Tag Archives: Hong Kong

Hong Kong: Gateway to Asia

By Michael Battista
Industry Coordinator to the Global Fashion Management Program

Unloaded container ships in Victoria Harbour, as viewed from Kowloon, Hong Kong.

Hong Kong is a city that bustles with over 7 million people. Skyscrapers that are achieved with bamboo scaffolding rise from the mountainous terrain of a bay overlooking the South China Sea. Container ships filled with goods destined for the world’s ports dot the horizon. This sets the scene for the third and final seminar of the Global Fashion Management program, held in collaboration with the Institute of Textiles and Clothing of the Hong Kong Polytechnic University.

Hong Kong is a hub for retail: filled with boutiques, shopping malls, and specialized districts. Street markets with literal names like “Jade Market” and “Sneaker Street” are destinations in and of themselves. It’s a place where luxury brands have – until recently – enjoyed great success. There are more Louis Vuitton and Prada stores in Hong Kong than in Paris and Milan. When immersed in the modernity of this city, it’s hard to imagine its humble beginnings as a small fishing village.

Hong Kong is filled with luxury shopping opportunities. Pictured above, in the Kowloon district,  is one of eight Louis Vuitton stores in Hong Kong. There are more LV stores in Hong Kong than in Paris.
Tai O, a traditional fishing village of stilted huts on the outskirts of Hong Kong, stems the tide of modernization and offers a glimpse into the city’s humble beginnings.

The seminar began with the positioning of Hong Kong as a gateway to Asia. According to visiting lecturer Pauline Hsia, American, European, and British brands come to Hong Kong to test their success with the Asian market before expanding further into the continent. Dana Craig, SVP of Supply Chain – Asia at Tory Burch informed us that the brand’s highest volume of sales, worldwide is at their Hong Kong airport location. Notwithstanding this success, Mr. Craig points out that building brand awareness remains a challenge to expansion in Asia.

While success can prove elusive to foreign brands, a strategy of testing and brand building is exhibited in the efforts of Canadian brand Lululemon. The Business of Fashion reports: “The company has stores in Hong Kong but currently only operates showrooms in Shanghai and Beijing, and sells online in China via Tmall [an e-commerce platform]. ‘We start with our showroom model, where our team can build brand awareness, test product, create authentic relationships and learn what is important to a community before we open a permanent store,’ says [SVP, Asia Pacific at Lululemon,] Ken Lee.”

A Lululemon fitness event in Beijing, as reported by the Business of Fashion on 10/10/2016.

The region now known as Hong Kong has been the gateway to China for centuries. The Portuguese maintained trading outposts there in the 1500s; and the Dutch and French would follow suit. By the early 1800’s, the British East India Company had a growing presence to feed Europe’s appetite for Chinese silk, porcelain, and tea. By 1839 it would become the epicenter of the Opium Wars – a humiliating history for both the victor and defeated – spanning two decades and ending with the cessation of Hong Kong to the British Crown.

A painting of a battle: one of many, collectively referred to as “the Opium Wars.” Oil on canvas, circa 1843: “Nemesis Destroying the Chinese War Junks in Anson’s Bay, Jan 7th 1841” by Edward Duncan.

Though the sovereignty of Hong Kong has since returned to China, it continues its tradition as the commercial gateway to the world’s most populous country. The opportunity for growth in connecting the East and West is not one-sided. While western brands have their sights on expansion into Asia, Chinese brands also seek expansion beyond the Great Wall. This seminar’s case study brand, Hidy NG, sought a complete brand audit, and a defined strategy for growth and westward expansion. Students worked in teams to articulate a brand identity, craft a distribution plan, and develop product lifecycle recommendations. The culminating presentations demonstrated rigor, analysis, and professionalism comparable to a boutique consultancy.

Hidy NG (bottom, left), Creative Director of the namesake brand, debriefs student on their assignment for the case study at the brand’s showroom inside of their manufacturing facility in Hong Kong.

By the time the students travel to Hong Kong, they are nearing the completion of the program. They have spent the last year-and-a-half cultivating business acumen through the curriculum; and have expanded their world view through their work with diverse colleagues from around the globe. As a result, they’re able to offer insights with clarity, precision, and confidence. So when the students presented their recommendations for the case study brand, Hidy NG was listening.

Students work in multicultural teams across three continents to prepare for and present their recommendations for the Hong Kong Seminar case study brand. Hidy NG (bottom, right) responds to each presentation.

 


 

Hong Kong Seminar 2015: The Connected Chinese Consumer

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Global Fashion Management Students at a lecture on campus at the Hong Kong Polytechnic University during a 10-day intensive seminar.

Within all aspects of Global Fashion Management education—from lecture event to panel discussion to informal conversation—the focus often turns to the demand and purchasing power of the Chinese consumer. According to the Sourcing Journal, China-based consumers’ online spending for American brands in 2015, is seven times higher than in 2014. But while Chinese consumers are aware of American brands, they’re often not available in China. Jingming Li, U.S. President of Alipay, China’s third-party payment platform, writes that growth will be exponential as logistics and localized payment options improve for cross-border purchasing.

Our intensive seminar in Hong Kong provides GFM students the perfect venue to hear the very latest on e-commerce, digital commerce, and social networks from those who know it best—local experts, colleagues, and consumers—and to gain insight on how the future might unfold.

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Anson Bailey, Principal, Business Development for KPMG in Hong Kong during a lecture to GFM students at Hong Kong Polytechnic University.

Anson Bailey, Principal, Business Development for KPMG in Hong Kong, has spent a good portion of his career in China, and has the consumer-technology expertise to deliver a fresh perspective on the contemporary Chinese consumer. Anson says, “Asia will be the story going forward,” and he backs up this claim with a few trends:

  • Peer to peer, mobile and cognitive technologies will continue to strengthen, especially as new digital consumers in third and fourth tier cities in Mainland China turn to e-commerce.
  • Among consumers in first and second tier cities, 2008 marked a turning point when buying incentive shifted from status seeking to self-reward and purchasing from a more individualist incentive. Heightened by an educated knowledge of country-of-origin when buying luxury, Chinese consumers have less concern for price, and focus more on accessibility.
  • Among Chinese consumers surveyed by KPMG, 45% buy online. Among the 54% that make up the middle to upper class, this group has the greatest influence on consumer purchases.

Anson went on to describe the evolving innovation of Chinese tech companies in creating disruptive technologies, consumer convergence, more adaptable mobile devices (such as OnePlus), and aggressive accelerator programs such as AIA. Regardless of how much we may read about the connected Chinese consumer, there’s nothing quite like being on site, and among the experts, to get a first-hand perspective.

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OnePlus,  a Chinese smartphone company based in Shenzhen with a rapidly growing customer base.
AIA Accelrator
Healthcare startup accelerator AIA Demo Day 2015