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SCED's speech at 14th Efficient Customer Response Asia Pacific Conference and Exhibition 2015 (English only)

     Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the 14th Efficient Customer Response (ECR) Asia Pacific Conference and Exhibition 2015 today (March 24):

Mr Phi (Chairman of GS1 Hong Kong and President of LF Logistics Management Ltd, Mr Joseph Phi), Ms Rice (Supply Chain Director of Global Travel and Middle East of Diageo, Ms Joy Rice), Mr Rose (Chairman and Chief Executive Officer of House of Rose Professional, Mr Anthony Rose), distinguished guests, ladies and gentlemen,

     Good morning. It gives me great pleasure to join you all at the opening of the ECR Asia Pacific Conference and Exhibition. First of all, I would like to extend my warmest welcome to all the guests and participants, especially those from overseas and the Mainland. I would also like to thank the ECR Asia Pacific Council and GS1 Hong Kong for organising this premier regional event. This is an excellent platform for forerunners and leading practitioners in manufacturing, distribution, wholesaling and retailing to collaborate and share insights on the evolving trends of retailing and customer demands.

New generation customers

     The retail industry has seen revolutionary changes in the past decade. The popularity of the Internet, e-commerce websites and social media has given rise to a new generation of customers with new sets of demands and consumer behaviour. How are these customers different from traditional ones? First of all, these customers, being adept at a digital lifestyle, are likely to be more connected, better informed and constantly engaged. Empowered by technology, these consumers are inclined to do product research and price comparison on the web, search online for e-coupons, check social network and online forums for reviews and comments. They get information online, irrespective of whether they will eventually shop at a physical store, or through a website or mobile app. Their shopping habits are closely tied to today's digitalisation and mobility trends.

A seamless shopping experience

     To address the needs of this new generation of customers, innovative retailers are leveraging on digital technologies to provide a seamless shopping experience. By making use of online platforms, social media and mobile apps intelligently, these retailers have successfully captured the attention of the new generation customers through online marketing. Depending on their business strategy, these retailers either offer e-shopping sites or adopt an "online-to-offline" strategy to redirect customers to retail stores to close the deal. Some retailers, on the other hand, implement an "offline-to-online" strategy. They run flagship stores at big shopping malls and prime shopping spots to showcase their products. In parallel, they offer e-shopping sites, providing all kinds of special offers and discounts for customers to shop online.

Technologies influence consumer behaviour

     Being a digital city with ubiquitous Internet connectivity, a high mobile penetration rate and a tech-savvy community, Hong Kong is full of new generation consumers. To help drive sales, a local household and furniture chain store has launched a virtual store to maximise its reach to a diversified spectrum of passengers of our Mass Transit Railway (MTR). Instead of just promoting their products on poster walls in MTR stations, the chain store offers revolutionary online shopping for passengers. By scanning the QR codes of products posted on the poster wall, customers can use their mobile phones to shop online.

     While new technologies influence consumer behaviour, consumer behaviour also drives the rules of business today. Recently, a jewellery chain store in Hong Kong has adopted an innovative means to capture consumer preferences. The store makes use of "smart trays" equipped with RFID (radio-frequency identification) sensors to present their jewellery items to customers. Keeping track of all the jewellery movements through Internet of Things (IoT) technology, the chain store makes use of big data analytics to analyse customer preferences. Through analysing data like designs viewed by customers, frequency of viewed designs, duration of views and sales ensued, the most coveted styles, materials, and characteristics of jewellery items can be identified for the production of popular and saleable designs.

More informed and engaged customers

     Nowadays, customers like to be more informed and engaged. Online marketing is becoming a powerful tool to market products and engage them. Just to give an example as an illustration, a Hong Kong developer has developed an award-winning mobile app, iButterfly, to engage customers through an innovative concept. By combining augmented reality, motion sensing and location-based technologies, users of the mobile app can acquire discount coupons as well as marketing information by catching flying butterflies using smartphones. This "gamified" marketing mobile app successfully integrates social gaming and e-coupon download services to provide a brand new user experience for consumers, making e-coupon marketing fun and engaging.

     To keep consumers more informed of product details, GS1 Hong Kong has also developed an innovative application, "Consumer Connect", through the sponsored funding of Government's Sector-specific Programme. By scanning the 2D barcode of a product with a mobile phone, the app will show the latest product information and verify its authenticity instantly. Consumer Connect not only informs consumers, but also serves as a channel for consumers to get the latest promotion offers or digital coupons, allowing greater engagement through user interaction.

Government support to retail industry in improving customer response

     Retail is a huge business. According to statistics, shoppers spend more than US$3.6 billion a month in Hong Kong stores. Efficient response to customer demand through innovative technology is crucial to maintaining the competitiveness of our retail industry. The year 2013 saw the establishment of Hong Kong IoT Centre of Excellence at the Science Park to promote wider application of IoT technologies, in particular in supply chain management, which is also a key aspect in improving customer response. Moreover, we set aside HK$50 million and launched a "Retail Technology Adoption Assistance Scheme" last year to help the retail industry adopt ICT technologies for enhancing their productivity and managing manpower. To further drive Hong Kong's innovation and technology development as well as technology adoption across industries, we are in the process of establishing the Innovation and Technology Bureau to provide high-level leadership and stronger policy co-ordination.

     The demands and expectations of customers have been continuously rising. Improving customer response efficiency through innovative adoption of technologies is vital to win customers. This conference-cum-exhibition is an excellent occasion for regional experts and practitioners to exchange insights on ways to improve customer response efficiency. I wish you all a fruitful exchange. For overseas and Mainland participants, I also wish you a very wonderful stay and shopping experience in Hong Kong.

      Thank you.

Ends/Tuesday, March 24, 2015
Issued at HKT 11:15