Cover Story

Across the Greater Bay Area

The hub for new opportunities

“In the recent years, the re-innovation of the Pearl River Delta and the introduction of the single economic entity embodied in the GBA initiative has contributed to the modernization of the Chinese economy and to enhancement of its competitive position in the world”

Currently housing about 70 million people, producing about 37% of the Chinese imports and 12% of the country’s GDP, the GBA should become –according to the plans of the government– by 2035 a technology district comparable to the American Silicon Valley.

In the recent years, the re-innovation of the Pearl River Delta (e.g., the area including Hong Kong, Macao, and the nine cities of the Guangdong province) and the introduction of the single economic entity embodied in the GBA initiative has contributed to the modernization of the Chinese economy and to enhancement of its competitive position in the world. Furthermore, the implementation of the considered project has transformed the GuangdongHong Kong-Macao Region into a technology and innovation hub, capable of catalyzing and interconnecting the numerous profitable occasions for businesses, entrepreneurs, and stakeholders, be them local or international. Still, despite its wide-ranging mixture of opportunities, the GBA is inevitably forced to face a series of challenges and problems – from the regional administrative barriers within the region to the backwardness of the technologies in the field of chips and semiconductors.

How will the GBA furtherly develop into an international economic hub for finance,

trade, and technology? Will the different centers which compose the Region evolve through a coordinated pace? What new opportunities will the GBA represent for international economic relations and, in particular, for Italy? How will the Area overcome the problems implicit in such an ambitious program?

To answer these and other questions about the GBA and the role of Hong Kong in said project, the Italian Chamber of Commerce in Hong Kong and Macao is pleased to present the 11th volume of the ItalianCham Magazine. Mainly focused on the economic future of the Guangdong-Hong Kong-Macao Region, the latest issue of the magazine covers the most recent themes related to the GBA and the Hong Kong market, with a specific emphasis on the Start-up Ecosystem which has been recently proliferating in the aforesaid city.

Shipping Made it Easy

Easyship is a leading shipping platform for eCommerce and crowdfunding. Merchants have access to over 250 shipping solutions with leading couriers like USPS, UPS, FedEx, DHL or they have the option to link to their own courier accounts. With dynamic rates and transparent tax and duty charges at checkout, merchants can increase their conversions and grow their business, while managing their entire shipping workflow from one easy dashboard. For growing merchants, Easyship offers a partner warehouse network across the globe that can help them save time and money with shipping and fulfillment. With Easyship, merchants can save them up to 70% on shipping and expand their businesses internationally all from one platform.

With a plethora of shipping solutions, choosing the best shipping company for small business is challenging. To get the most from your business, here 5 things small businesses should consider before shipping their products.

“We help to scale operations to provide customers with a holistic experience”

By Jules, Easyship

Order Volume

The number of orders monthly sent out plays a significant role in finding the best solution. Your business could benefit from small business shipping services solutions, such as packaging and delivery discounts from couriers and third-party order fulfillment providers. Moreover, working with a partner like Easyship can help scale eCommerce order fulfillment seamlessly.

Packaging

Choosing the packaging provides an opportunity to protect your goods, while advertising your brand. Evaluate the level of protection needed by your products and consider the cost of packaging materials: couriers may offer flat rates depending on the typology of material used. Package Dimensions and Weight Since heavier packages cost more to ship, the package dimension significantly determines the shipping cost and its impact on the budget. Consider the dimensional weight (DIM) of the goods, indicating the package dimensions: since large boxes have large DIM and lead to high costs, go for small boxes if possible.

Tracking

Transparency is paramount to building long-lasting customer relationships. Therefore, every business should share a clear shipping policy and feature tracking protocols. Communicate with customers by sending frequent update emails which lead to a tracking page.

Insurance

The stance on insurance should be explicit in the shipping policy, which should indicate costs and amounts covered and address what might happen if items are lost or damaged. Conventionally, couriers cover all shipments worth up to $100, while insurances for goods worth more than $100 must be purchased separately.

Delivery Times

Let customers know how long it will take for products to be shipped. Don’t leave them in the dark! When providing estimated delivery dates, add extra days on for wiggle room: the best experience is when packages arrive on time – even better is when it’s early.

Destination

International shipping impacts the timing of delivery: since customers expect quick and affordable deliveries, it is essential to provide the correct balance of cost and time. Reduce costs while increasing the delivery speed by decreasing the shipping regions.

GOGOX: Hong Kong’s first unicorn startup

Founded in 2013, GOGOX is the first app-based logistics platform in Asia committed to providing extensive logistics services through innovative technology. Formerly known as GOGOVAN, the company has a competitive and diverse business portfolio, from van-hailing and instant delivery to customised logistics solutions. GOGOX instantly connects individuals and businesses with millions of logistics partners to fulfil all sorts of delivery needs, redefining the delivery experience by providing speedy, agile and convenient logistics services that are unmatched. Over the years, GOGOX has expanded its businesses from Hong Kong to Singapore, Taiwan, South Korea, India, Vietnam and Mainland China, with presence in over 300 cities and more than 8 million registered drivers under its network.

“Keep trying everything you want to do as we always have to try in error. Many people were saying that my ideas would not work when I was still mapping my journey. Always trust yourself until you truly succeed.”

Interview with Reeve Kwan, co-founder of GOGOX

It was the global financial crisis when Reeve and other co-founders graduated from University of California. It apparently was not the perfect condition of the job market. And that was the time they decided to return to Hong Kong and started their own business.

The idea of GOGOX began with the project about lunchbox deliveries. The co-founders managed the business through call-centres until one morning they had thousands of orders to fulfill amongst themselves. This significant event inspired them to think of an effective way to solve the pain point of the fragmented and inefficient call-centre business model. They created a platform that instantly connects van drivers and users: that’s how they invented GOGOX.

Were there any difficulties when you started your first business?

“Scaling up the company is often the most challenging thing for a startup, as you are often driven by the willingness of doing more and more especially when you have new ideas, but the reality is that there are only limited resources”, said Reeve. For instance, initially we always need to think about how to find more resources and how to define the priority of the things we need to do first for the start-up. In particular, the most challenging thing is that when we try to catch the opportunity, most of the time we can only do a few things.

Moreover, Reeve also mentioned the difficulty in managing people: “It might be easier to communicate and work with team members within the size of 30 people. But when the business grows rapidly and the environment is changing quickly, the communication flow becomes complicated.”

How do you develop and expand GOGOX business to different markets?

The difficulty of expanding the business in other countries is about adopting the local policies as every country and region has its own specific business law and culture. When GOGOX started its first oversea business in Singapore, they learned that the business model they used in Hong Kong did not work there.

This made them aware of the fact that they could not just copy and paste the same method in other countries. Therefore, as every country and region has different policies, they need to measure risks and do field trips before renewing the app in new countries.

When GOGOX was launched in Taiwan and South Korea, they created a simpler and convenient way for local people to use their logistics platform. “The majority of delivery services in Asia regions are using motorcycles but not vans and around 80% - 90% of the motorcycle has been used for the delivery services,” said Reeve.

Could you introduce other businesses under GOGOX group?

To create an extraordinary logistics experience for the industry, GOGOX has introduced other services to the group: GOGOBusiness and GOGODelivery. • GOGOBusiness: to resolve logistics concerns for SMEs and enterprises by customized solutions • GOGODelivery: to provide an instant and same-day door-to-door delivery service for smaller items by courier

What would you suggest to the young entrepreneurs?

Reeve says: “Keep trying everything you want to do as we always have to try in error. Many people were saying that my ideas would not work when I was still mapping my journey. Always trust yourself until you truly succeed.”

Save Food, Save the Planet, Save your Wallet

Have you ever thought of what we could do to alleviate the problem of food waste in Hong Kong? Given the significant magnitude that this phenomenon has acquired in the region, we met Phenix, an anti-food waste App based in Hong Kong and talked with one of its Co Founder Diego Dultzin Lacoste, Co-founder & CFO at OnTheList, and discussed with him the launch of this innovative start-up.

“Maybe it will be hard for us to build a world without waste, but we could try to develop a greener environment by changing our living habits”

By Anne-Claire Beraud, Business Development Manager, Phenix by OnTheList

Every day, the city of Hong Kong sends up to 3,600 tonnes of food waste to landfills, with one third of the world’s food being wasted. If this can be rescued and turned into opportunities, it would not only be beneficial to the environment, but also to food retailers, customers and the society as a whole. Such a win-win-win situation is the fundamental concept of Phenix by OnTheList.

Born in Hong Kong, Phenix is an anti-food waste App intended to help merchants turn their surplus food into new opportunities. The App provides customers easy access to perfectly good food which would otherwise be discarded: picked-up from restaurants, bakeries, supermarkets, and cake-shops, the products are offered at a discounted price.

Products which might lose their commercial values but remain good are available for sale on the App, meaning that partners have the chance to generate additional profits from the originally lost costs while the customers can enjoy delicious discount offers (from 50 to 80% off) on food items. Launched in February, Phenix by OnTheList has already garnered the support of several partners, including The Cakery, CaliMex, Pirata Group, Bain Marie, Oolaa, and even City Super will join at the end of the month and Park N Shop is interested in the concept. The partners range from restaurants providing Italian and French cuisines, to bakeries and food distributors.

The project is a joint venture between Phenix and OnTheList that since 2015, has saved more than 2M items by helping brands sell their past season items using a members-only flash sales concept. On the other hand, Phenix is an environmental social enterprise based in France with footprints in 5 countries in Europe, saving 120,000 meals per day.

With both companies being experienced in turning waste into new possibilities, the combination of Phenix’s anti-food waste technology and OnTheList’s qualified member base of 371,000 consumers has created a strong collaboration, which has an important role in advocating sustainability in Hong Kong and contributing to the achievement of the objective of zero food waste.

Maybe it will be hard for us to build a world without waste, but we could try to develop a greener environment by changing our living habits and significantly decrease waste. This App, for its part, is putting a remarkable step in raising people’s awareness of the importance of green habits and in promoting the less-wasted lifestyle in Hong Kong.

As previously said, Phenix provides numerous user-friendly functions to the user, which could purchase unsold products with a lower price and, thus, could help the offline shops to not produce any food waste. Know more about the Phenix App and furtherly understand how they are trying to reach the mission : creating a world without waste!

After talking with Diego Dultzin Lacoste, here is the advice we would offer to all the entrepreneurs – Should not wait to make your project perfect: test it, listen to your stakeholders, and improve on a daily basis!

Health, indulgence and consumption sophistication shaping new-style tea drinks in the GBA

“While most Guangdong cities within GBA, such as Shenzhen, align with the rest of mainland China in bubble tea consumption, Hong Kong as ‘Gourmet Paradise’ exhibits a different pattern, as it embraces the diversity of trends, where international players have a strong presence”

By Peter Wong, Senior Analyst, Euromonitor International

In recent years, a new-style drink brewed from high-quality tea leaves mixed with ingredients and toppings, such as fruit and whipped cheese is popular among people. According to Euromonitor International, share held by chained coffee and tea shops, as a percentage to total cafes and bars in Asia Pacific, grew from 13% in 2015 to 24% in 2020 and is expected to stay at 23% by 2025.

Mainland China: Premiumisation for health and consumption sophistication

In mainland China, new-style tea drinks are driven by the pursuit of health and a more sophisticated taste. There were many street shops selling traditional bubble tea, and consumers were happy with these offerings as it was a novelty. Overall, demand for bubble tea was rising, and shops, such as CoCo and Mixuebingcheng, tended to focus on medium- and low-income consumers.

Since the taste and demand among Chinese consumers are elevated, HeyTea and Nayuki have energized demand via a complex taste but also an element of health and wellness. Likewise, their Starbucks-like stores present a comfortable place for customers that they are still willing to pay a premium for. This makes the bubble tea consumption toward greater sophistication and trading up from street stalls to salubrious cafés. According to Euromonitor International , the compound annual growth rate of sales for HeyTea and Nayuki in China were 48% and 150%, respectively from 2016-2020.

Hong Kong: Mixed influences with diverse needs

While most Guangdong cities within GBA, such as Shenzhen, align with the rest of mainland China in bubble tea consumption, Hong Kong as ‘Gourmet Paradise’ exhibits a different pattern, as it embraces the diversity of trends, where international players have a strong presence. Consequently, consumers are often very sophisticated and discerning about the food and drinks they consume.

There are numerous brands focusing on a wide variety of bubble tea. Taiwanese brands like Gong Cha and Sharetea, specialize in traditional bubble tea like boba milk tea. Fruit tea brands like Yifang Taiwan also started gaining traction among people. Besides, local companies are also emerging, for instance, Cha Long (‘Tea Wolves’ in Cantonese) has expanded rapidly in 2018. Not only has Cha Long placed a strong emphasis on its high-quality drinks, but also on its in-store environment, which launched its first ‘Cha Lounge’ offering a spacious ambiance with wolf-themed decoration.

Entrance of HeyTea and Nayuki to Hong Kong with their signature drinks further diversified bubble tea offerings, consumers are able to choose specific drinks they want based on their usage occasions.

Looking forward

Undoubtedly, new-style tea drinks have the rising trends in Asia Pacific. According to Euromonitor International, chained coffee and tea shops are amongst the best performers in all chained cafes and bars, with a 10% compound annual growth rate predicted between 2020-2025. It will be vital for players to precisely understand the dynamic between health, indulgence and consumption sophistication in each market in order to win in the bubble tea industry.