FIRST Hong Kong’s food services industry is predicted to grow at a robust 5.5% for the next three years
Digital trends have dominated almost every business in Hong Kong
How does the digital ecosystem transform HK’s industries?
H
ong Kong businesses have been transforming to meet the changing preference of consumers who lead increasingly digital lifestyles. Invest Hong Kong (InvestHK) and PricewaterhouseCoopers (PwC), in their joint report titled “Explore Opportunities in Hong Kong’s Digital Ecosystem,” showed that digital trends have dominated almost every business. This digital emphasis, according to InvestHK’s Director-General of Investment Promotion Stephen Phillips, “permeates Hong Kong’s lifestyle cluster including vibrant areas like e-commerce, food services, and
creative industries.” As Hong Kong’s digital economy continues to improve, businesses are creating new ways to engage with customers online. Food industry In the food industry, for example, is the use of the Cloud Kitchen model. “Cloud Kitchens are an innovative option for restaurants or caterers to expand to new areas or test new menu concepts without large investments in physical retail locations and equipment,” the report explained. “With reduced operational costs, restaurants, in turn, are free to offer innovative new menus in strategic
neighbourhoods of Hong Kong whilst keeping risks at a minimum,” the report added. With new avenues for business offered by food and beverage operators and growth in online grocery shopping, Hong Kong’s food services industry is predicted to grow at a robust 5.5% for the next three years. Creative industries In the creative industries, PwC and InvestHK said there has been a creation of an online-first ecosystem as more consumers demand access to online contact. The rapid digital adoption amongst consumers has also forced businesses in the industry to reframe their business models. Advertisers, for example, are shifting to subscription-based models. The report also stated that by 2024, high-speed mobile internet penetration in Hong Kong will reach 87%, up from 85% in 2021. In the same year, the over-the-top video market will be able to bypass traditional TV revenues, the report stated. E-commerce Given that over 40% of HK’s population shops online weekly and 70% monthly, HK’s eCommerce is expected to nearly nearly double by 2025, with a projected market volume of $90.63b.
HONG KONG HAS THIRD-HIGHEST ADOPTION RATE OF NEOBANKS: EY SURVEY
H
ong Kong has the third-highest neobank adoption rate globally, with 14% of consumers saying they have a primary financial relationship (PFR) with neobanks, EY’s NextWave Global Consumer Banking Survey revealed. The city was just behind Mainland China (17%) and Germany (20%). The survey said the finding reflects how “non-traditional tech startups are gaining ground” in Hong Kong. From those surveyed, 47% also have products or services with a neobank, saying they perceive these technology brands to be more innovative and can offer better products and services. Meanwhile, 61% of those whose PFR is a traditional bank, said they have three or more relationships with other firms which offer financial services.
The study also found that Hong Kong consumers are “looking for seamless integration across multiple providers,” with 50% expressing interest in super apps that combine multiple financial services. David Scott, EY Banking and Capital Markets sector leader for Hong Kong, said the study’s findings show that “ incumbent banks need to transform their business models to meet the rising expectations of consumers and address the dynamic market landscape.” “The results of our survey confirm that seamless integration of activities, ecosystem business models and stronger personalisation capabilities are essential for Hong Kong banks to maintain their customer relationships and chart a viable path to growth,” Scott added.
Non-traditional tech startups are gaining ground in Hong Kong
HONG KONG BUSINESS | Q1 2022
7
