Showing Hong Kong some love, without irking the mainland

HONG KONG IDENTITY AND BRAND STRATEGY

The recent protests in Hong Kong over a planned China extradition law have thrown into stark relief—and raised the stakes—on an issue that has long been a source of challenge for marketers. The difficulty of communicating with both the local market and the mainland market without alienating one or the other.

The situation has become more polarised in recent years, and especially this year, according to Ray Rudowski, MD at Epic Communications in Hong Kong. "The polarization is based around a variety of socio-economic and political factors as Hong Kong people find themselves facing the prospect of losing their unique cultural identity amid fears of Beijing exerting more influence over the city’s affairs."

As the recent protests make clear, Hong Kong consumers see themselves as distinct from consumers in mainland China, which creates threats and opportunities for both local and international brands. For example, luxury brands very often market both locally and to mainland travellers, walking "a fine line" to "manage local expectations without compromising or offending the sensibilities of the wider and more complex mainland market", Rudowski says. "The local marketing strategies for any large international brand with a major foothold in mainland China must be mindful of the social-political environment in Hong Kong, or they risk alienating their consumers in both markets.”

"Nativism becomes a long-running theme in Hong Kong," agrees Angie Wong, managing partner at Publicis Groupe Hong Kong. "More than ever Hong Kong consumers want their identity, their culture and their spirit to be heard, seen and reassured. Brands that embrace and celebrate the unique socio-cultural elements of the city will pique consumers’ interests."

Wong's colleague, Kamfatt Chen, managing partner of strategy and transformation at Publicis Groupe Hong Kong, agrees. "Increasingly, consumers (particularly the youths) are gravitating towards brands that share their beliefs and values—not just in words, but also in action. To that end, we are seeing a trend where brands in Hong Kong are becoming more courageous and vocal in taking and expressing their stand—whether on environmental, social, or even political issues."

Stephen Thomas, head of group brand and communications at AIA, also underlines that given a choice, consumers will gravitate toward a brand with a clear purpose. "In Hong Kong, consumers care deeply about supporting brands that they view as being focused on doing the right thing," he says. "This presents not only opportunities, but indeed an imperative, for brands to show in an authentic manner that they have a purpose underpinning their business model."

Chen also uses the term "imperative" to describe the "new normal of radical transparency" and the need for brands to be more open and communicative.

Yet risk is present when that desire to communicate and support veers into political areas, says Rudowski, who points to the example of brands that recently withdrew ads from TVB amid criticism of the broadcaster’s coverage of the protests. "That move was welcomed by Hong Kong consumers but heavily criticized by key influencers in mainland China," he notes. "This trend will continue to play a major role in how brands are viewed locally in Hong Kong and the fine line they will walk in managing consumers’ expectations of what they define as important to their purchase decisions.”

Identifying key influencers and celebrity endorsers who connect with the target Hong Kong consumers without sparking the anger of mainland netizens is becoming a key strategic branding consideration for brands with a presence in both markets, he adds.

As Hong Kong consumers wield their influence to ask brands to be part of a wider conversation about the territory’s political future, it's even conceivable that some brands will be forced to make a choice. "The strategic pivot will be whether those brands choose to exit the market to protect their mainland-based businesses,” Rudowski says.

The alternate viewpoint, of course, is that business opportunities will make Hong Kong more like the mainland as time goes on. Eunice Wong, chief growth officer for Greater China at Ketchum, says giant China brands are growing fast in Hong Kong, including Taobao, DiDi and WeChat. "This trend is being foreseen to grow stronger when there would be more interaction between HK and China under the Greater Bay Area policy," she adds. Meanwhile, European brands overall are losing their "halo" in Hong Kong and even Asia.

And the political climate is, needless to say, not the only factor marketers in Hong Kong need to grapple with.

"Locally we see situations in which a greater demand for companies to be more environmentally conscious, especially around packaging, sourcing, integrity of ingredients," Rudowski says. "This is an area of both huge opportunity but also huge risk if not managed properly.”

Emily Wong, regional marketing director of health and beauty for Asia and Eastern Europe with Watsons says the key commandment for brands is to avoid "one size fits all" communications.

"The successful element of brand is to build stronger loyalty through customers' data together with digital search trends," she says. "This fully helps how we can do better relevant and personalised communication. Data science supports brands to understand the customer behaviour, and more data supports brands to acquire, grow, retain and advocate our brand loyalty."

Customer search trends can uncover hidden opportunities for product development and service expectations, Emily Wong says. For example, learning that Hong Kong people like to shop at Watsons when they visit other countries led the brand to extend member privileges to HK people when they are traveling abroad. "We can provide them more personalised suggestions based on what they would like to buy at Watsons overseas," she says.