Commentary

Retailers gearing up for 2020 may have been urged to double down on technology to deliver the elusive optimal customer experience that hits all the right notes across the virtual and physical worlds of commerce. However, even as the expectations of the next generation consumers are at an all-time high thanks to unrelenting tech evangelism, retailers from Singapore to Hong Kong remain divided on differentiating trends from fad and investing in the latest retail tech obsession du jour.

Small and medium enterprises now represent a major engine of growth for Asia, comprising over 97% of all businesses in the region and making significant contributions to the region’s economy. It’s a similar story here in Hong Kong, where over 98% of business establishments are SMEs, considered by the Government to be “of crucial importance to the development of our economy.”

People in Hong Kong are taking the future of work into their own hands.

Actively managed investment funds are important. Amongst other benefits, the capital pooled and invested through such actively managed investment funds provides financing for innovative new industries and technologies, which in turn drives broader economic development and growth. Hong Kong has for a long time realised this and successfully supported the growth of such active asset management industry here, providing one of the limbs that makes Hong Kong a truly great global financial centre.

Asset Protection Trusts (APT) can be used by anyone to protect their assets. There are many advantages to using APTs which include shielding assets from political instability in one’s home country, protection from litigation from creditors, protecting beneficiaries from wasting the assets and even providing protection against your assets being taken in a divorce.

No waiters, no diners: the food delivery boom is opening new doors for restaurants.

Today, most big businesses in Hong Kong will have some form of in-house legal function. In an environment where regulation and legislation are constantly changing and more companies are operating on a pan-Asian basis, it is essential.

"Asian markets and customers are much too price sensitive!" "We are experiencing 20%+ growth. Why do we need to fix pricing? In Asia, it's about growth!" These are common beliefs about the Asian market. However, they are generic and in many cases inaccurate. This article will look at why pricing in Asia is different to the rest of the world, and how to manage those differences. Asia consists of four major regions, China, India, North East Asia (Japan and Korea) and South East Asia (ASEAN). There are significant differences with respect to pricing between these regions. Hong Kong is not only a big regional center but also quickly becoming an important route into China. This article will reflect mainly the perspective of the chemical industry, focusing on each region separately. Four unique elements of pricing in Asia There are four unique elements of pricing in Asia: 1. The GTM and channel model makes pricing complex. 2. There is an over-reliance on volume-based rebates as incentives in pricing. 3. FX volatility has an ongoing impact on pricing. 4. Cultural norms influence how price discussions are made. We will evaluate the relevance of these elements in each of the four regions in Asia. 1. GTM and Channel The GTM and channel model tends to be complex in Asia, especially in China and India. First of all, the number of channel partners is high. In some cases, like in agro-chemicals in China, it's not unusual to have ten channel partners between the supplier and end customers. Each channel partner takes a share of the commercial terms offered by the suppliers, this makes it difficult to estimate the share of each and the price to the final user of the product accordingly. Hong Kong based corporations would be better at managing the operations in China vis-à-vis corporations based in the Europe and US.

There is no secret of the tumultuous times in Hong Kong right now. Almost one third of the Hong Kong population has protested in the streets, fighting against the proposed Chinese extradition bill.

Hong Kong topped the list as Asia’s most natural disaster-prone city in 2015, according to the Sustainable Cities Index. A few years have passed by, but business risks caused by disasters, such as storms and floods, have only expanded. Last September, Super Typhoon Mangkhut has caused damages and broken windows of even grade-A commercial buildings, including two of the city’s highest structures, International Finance Centre and International Commerce Centre. With over 60,000 reports of fallen trees and more than 600 road blockages , traffic was largely disrupted and so was business operations.

Hong Kong’s seasonally adjusted unemployment rate currently stands at 2.8% the same as it has done for fourteen quarters. This, together with a shrinking talent pool and skills shortage, has meant that the HR sector as a whole has become adept at initiating creative strategies to identify, recruit, nurture and retain talent. All this whilst fending off other companies eager to hire staff away in a market driven by the job-seeker.

The new Individual Income Tax Law, which came into force in China on 1st January 2019 (“New Tax Law”), is a strong response to the strong criticism and social discontent under the previous legislation.

Hong Kong citizens are heavy road users, with over 12.6 million passenger trips on public transport taken every day, and 354 licensed vehicles for every kilometer of road in the city. The congestion costs residents 36% of extra commuting time per year, compared to free-flowing traffic. The city is proud of its public transportation systems and citizen mobility in general, but it can still drive more efficiencies.

According to Hong Kong Police statistics, financial losses due to cybercrime reached $2.77b in 2018 in the territory, almost doubling the figure for 2017. As technology becomes more sophisticated and ubiquitous, cybercriminals’ skills and tools are evolving and cybersecurity experts are having to work harder to catch up.

Hong Kong is emerging as a digitally sophisticated nation being named by The Digital Evolution Index, the third most advanced digital economy in APAC, and the ninth in the world. The city was named as one of just 10 digital elites, characterised by high levels of digital development and a fast rate of digital evolution. Further, according to the Asian Digital Transformation Index, Hong Kong is recognised as one of the top thriving economies thanks to new-age, digital capabilities– only behind Singapore, South Korea, and Japan. It’s predicted that digital transformation will add $70.6b (US$9b) to Hong Kong’s GDP in the next three years, and increase the economic growth rate by 0.5% every year. Digital technologies such as cloud computing, Internet of Things and artificial intelligence contributed only 5% to Hong Kong’s GDP last year, and is expected to grow in value by a whopping 60% by 2021. If that doesn’t paint a clear enough picture, another telling sign that Hong Kong is a digitally ready nation is that consumers are themselves adjusting rapidly to a digital future. Additional research conducted by Verint and Opinium Research LLC, drawing on interviews with more than 2,000 people in Hong Kong, show that Hong Kongers are more comfortable than their regional neighbours having their enquiries attended to digitally. Whilst they like to speak to someone in person or on the phone for support at times (55%), this will drop to 50% in the next 5 years when 1 in 2 customers will turn to pure digital channels for support include AI-driven technologies, chatbots and virtual personal assistants.

By Wen CHEN, Principal at Oliver Wyman