IN DETAIL: GLOBAL SUPPLY CHAIN
Future of Sourcing Hong Kong has a significant and evolving role in the global supply chain as long as it adapts to digitalisation to stay relevant as a sourcing hub. – By Anson Bailey
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any of the corporates that are vital to the development of Hong Kong and the wellbeing of its people are in the sourcing industry and wellpositioned to tap future opportunities brought about by digitalisation and growth. Hong Kong has some unique characteristics that are attractive to corporates. Besides the finance, tax and legal systems that are key advantages for doing business here, the city’s expertise in the sourcing industry, an efficient and can-do work ethic, the integrity and reliability of people here are just some of the reasons why companies come and stay here. A more digitalised future and industry-wide efforts to address Environmental, Social and Governance (ESG) considerations will open new opportunities for the industry, the city and its people. KPMG discusses Hong Kong’s significant and evolving role in the global supply chain in its recent report, Future of sourcing: 2021 and Beyond, commissioned by InvestHK1.
Where is the next Hong Kong? A ‘China plus one’ strategy is common among manufacturers. Vietnam, for example, has been one of the key locations for diversification due to its geographical proximity to mainland China. Other ‘plus one’ destinations are Cambodia, Bangladesh, Malaysia and Indonesia, to name a few.
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Hong Kong, situated between mainland China and Southeast Asian countries, has a busy international container port, a well-connected international airport, myriad free trade agreements and local workers with considerable language skills. In sum, it is a good place for companies to place their supply chain hubs and controlling offices. Anne-Laure Descours, Chief Sourcing Officer at PUMA, says that the flexibility and adaptability of people in Hong Kong is key to the city’s efficiency.
Technology and innovation are the future of sourcing COVID-19 has accelerated the changes in the industry. Sourcing and supply chains have both been heavily affected by it. This industry is crucial to enabling citizens and companies to continue with their day-to-day life. However, in a wake-up call for us all, the industry was not prepared for the evolution of people’s lifestyles. Analytics capabilities exist in India; new fabrics and materials are being developed in South Korea and Taiwan – Hong Kong will need to adapt in terms of digitalisation to stay relevant as a sourcing hub. We expect to see predictive supply chains and product development along with accurate calculations of supply to match demand. But when will this happen? There are start-ups and talent in Hong Kong developing solutions for the sourcing industry. The speed of
