Brands that act with empathy win trust of Hong Kong consumers
An IPSOS report showed that consumers’ trust towards businesses has been eroding.
Consumer-reliant businesses such as those in fast-moving consumer goods and retail sectors are facing a challenging year as consumer trust towards brands in Hong Kong continue to erode. To regain trust, firms have to start delivering offerings with empathy.
“An important reason for this lack of trust is consumers believe that inflation is partly due to businesses being too greedy. Of course, when consumers feel businesses are putting their own commercial priorities before the interest of the wider community, trust is bound to be eroded,”
Javier Calvar, group service line leader at IPSOS, told Hong Kong Businesses.
“To regain trust, brands need to understand consumers’ expectations, the context in which they live their lives,” Calvar added.
He said brands can act with empathy either by “redefining value for customers.”
“[You can offer] value packs, more benefits to your products to justify your prices, position your products as self-reward, and ensure that [your] product portfolios cover a wide range of price points,” he said.
Calvar underscored that brands need to develop long-lasting trust-based relations with consumers because it is the only way for them to build loyalty and grow their market share.
“It is fundamental for brands to understand the community they’re meant to serve, to understand the expectations that consumers have when they buy their products or services, to understand the context in which they use and consume those products and services, and to engage with their target segments with a degree of empathy,” he elaborated.
“All that needs to be placed in a context of diversity. [The] Hong Kong consumer base is not a homogeneous group, you have all the consumers whose needs are very different from the needs of younger millennials or audiences. It is a complex task, but something that businesses must address as a matter of priority if they want to induce sustainable consumption,” he added.
The task of regaining consumer trust and confidence, however, should not be shouldered by businesses alone.
An IPSOS study stated that business and government must work together to achieve this goal.
As businesses need to complement what the government does, Calvar said the government should also work to create a sense of stability and differentiation.
“By creating a sense of stability and differentiation, opportunities will emerge and that will create a positive sentiment amongst consumers,” said he said.
Creating a sense of stability and differentiation would also help prevent businesses from leaving the city, said the expert from IPSOS.
“When you look at Hong Kong before the pandemic, Hong Kong had an edge by being so close to China’s Mainland, whilst at the same time being very much connected to Southeast Asia. That needs to come back,” Calvar said.
“There is a need to maintain a strong connection with the Mainland, but we still need those connections to Southeast Asia and the rest of the world. If we get that stability and dedifferentiation elements, then that will create opportunities, and that will attract not just businesses to stay, but also new businesses to come and contribute and benefit from Hong
Kong’s economy,” he added.
Data from IPSOS showed that 41% of Hongkongers believe businesses in the city will leave.
Some 40%, however, still believe that the business community in the city will remain stable.
“What you have here is the lack of clarity about the future of Hong Kong. This is symptomatic of the economic environment in which we are living in.
“Consumers are looking at reality perhaps through a pessimistic lens. There is also an element of nostalgia here believing that the old days were better than the days that we’re currently living through,” observed Calvar.
Whilst it is hard to say if these pessimistic perceptions would dictate general sentiments, Calvar said businesses leaving or staying will really depend on which sector they belong.
“We need to look at the situation through the lens of sectors,” stressed the IPSOS expert.
“I think where the business relocates depends on a number of things, one being the strength of the industry they operate in. For example, the financial sector has been historically a mainstay of the Hong Kong economy. So, players in that sector are unlikely to relocate.”
Calvar also said the relocation of businesses will depend on whether they look at Hong Kong through a “short-term” or long-term lens, as well as their view on the Mainland