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Deloitte China Partner on how businesses can regain consumer confidence

Falcon Chan joins the panel of judges at Made in Hong Kong and Designed in Hong Kong Awards 2020.

Falcon Chan is a management consultant and leads Deloitte China's M&A Consulting Services in Southern China. He also serves as the TMT Sector Consulting Lead in the southern region and Hong Kong Office Champion driving the firm's talent and inclusion agendas.

Falcon has extensive transaction advisory and strategy consulting experience, supporting multinational corporations, private equity funds and diversified conglomerates in Asia. His primary focus includes market entry and expansion strategy, corporate venturing, innovation ecosystems, due diligence, merger integration and digital transformation programmes.

As one of the judges at the Made in Hong Kong and Designed in Hong Kong Awards 2020, Hong Kong Business sat down with Falcon as he discussed his professional experiences in his career, what businesses can do to recover from the crisis, and where the opportunities are for entrepreneurs.

Which particular markets or sectors are your main focus? Can you share with us your work experience or any backstory that has contributed to your professional career?
I began my career as an ecommerce technologist in Toronto after graduating with an engineering degree. After several years, I moved into management consulting, first with Deloitte Canada and later joining the Consulting practice in Hong Kong. Fast forward, I currently lead Deloitte China's Strategy and M&A Consulting services in the southern region, supporting clients across retail and consumer products, financial services, technology, private equity and manufacturing sectors.

Culture, social impact and talent cultivation is another important topic for me. I serve as the Hong Kong office champion for the Strategy & Operations Consulting team. In this capacity, I work alongside our energetic practitioners on community and social outreach, as well as advancing our firm's shared values for diversity and inclusion.

My team and I are passionate about the opportunities brought forth by continued investments in innovation and technologies, where I&T will continue to be major drivers of socio-economic growth for Hong Kong. To this end, we have been engaging various public sectors, quasi-government bodies, industry associations, enterprises and startups to spark the sustainable growth of R&D, entrepreneurship and technology ecosystems. This comes at a critical juncture as we anchor Hong Kong's position as an international finance, aviation, and I&T hub and support the city's integration within the Greater Bay Area.

The pandemic has placed undue strain across industries, with the retail sector hit hard. How can the retailers stay resilient in these trying times and how to regain consumer confidence?
The pandemic has created uncharted waters for businesses across industries. As we enter the COVID-19 fourth wave in Hong Kong with further restrictions, this has forced many retailers to adopt an "innovate or perish" mentality. For the first 10 months of 2020, total retail sales in Hong Kong dropped by 27% compared with the same period last year. These are pivotal times.

The crisis has highlighted how critical agility and rapid innovation can be. To thrive, companies need to be able to innovate quickly, both now and after the crisis subsides.

We have seen new patterns of consumer behaviour and expectations emerge, shaping a new normal. In the past months, buying patterns rapidly shifted to online for daily essentials and groceries. This has pushed traditional offline players into the digital space, creating a new status quo that may sustain well into the future. Whilst established ecommerce platforms such as HKTV Mall have enjoyed marked growth in this period, the sharp rise in online demand requires agility to adapt operating models, supply chain and fulfilment operations.

In many ways, COVID-19 has acted as a catalyst to deepen consumers' digital acceptance, spurring merchants to up their digital game. Social listening is key. For example, we have observed a divergence in consumer purchasing behaviour. Some splurge on retaliatory purchases in response to social distancing fatigue, whilst others lose purchasing power due to the direct and indirect effects of a slower economy, making good value more important.

Retailers will need to prepare a set of medium to long-term countermeasures to improve their competitive position. This includes exercising more stringent control over cashflows, actively seeking out further financing and investors, and restructuring if necessary. Companies should also accelerate the pace of digital transformation. Along the journey, brands that show authentic empathy and resonate with consumers' demands at key moments will be critical.

What are the opportunities for entrepreneurs in Hong Kong and the Greater Bay Area in the middle and post-pandemic era?
I believe our entrepreneurs are change agents. They embody the 'can-do' spirits of Hong Kong. The city's long enduring economic success is the result of our ability to innovate and stay relevant through the generations.

Uncertain times call for agility, adaptability and innovation.

The crisis will have long-lasting ripple effects to the Hong Kong economy and people, yet also presents new opportunities. For one, it has spurred Hong Kong entrepreneurs and businesses to unite and join hands. This is evident in public and private sector joint efforts, such as Cyberport's Braving the Epidemic campaign where community startups pivot from their core businesses to offer novel anti-epidemic technology solutions.

Opportunities also abound in the cross-boundary integration efforts. The 2020 Policy Address announced on 25 November took on a key theme to expand global and Greater Bay Area connectivity for Hong Kong. The Address highlighted the closer innovation and technology cooperation with Shenzhen and the Greater Bay Area, further promotion of smart city by the government, launch of the Greater Bay Area Youth Employment scheme with a provision of 2,000 places including several hundred set aside for the I&T sector, and the Global STEM Professorship Scheme to draw overseas R&D talents to the city.

The new policies offer a solid footing for sustainable I&T ecosystem development in Hong Kong. These will encourage further talent and knowledge exchange, as well as cross-border collaboration on research commercialisation and market expansion opportunities.

The key to success of the Greater Bay Area will be in working together and complementing our respective strengths.

What are your thoughts on the entries for this year’s Made in Hong Kong Awards and Designed in Hong Kong Awards?
I am honoured to be invited by HKB as a judge for this year's Made in Hong Kong and Designed in Hong Kong Awards. The entries presented by the candidates all exemplify the proud entrepreneurial spirit, ingenuity and creativity of our local talents here in Hong Kong.

Whilst the individual products cover a diverse range of industries from healthcare, technology solutions to consumer products, there were a few common themes that resonated with me. One is the concerted effort to address the sustainability topic, with many incorporating green and eco-friendly elements into the design and production processes. Equally important is the social good contribution, be it enhancing lives of the elder population or encouraging knowledge sharing and exchange through technology-enabled solutions. Finally, a number of products were made in direct response to the pandemic situation and balances health, safety, convenience and value that are top of mind for consumers in the new normal.
  

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