Around 50% exporters have gone online post COVID-19: Hong Kong Trade Development Council survey
Published 23 March 2021
In the aftermath of COVID-19, around 50 per cent of exporters have gone digital.
Nearly half of the exporters surveyed planned to develop other product categories (45.7%) or build up online sales channels (45.4%) in 2021, according to the survey conducted by Hong Kong Trade Development Council (HKTDC).
The HKTDC conducts the Export Index survey every quarter, interviewing 500 local exporters from six major industries including machinery, electronics, jewellery, watches and clocks, toys and clothing, to gauge business confidence in near-term export prospects. The Index indicates an optimistic or pessimistic outlook, with 50 as the dividing line.
Industries embracing digital
The most popular channels for those going online included proprietary websites/applications/social commerce (77.3%) and third-party e-commerce platforms (64.9%). Some respondents also indicated they used online sourcing platforms (36.1%) or online exhibitions (19.1%), the survey said.
However, many exporters encountered difficulties when developing online sales, including intense competition in the e-commerce market (56.7%) and ineffective digital market strategies (52.6%), while some were not ready to take small orders (37.6%) or establish long-term relationships with buyers on a virtual basis (32.0%). Other commonly identified issues included potential cybersecurity risks (26.3%) and the need to train e-commerce staff (25.3%).
HKTDC Director of Research Nicholas Kwan said that many companies now offer a basket of value-added services as a way to stay competitive in the market. The most common free service offered is product design and development (67.9%), followed by preparing trade documentation (56.6%), logistics arrangement (56.6%), facilitating the attainment of quality-certification or product-testing reports (56.6%), and managing production including outward processing and quality control (52.8%).
Biz rebound in major industries
HKTDC Economist Samantha Yim said export confidence improved across all major industries. The strongest rebound was in jewellery (42.2) and toys (44.7), which jumped 9.2 and 8.8 points respectively.
Among major markets, Hong Kong exporters were relatively more confident in the United States (46.1, up 1.7 points), while Mainland China (48.0) and Japan (47.3) were on par with the last quarter. The outlook for the Association of Southeast Asian Nations (45.2) and the European Union (42.9) was less promising, falling 2 and 1.1 points respectively.
“The improving export sentiment is further evident in an upward trend in the subsidiary indexes including the Trade Value Index [46.3, up 9.8 points] and Employment Index [43.2, up 1.7 points], yet the Procurement Index [33.6, down 1 point] remained subdued, suggesting exporters are worrying orders might drop in the near future,” Ms Yim said.
The HKTDC’s Research Department also conducted a series of company interviews to explore how technologies have promoted smart-city development and helped local enterprises ride out the COVID-19 challenges.
HKTDC Economist Melissa Ho said the pandemic has accelerated the transformation of the retail industry. Technological solutions such as data analytics, the Internet of Things and sensors have played a pivotal role in enabling more effective retail management and providing better shopping experiences for consumers. Self-services/self-checkout kiosks, “try-before-you-buy” experiences powered by augmented reality (AR) technology, and the use of sensors for consumption-pattern analysis have become the “new normal” in the retail industry.
“Technology improves operational efficiency and enhances shopping experiences. It is important for retailers to keep up with the fast-paced change in customer needs and expectations by enhancing their capabilities and competitiveness through digital enablers,” she said.
Local companies need to upgrade and transform in four key areas amid the pandemic: developing new products, expanding sales channels, innovating marketing solutions and optimising work processes. HKTDC Assistant Principal Economist (Global Research) Louis Chan said that medical and healthcare products as well as tech-related (including 5G, artificial intelligence, and AR) products emerged with the rise of “stay-at-home” economy, while the online-to-offline business model continued to grow with cross-border e-commerce becoming a new focus.
“Content marketing on social media as well as more precise and personalised marketing backed by data analysis will become the new normal. Mobile technology-aided game marketing can help companies win support from the new generation of consumers,” said Chan.
He noted work optimisation can be achieved by applying various technologies, citing the example that automated systems supported by robots can enhance warehouse efficiency and delivery accuracy. Cloud database, remote and machine learning technology can also help optimise logistics efficiency, improve production management and reduce risks, added Chan.