the amount spent at physical stores in the same period.
Online Shopping and KOL Trend in Hong Kong Market
VS MEDIA conducted an online survey in July 2021, on “consumers’ online shopping habit and KOL’s influences”, to Hong Kong interviewees aging 18-45. It showed that Hong Kong citizens are on average spending about 2,673 HKD (about 340 USD) every month on online shopping, and they are becoming more concerned about the comment of the product and online shop compared to the past.
Above 90% of the interviewees showed interest in products and services that KOL recommended, with “restaurant and gourmet” being the most popular topic. “Cosmetics and beauty” is the top category for women, while “electronics product” is the top category for men.
Above 80% of the interviewees said they have experience of watching a live commerce stream, and pointed out the attraction points of it as bellows:
・Discounts and campaigns only available during streams
・Knowing more about the products through demonstrations
・Quantity limited items only available during streams
・Sales point of the products being accurately mentioned
・Useful information about the items
78% of the interviewees said they would not mind the streams having indirect advertising as long as the content is funny. 73% even said they would trust the recommendations and experience sharing of KOL even if they know there is advertising or commercial collaboration in the content. Also, 77% of the interviewees show they would more believe in the recommendation of KOL rather than that of idols and entertainers, and they feel more willing to purchase the recommendations of KOL as they think those would become a key item of the trend or fashion.
On the other hand, 65% of the interviewees showed an aspiration of becoming a KOL by using their own hobbies and skills, mainly because of the highly flexible working style with high income. However, about 70% do not know about the requirements and equipment of being a KOL, and 75% said they hope there would be companies providing one-stop supporting service from shooting to production.
As the usage rate of IT related items increases nowadays, the efficiency of advertising on paper media and TV has been reducing. It is obvious that the internet would become the main stream of advertising in the future. KOL show their influencing power on affecting the young adult segment’s purchase intention by using social commerce and live commerce skills. It would surely be an advantage if companies take up these strategies to their marketing plans.
MAY Planning provides support on your expansion and promotions to the Hong Kong market. Support for advertising on social media such as Facebook and Instagram, live commerce strategies by KOL are available. Feel free to contact us anytime.
Fact of Hong Kong Population and Labor Market! Statistical Report of 2021
The Census and Statistics Department (CSD) of Hong Kong Government has issued the “Women and Men in Hong Kong – Key Statistics (2021 Edition)”. This statistical report is being issued each year, and the statistics cover widely from population structure to education, labor, medical and diffusion rate of internet usage. As there is data of the year 2020 and also the previous years, it is an important index to know about the transition of Hong Kong’s society. Here we are going to introduce the impact brought by the series of activities from 2019 to Hong Kong’s population and labor market now based on this statistical report.
Impact to Hong Kong’s population structure
The series of activities, including the Anti-Extradition Law Amendment Bill Movement in 2019~2020, the implementation of Hong Kong national security law, and the COVID-19 situation from 2020, brought a great impact to Hong Kong not only on the economic side, but also on the population and labor market.
On the population side, it can be found that Hong Kong has had its population increasing continuously for the past several decades, but got a decrease in the year 2020’s data. Despite the decrease of birth rate which can also be found in the past decades, the population drain such as emigrations would also probably be one of the reasons.
Based on the CSD’s statistical report, the population, including foreign domestic helpers, in Hong Kong in 2020 was 7,481,800 (female 4 065 500, male 3 416 300).
Compared to the same data 14 years ago (female 3 587 000, male 3 270 100), both female and male got an increase, while the increase rate of females is 3 times of male’s.
However, despite the rapid increase, the year 2020’s data got the only decrease, which was about 25,000 less, compared to the previous year’s population.
The Hong Kong Institute of Asia-Pacific Studies of the Chinese University of Hong Kong conducted phone interviews about emigrations with 716 Hong Kong citizens from 16 to 25 September 2021. It shows that 42% are considering moving out from Hong Kong, while 12% among them are considering moving out to mainland China.
On the reasons of their consideration, 22% suggested “liberty and human rights”, 18% suggested “the spacious living space and environment overseas”. For the ones who are considering to move out from Hong Kong, 38.7% answered they had already started their preparation of emigrations, and the popular destinations are the United Kingdom (26.1%), Canada (14%), Australia (11%), and Taiwan (7.5%). The ones who are considering moving to mainland China expressed their reason as “unaffordable housing price, constrained living space, high cost of living and severe economic prospect”.
Impact to the labor market
On the labor market’s statistics, it shows there was a great increase over the past 30 years, while the data changed to a continuous decrease starting from 2018 (data collected in 2019).
In the past 30 years, the number of Hong Kong’s employees increased for 38.7% from 2,800,000 in 1991 to 3,890,000 in 2020. The number of female employees increased by 85.9% while male employees increased only by 10.5%. Female foreign domestic helpers would be one of the reasons, but the main reasons are popularization of higher education among local females, increased number of unmarried local females and age at marriage becoming late.
However, comparing 2020’s data to 2019’s, the number of male employees decreased by 103,100 while female employees also decreased by 85,300. It shows that there is a significant decrease of employees in these 2 years for both male and female.
Reasons of decrease on employees’ population
According to Hung Wong, the associate professor of department of social work, the Chinese University of Hong Kong, this phenomenon has various reasons behind. The 2 main reasons would be:
1．Decreasing number of graduates
2．Part of the employees moving out of the labor market
Especially for the moving out from labor market, there could be 3 more reasons which lead:
People of age 50~69 are actually still labor force in the labor market. However some of them may take their choice of early retirement instead, due to the scarcity of employment. They are so called as “discourage workers”, which is different from the government’s definition of unemployment.
People of age 30s choosing to leave their current work and move to other countries can often be heard.
3．Decline of labor market
There might be a possibility that the employers are not willing to hire young people, and the young people also are not willing to work as employees, due to various reasons.
To conclude, the data of population and labor market of Hong Kong shows that Hong Kong citizens’ hope for the future has been fluctuated by the series of activities since 2019. There is a significant trend of increasing numbers of Hong Kong citizens willing to move out of their home, Hong Kong.
Reference: Census and Statistics Department of HKSAR (2021). “Women and Men in Hong Kong – Key Statistics (2021 Edition)”
MAY Planning provides support on recruitment and human resources management to serve your company’s needs. We would be glad to provide guidance for your company in Hong Kong or overseas. Feel free to contact us anytime.
COVID-19 Moves the IT Industry into A New Era
“The Covid-19 outbreak pushed digitization forward for 8 to 10 years.” said by Mok Wai-hin Peter, head of Strategic Partnership at Hong Kong Science and Technology Parks Corporation.
Digitalization is already underway in almost every organization. The business model has shifted from intensive manpower to light manpower with technology and innovation equipments.
“Before the crisis, it have to take a year to implement the level of remote working but now it took an average of 11 days to implement a workable solution”
Some companies acted 20 to 25 times faster than expected. In the case of remote working, people actually say their companies moved 40 times more quickly than they thought possible before the pandemic. Before then, respondents say it would have taken more than a year to implement the level of remote working that took place during the crisis but it took an average of 11 days to implement a workable solution, and nearly all of the companies have stood up workable solutions within a few months.
According to statista.com, all Information technology (IT) spending are forecast to return to growth in 2021. Enterprise software (e.g. ERP, CRM) is expected to have the strongest rebound (8.8% growth) as the remote work environments are expanding.
Company strategies are changed. For example, a Japanese company, Fujitsu Ltd. said it would split its office space over the next 3 years to encourage around 80,000 employees of electronics maker to work remotely.
IDC Spending Guide 2018 estimated that spending on technologies and services that enable digital transformation will reach almost US$2 trillion in 2022 worldwide. Brands and companies have started to get a better understanding when it comes to the benefits of digital transformation and digitally native offerings.
Information technology development requires long-term investment. MAY Planning has strong experience on integration of digital technology into all areas of a business, fundamentally change how your business operate. We will be pleased to provide consulting service for your company in Hong Kong or overseas, please feel free to contact us anytime.
Published: 26 Jan 2021
5G network in Hong Kong and How will 5G impact business and the world?
5G is the 5th generation mobile network. It is a new global wireless standard. 5G wireless technology is meant to deliver faster speeds, ultra low latency, more reliability, greater load capacity, increased availability, and a more uniform user experience to more users. Some researchers believe that 5G could deliver 10 – 20 times faster than 4G.
Sending a message at 6pm in Central station will no longer be a problem
In 2019, the Government planned to make available a total of 160 MHz spectrum in the 600/700MHz bands to enhance indoor hotspots and the network capacity of indoor mobile telecommunications services which would help relieve congested traffic indoor mobile hotspots, such as MTR stations. The earliest release date (available for release to the market through auction, tendering or other appropriate) will be in 2021. The decisions will be made in the first quarter of 2021.
The 85 MHz of spectrum in the 700 MHz and the 850 MHz bands can be deployed in both indoor and outdoor locations for the provision of public mobile services; while the 70 MHz of spectrum in the 600 MHz band is designated for indoor use to enhance the mobile services provided at indoor hotspots, such as shopping malls and confined areas like premises inside the Mass Transit Railway.
5G will change the world
–For business (For example, an enterprise tool)
5G helps to upgrade on the existing system. With 5G, over 1 million devices can operate within the same area which is a 250 times growth in capacity. 5G is nearly 8 times faster in speed and boasts of more than 5 times the bandwidth. 5G is a critical enterprise tool to accelerate digital transformation, particularly in their supply chain management initiatives.
–For our life (For example, autonomous cars will be on our roads)
5G network will offer new application options advancing the development of autonomous cars. Drivers running red lights will become a thing of the past. Traffic jams will be reduced or eliminated as self-driving cars can drive in closer proximity to each other. Also, autonomous cars don’t slow down to rubberneck. Tesla founder Elon Musk says Tesla will release its ‘full self-driving’ feature as a subscription in early 202. Apple’s plans to develop an electric and driverless car featuring its own battery technology are reportedly back on the table, with a new target production date estimated for 2024.
Lots benefits of 5G for our life or for our business that I couldn’t mention in one time.5G allows organization hiring process will not limited to the candidates location. Some organizations are going to have a remote team in their company by hiring top talent outside of their local area. Businesses will rely on mobile networks more and more. They will need to work with IT specialists to redesign and improve their internal work efficiency.
MAY Planning provides professional IT consulting services to meet your expectations. We will be pleased to provide guidance for your company in Hong Kong or overseas, feel free to contact us anytime.