Hong Kong has a reputation as a ‘shopping capital’, but unless its retail scene adapts soon, the city risks being eclipsed by innovations across the border, said panelists at a future consumer-themed event held by Infiniti in Hong Kong to mark the third iteration of the luxury car firm’s startup acceleration programme, ‘Infiniti Lab’.
“We won’t be here anymore” was the blunt assessment of Elisa Harca, regional director of digital marketing firm Red Ant Asia, when asked about the consequences for Hong Kong if the city doesn’t develop as China has in the next five years.
“The luckiness of China is that it has had to innovate because of the sheer size of the country,” continued Harca. E-commerce was introduced so quickly in China because it was the only way people in lower-tier cities could access a vast range of products. “Consumers there are very open and willing to engage,” said Harca, citing the example of a recent Mini Cooper campaign that saw 100 cars sold in four minutes over WeChat.
While Hong Kong wants to be innovative, it is still held back by an over-reliance on a traditional brick-and-mortar retail model and a culture of asking “who else has done it?” before committing to new practices, the panelists agreed.
An opportunity for change may be in the works, however: the debate was held a day after chief executive Carrie Lam's maiden policy speech, in which she announced tax breaks designed to help small businesses in the city and reward companies investing in R&D.
Capitalising on this means Hong Kong needs to “find the balance between online and offline experiences” just as China has done, explained Dane Fisher, general manager of global business transformation and brand at Infiniti, illustrating his point with an example from the Chinese automotive market. Autohome in Beijing is the leading website for car consumers in China with some 92 percent of dealers in the country using their platform, he said. “They have created a very clean delineation between online and offline and they do an excellent job of working with dealerships to know their customer needs,” he said.
Challenging the status quo in this fashion is part of the reason Infiniti chose the search engine startup Things as one of the seven fledgling companies that will take its accelerator programme this year. This year-old German-based company helps customers find products in local shops and make immediate purchases, bridging the O2O gap.
Another noticeable trend in the company’s choice of startups—of which two are native to Asia—was a connection to the ‘sharing economy’: along with autonomous driving, said Fisher, this will be the factor that “re-shapes the [automobile] industry as we know it” in coming years.
Cove, for example, is an on-demand car sharing programme based in Hong Kong and a new Infiniti Lab member. Founded in March by Xiu Tian Khaw, Cove's app pre-approves users who can then choose a car from any of the company's brand partners, have it delivered to their building and unlock it using the app. “We want to make it feel like it is your own car,” said Khaw, who says the app has had over 1,000 downloads since its inception. Cove is also able to feed back data directly to manufacturers, who traditionally have to rely on dealerships to pass back insights on consumer behavior.
Ease of use is a defining element of all technology being developed by the new companies—and a critical factor in engaging the consumers of tomorrow, said Lawrence Morgan, CEO of the HK-based venture capital firm Nest, which has partnered with Infiniti for the Lab programme.
This applies to consumers of any age, he said. While Asia does have an ageing population, the average generation Z-ers will also turn 17—the legal driving age in many countries—this year and they represent a key progressive target market for Infiniti. Entrepreneurial, globally minded, less influenced by ads, "How do you cater to them without alienating your older base?" asked Morgan. "What you can't do now is put all your eggs in one market."
"We're in transition from a product-led to a service-led industry," said Morgan. "These startups are helping shape how the consumer will approach the automotive industry."