The festival was officiated by (from left) AUSupreme International Holdings founder Leslie Choy, HKTDC assistant executive director Stephen Liang, celebrity Kenneth Ma and Taikoo Sugar general manager Melody Keung. - HONG KONG TRADE DEVELOPMENT COUNCIL
HONG KONG: Hong Kong will in August hold its first shopping festival on online platforms such as Taobao and Xiaohongshu to help its local businesses make inroads into mainland China.
This comes as Chinese consumers have been increasingly tightening their belts amid an economic slowdown and snubbing their own mainland-organised online shopping campaigns.
The Hong Kong Shopping Festival, to be held from Aug 1 to 31, will promote the products of more than 230 Hong Kong brands through major Chinese platforms, which also include JD.com, Pinduoduo and Douyin.
Participating brands include big names such as jeweller Chow Tai Fook, beauty retailer Sasa and sauce manufacturer Lee Kum Kee, as well as smaller enterprises such as pastry maker Kee Wah Bakery and health supplements firm Catalo.
The campaign seeks to help Hong Kong firms break into the vast mainland market and equip them to conduct their business there, according to the festival’s organiser, the Hong Kong Trade Development Council (HKTDC).
“Diverse online channels such as live streaming, instant retail and social commerce have become the new normal for many mainland consumers,” HKTDC assistant executive director Stephen Liang told reporters at the launch of the festival on July 25.
“But many Hong Kong SMEs (small and medium-sized enterprises) are unfamiliar with the business culture and marketing channels in the mainland domestic market... which has become a major pain point for them. (The festival) will help local SMEs gain practical experience and prepare them for expanding their mainland e-commerce operations.”
China’s online shopping festivals typically offer major price cuts on big-brand items, limited-time discounts and generous return policies, and rope in celebrities to tout the products.
The Hong Kong campaign, too, is set to offer big discounts from the participating local brands, although HKTDC did not specify how significant the price cuts would be.
It will tap about 20 top mainland influencers – including “Lipstick King” Li Jiaqi – to live-stream the sales on their platforms and nudge viewers into making instant purchases online.
Hong Kong actor Kenneth Ma, who recently starred in TVB drama Queen Of News, which was widely popular on the mainland, is also helping to promote the event.
The campaign is aimed at tapping Chinese consumers’ spending power by taking Hong Kong products directly to the mainland market amid the city’s continually falling retail sales.
Financial Secretary Paul Chan said: “The brand of ‘Hong Kong’ has always been renowned for its high quality... this festival could help different Hong Kong products tap the mainland market more extensively and make Hong Kong brands shine.”
Retail sales in Hong Kong fell by 11.5 per cent to HK$30.5 billion (S$5.3 billion) in May compared with a year ago, data released in July showed. It was the third straight monthly decline, after a 14.7 per cent drop in April, and a 7 per cent decrease in March.
The poor sales performance has left many bricks-and-mortar store operators drowning, and driven retail trade associations to plead with malls and landlords for significant rental cuts.
In a blog post on July 21, Chan noted that online sales made up only 8 per cent of Hong Kong’s total retail sales in 2023, while the proportion on the mainland was 28 per cent.
This suggested significant room for growth in the city’s e-commerce market, the finance chief wrote.
He added that the government had set aside a HK$1 million subsidy for small local firms to develop their presence in the mainland’s online market, and also HK$500 million for a “digital transformation scheme” to help SMEs adopt e-payment, customer management and promotion systems online.
In mainland China, online sales rose by 11 per cent to 15.4 trillion yuan (S$2.8 trillion) in 2023 compared with in 2022, official data showed.
But economic sentiment there has been weakening.
In 2023, for the third consecutive year, Alibaba and JD.com, which own China’s two biggest e-commerce platforms, kept mum on the total value of goods sold during their mega online shopping festival, despite having previously released such data.
In June, mainland retail sales rose by only 2 per cent – the weakest growth in 18 months – compared with a year earlier.
Luxury brands, in particular, have been suffering. Chow Tai Fook’s mainland sales dropped by 19 per cent in the second quarter of 2024.
Leslie Choy, founder and chief executive of Hong Kong-listed health supplement firm AUSupreme, is upbeat about his firm’s participation in the shopping festival, although he has not set any concrete target for the business he expects it to bring in.
“I believe the festival will definitely help improve the brand awareness and sales of our products on the mainland much more than our individual efforts did in the past,” he said.
“People may already be aware of our products, but faced with the countless other competitor goods in the market, consumers often need an extra push to seal the deal... With the concerted promotional efforts and government support this time helping to convey confidence in the quality of our offerings, this festival could do just that.”
Gary Ng, a senior economist at investment banking firm Natixis, said that while he found the campaign “constructive in marketing Hong Kong brands, it is not a game changer”.
“Chinese consumers increasingly rely on online sales, which means that building such e-commerce connections is important for future growth,” Ng said.
“But online sales also make price comparisons easier and competition can be fiercer. Given China’s current weak economic sentiment, it will be challenging to get money out of consumers’ pockets unless there is a huge discount.” - The Straits Times/ANN
