A month-by-month review of Hong Kong’s top stories in 2022

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Architects to remodel Hong Kong into a greener, more future-ready city

Sustainability drives have long emerged in an attempt to mitigate the worsening climate crisis, a lesson learned in the hard way. In light of this, Hong Kong architects expect that the city will be remodeled to have a greener design. On top of this, Hong Kongers will likely see infrastructure projects that will further integrate the city into the Guangdong-Hong Kong-Macau Greater Bay Area development.

Hong Kong’s most notable real estate agents under 40

In 2022, Hong Kong has slowly regained its attractiveness as a property investment destination, and amongst to thank are the city’s realtors who were determined to end the city’s downcycle. In recognition of their hard work, Hong Kong Business listed 17 realtors under 40 who not only thrived in managing clients and negotiating deals but also displayed leadership in their respective communities amidst challenging times.

How else can Hong Kong’s startup ecosystem improve

Even with an already vibrant and healthy startup ecosystem in Hong Kong—housing 3,750 startups, of which, 18 are unicorns—the industry is not without challenges. Microsoft Hong Kong pin-pointed three pain points for these newly formed local businesses. According to Kelvin Tse, Director for Global Partner Solutions at Microsoft Hong Kong, startups are challenged by the lack of technological stacks to support and build their businesses; a marketing strategy that will introduce them to their target customers and promote their products; and escalation for them to expand their reach internationally.

Office market to recover despite high vacancy rates

Hong Kong’s office property market is in a state of recovery although vacancy is still high as corporate downsizing continues. Because of this, overall net absorption remains in the negatives. According to JLL’s Hong Kong Property Market Monitor, the overall net absorption in July was -89,000 square feet. Compared to figures last year, gross leasing volume has improved as tenants resumed making real estate decisions after postponing them last year due to the pandemic.

Hong Kong lenders gear up sustainability initiatives as post-pandemic era dawns

More than a year after the pandemic first began, its effect on Hong Kong banks’ headcounts has finally been reflected in its 2021 bank rankings, with over 2,100 workers in the industry displaced. But whilst the crisis is finally winding down as vaccines are rolled out across the city, banks—both local and foreign—face a new type of challenge: navigating the growing preference for sustainability, whose importance has been further highlighted in the past year as COVID-19 raged worldwide.

Marketing Briefing: ‘Go-local’ trend rises as pandemic drags on

With the prolonged mobility restrictions due to the pandemic, consumers in Hong Kong are opting to buy local products or travel domestically, according to PwC’s latest Global Consumer Insights Pulse Survey. An average of 51% of consumers globally—41% in Hong Kong—in the survey were actively more supporting local independent businesses and were buying from local independent retailers in the past six months, according to the June survey.

Green finance in APAC to grow amidst data and disclosure gaps

Green finance is proving to be a rapidly growing sector in 2021. Based on data from the Climate Bonds Initiative (CBI), 2021 green bond issuances might exceed that of last year, with $219.7b issued for the first half of 2021 compared to the US$290.1b issued in 2020. Bonds issued from the Asia-Pacific made up more than a quarter of the first half’s figures, at US$51.9b, just a few millions short from the US$53.2b issued for the entire year of 2020.

Should Hong Kong’s brickand-mortar retailers ride the e-commerce wave?

Online sales accounted for 6.3% of total retail sales in 2020, according to PwC, which saw a “very modest” increase to 7.4% as of September 2021. Analysing this, a PwC executive said that Hong Kong retailers may have fallen short. “If you look at the actual amount of online sales, we’re talking about only 7% of retail sales overall. Hong Kong retailers are still not doing that much of moving their business models into online-tooffline (O2O),” Michael Cheng, Asia Pacific, Mainland China and Hong Kong Consumer Markets Leader for PwC, told Hong Kong Business.

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Competing for the best talent in Hong Kong’s shrinking talent pool

Companies racing to fill roles— this has been the state of Hong Kong’s job market as its talent pool continues to shrink year by year. In 2022, the struggle to reel in employees remains to be felt by 85% of companies, according to the Digital Salary Survey 2022 by Robert Walters and Walter People. The shrinking talent pool, however, can be broadened, and employers can even net the best in the workforce if they dive into different strategies, according to analysts.

Rent control bill aims to bury abusive ‘coffin home’ landlords

It has been over two decades since rent controls have been implemented in Hong Kong, a city that has usually been laissez-faire with price controls; which is why for low-income families dwelling in subdivided units (SDUs) who have been grappling with high rents, plans under the Landlord and Tenant (Consolidation) (Amendment) Ordinance 2021 to prohibit any increase in the rent for the first term of tenancy, which is equivalent to two years, should be welcomed. On renewal, which is another two years, landlords of the socalled “cage houses” or “coffin homes” may only increase rent up to a 10% cap, but they may be restricted to an even lower rent rise.

Time for a comeback? Hong Kong’s top 50 insurers show a 9.75% surge in assets

With the skies clearing, Hong Kong consumers will still prioritise making sure they have an umbrella handy, a fact that Hong Kong insurers took note of as they ready health and wellness products for 2022. Hong Kong Business 2022 Insurance Rankings has revealed that the industry’s top 50 insurers total assets surged by 9.75% to HK$709b in 2020 from HK$646b. AIA International continued to retain its number one spot in the rankings despite its total assets declining to HK$126b in 2020 from HK$141b in 2019. This was also the case for Prudential (HK) Life. With its total assets dropping from HK$111b to HK$92b, it still managed to retain the second spot in 2021’s rankings.

Prepare to go cashless or pay the price

With more consumers planning to drop cash and go fully digital with their payments in 2022 and in years to come, and with one in three abandoning a purchase when not given a digital payment option, small businesses really have no other way to go than shift to cashless. Fortunately, a majority (95%) of small and medium enterprises (SMEs) are planning to accept contactless payment or some form of digital payment option in 2022, according to Visa.

One chat away: Conversational commerce levels the playing field for brands online

Fiona Thia, business development director at TMX, was looking for a ring online. She can only roughly estimate her ring size based on the chart posted on the store’s website. Already expecting her order to be hit-or-miss, she then received a message from the brand asking for a photo of her finger to help settle the size and assuring her that, if the item did not fit, she can have it exchanged with no additional payment. Thia also received a follow-up message to check on the item delivered.

A new canvas: Why artists are jumping into the NFT space

Artist Lakshmi Mohanbabu would usually get a one-time earning for a piece of art she sells in a gallery. When she took a dive into the non-fungible token (NFT) space, she realised that she can make much more. In an interview with Hong Kong Business, Mohanbabu said artists can get a percentage of a future resale of their NFT-minted artworks because they are able to impose a royalty fee. “In traditional galleries, when my art is sold to a client and I make a hundred dollars, then that’s it. If that client resells my artwork for a million dollars, it will no longer benefit me as the artist,” Mohanbabu said.

HK aims to regain crown as favoured arbitration hub with ORFS bill

Currently, lawyers handling arbitration cases in Hong Kong usually get paid by the hour under standard fees arrangements. But with the Law Reform Committee’s (LRC) push to finally allow legal practitioners to enter into outcome-related fee structures (ORFS), lawyers can structure a fee arrangement that suits the specific client and the specific case.

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Here are five bad habits in insurance according to HK’s insurance regulator

For a market ranking first globally in insurance penetration according to research firm Swiss Re Institute, it is surprising that Hong Kong’s insurance literacy rate stood only at 52%. In the 2022 Report on Insurance Literacy Tracking Survey (ILTS) in Hong Kong 2021 by the Insurance Authority (IA), it was found that most, Hong Kongers are moderately literate when it comes to insurance.

Why tax deduction on domestic rents is not a win for tenants

When the legislation allowing tax deduction on domestic rents was passed by the Legislative Council, it was called an “ease to the burden” of taxpayers who are renting; however, a law expert argues that the bill is not necessarily a win for tenants. “Whilst it might look like tenants will be the real winners here, the reality is that only a small proportion will reap the full benefit,” Janice Yau Garton, partner at Stephenson Harwood, told Hong Kong Business. According to Garton, many taxpayers will still not be able to fully claim their actual cost of rent given the deduction ceiling of $100,000 for each year of assessment.

No spacious homes for Hong Kong’s poor anytime soon

Hong Kong’s poorest families hoping to live in more spacious houses can bid their dreams goodbye because the per capita living space issue in the city will not be resolved anytime soon, especially after the average waiting time for public housing was extended to a record-breaking 6.1 years by end of March. Waiting time is defined by the Housing Authority as the “time taken between registration for PRH and first flat offer, excluding any frozen period during the application period.” The 6.1 years was the longest average waiting time in 23 years, according to JLL. By June, however, waiting time was slightly reduced by 0.1 to 6 years.

How key aviation players are pushing the industry for takeoff

Whilst reports say that Hong Kong has lost its aviation hub status, key players in the city remained confident in the future of the industry. What gave Cathay Pacific, Hong Kong’s flag carrier, “great confidence for the long-term future” of the industry is the HKSAR government’s removal of the hotel quarantine arrangement for locally based aircrew and travellers. “These adjustments will help boost sentiment for travel, thereby facilitating the gradual resumption of travel activities and strengthening of network connectivity to, from, and through the Hong Kong aviation hub,” the airlines said.

Why will Mainland’s border reopening be crucial for the luxury market in 2023

Buyers from the Mainland have been dubbed as the “major purchasing power” supporting Hong Kong’s luxury market, which is why a possible reopening of borders between the two locations bears good news for the property segment. Jordan Miller, Managing Director of real estate agency OKAY.com, told Hong Kong Business that a free flow of travel or movement between Hong Kong and China will “create a strong catalyst for buyer interest from China to resume to pre-COVID levels, which in turn may result in higher sales interest, demand, sales volume, and price appreciation.”

How can a metaverse gaming platform drive foot traffic to businesses in the real world

Remember the phenomenon that was Pokemon Go, and how it boosted foot traffic in malls all around the world? This was what AiR World Founder Gabriel Kwong has been doing for local businesses in Hong Kong, but he did it by incorporating the latest talk of the town—metaverse. Kwong and his team created a metaverse-to-go gaming platform where real-life, physical locations act as a gateway to another dimension of AiR’s virtual world.

Why is Hong Kong robust in the energy war?

Unlike the rest of the world, Hong Kong has a more secure and diverse energy supply, making it resilient to brownout threats and reducing exposure to the highest energy costs seen in many countries at this time. For example, the nuclear electricity supply from Daya Bay Nuclear Power Station is extended up until 2034. This can help Hong Kong keep up with the energy crisis, Mike Thomas, a founding partner at energy consultancy firm, The Lantau Group, told Hong Kong Business.

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How financial institutions can overcome the towering demand for ESG roles

Hong Kong’s finance sector has never been truly invested in the environmental, social, and governance (ESG) piece, according to HR expert Steve Parkes. “Strong ESG people” across the globe who could have been considered to fill the roles are already less interested in Hong Kong for reasons like politics and the city’s pandemic response.

How companies can successfully transition to hybrid work in just 2 steps

There are several suggestions on the internet on how organisations can transition to a hybrid work setup. Some say it takes a sevenstep plan, whilst others say there are about 10 ways to ensure that the shift runs smoothly; but according to an expert at tech company Cisco, companies only need to focus on two things to achieve the new work model. In an interview with Hong Kong Business, Wilson Ching, general manager of Hong Kong and Macau at Cisco, said adoption of a hybrid work model begins with a culture change.

What the future looks like for brick-and-mortar retail in HK

Just as businesses were forced to speed up their digital transformations during the pandemic, many consumers had to make the switch from traditional shopping in physical stores to online. The retail sector was amongst the industries hit hardest by the pandemic; and out of this disruption, changes in consumption behaviours have emerged – some of which may be here for the long haul. Online consumers in Hong Kong are on the rise, with a

Decline in expats drags luxury residential market

The luxury residential rental market saw a huge decline in the last three months of 2020 as border closures became a hindrance for potential buyers, as well as capital inflow. However, the second quarter (Q2) of 2021 saw the end of eight consecutive quarters of decline as luxury residential rents recorded an increase of 1.4%, which analysts say is a sign of rents bottoming out for the first half.

Israel and Hong Kong forge fertile business bonds

Hong Kong is soon to be a safer place for health workers due to closed system transfer devices that minimise their exposure to hazardous drugs when administering medication. This technology was developed by Simplivia, one of the many Israeli companies that have seen the advantage of doing business with Hong Kong.

What are 6 financial services trends that will emerge in the GBA in the next 5 years?

Accounting and finance professionals in Hong Kong believe there will be six trends that will influence investments in the Guangdong-Hong KongMacao Greater Bay Area (GBA) in the next five years. The first of which is a growth in corporate investment, which 68% of professionals predict will happen. Another trend that will emerge will be corporates and investors participating in green finance and carbon trading. According to CPA Australia, 48% of experts said their company will participate in such practice in the next five years.

Achieving board diversity: It takes more than giving additional seats to women

Contrary to what most headlines say, achieving board diversity is not a numbers game of how many seats should be given to women or the young, but rather a fight to eliminate a “groupthink” mindset or thinking and perceiving things the same way amongst executives. gigantic rise in the number of shoppers using online purchasing services in 2020. The Census and Statistics Department reported that the percentage of consumers aged 15 and above, who made at least one online purchase last year rose to 43.1%, up from 35.8% in 2018.

6 in 10 customers want restaurants to use sustainable packaging for takeaway food

Over half of customers (66%) want restaurants to adopt sustainable packaging, Deliveroo has found. A similar number of customers (61%) also said the availability of sustainable packaging would be one of their key considerations when ordering food delivery services. Amongst age groups, Gen X consumers (aged 46-55) were most supportive of sustainable packaging, with 69% saying sustainable packaging is a key consideration of takeaway orders, followed by Gen Z (aged 18-25) (57%). Deliveroo also found that consumers tend to order from restaurants using sustainable packaging (62%) and are even willing to pay more for sustainable packaging when ordering takeaways (66%).