HONG KONG'S TOP LOCAL BRANDS
For a city that prides itself on moving fast and adapting to change, Hong Kong produced a curiously traditional collection of homegrown brands when we asked respondents to name their locally based favourites.
The names mentioned most are such stalwarts—ParknShop, HSBC, Vita/Vitasoy, Lee Kum Kee, Garden, Wellcome, Maxim's—that the list could have been written five years ago. Or 10. Or 30. And in fact, many of the top local brands themselves could be considered somewhat ossified; they've changed precious little over the years, and in some cases, decades.
This year's top brand, ParknShop, is a good case in point. The nearly 300 stores bearing that marque might as well be time capsules from the mid-1990s. And the parent company seems more interested in spinning out barely distinctive sub-brands (the current stable includes Taste, Fusion, Great, Food le Parc, Gourmet, International, Su-Pa-De-Pa and Express). Yet there the brand sits at the top of the list (it placed second last year). To be fair, the company has invested a lot in building ParknShop into a credible online grocer in recent years.
There's nothing wrong with venerable brands, but still, there's a distinct lack of up and coming brands on the list of local faves. Does it reflect a lack of innovation in the market? The dominance of the few large conglomerates that own many of the household names? The difficulty new brands face establishing themselves in a market with sky-high rents? A reluctance among the local populace to trust new players until they've proven themselves over a long span?
Probably all of the above. But Stephen Thomas, head of group brand and communications at AIA (itself a strong locally based brand) says Hong Kong consumers have always been discerning. "Hong Kong is a market in which brand loyalty is very hard to win, but easy to lose, with younger consumers in particular prepared to switch brands if their experience does not meet their expectations,” he adds.
So more power to the local champions for staying on top, according to Blums Pineda, HK-based partner at global brand consultancy Prophet. "These brands are learning all the time, and acting on those learnings," he says. "It’s what helps them stay relevant, find new customers, and continually reinvent themselves for the future. The quest for relevance and transformation never stops for these brands which is why they have the results to show for it."
To take Maxim's for example, Eunice Wong, chief growth officer for Greater China at Ketchum, says the company has made good use of celebrities and opened new concept stores. An innovation in mooncake also shouldn't be underestimated, according to Pineda.
Meanwhile, Wellcome, though still high in the list, trails ParknShop. "Wellcome focused too much on price strategy for decades, and failed to realize that Hong Kong consumers, especially the young generations (post '80s and later) have a different request on shopping," Wong says. "A supermarket is no longer just 'functional' to them, it should be part of the lifestyle, and even late enjoyment after the long working hours. ParknShop is doing a far better job to immerse into the lifestyle."
Brand equity in action
A couple of examples of local brands that made strong gains this year suggest that Hong Kong is surprisingly loyal to its best-established, most iconic names. One might even conclude that the public rallies around its hometown heroes when they stumble.
Example 1: The MTR rose significantly in a year that saw it not only embroiled in a construction scandal but also enduring criticism after an unusual number of breakdowns and delays, including a crash that led to the most FUBAR'd morning commute in living memory. The accident, which luckily took place during an overnight test and involved no passengers, doesn't seem to have damaged the pride Hong Kongers take in their city's subway system.
Ketchum's Wong has a different view. "I am very surprised to hear this is still strong after so many crises with bad handling," she says. "I suspect more consequence will be reflected next year than this year."
Example 2: Cathay Pacific also rose substantially despite suffering a serious data breach in late 2018. (A new ad campaign and a controversy over an innocuous ad showing a gay couple came about too late to factor into the Top 1000 Brands research.)
"It's good to see a proud Hong Kong brand is climbing back after a few rounds of big crisis," Wong says.
Slipping and fading
One possible area of dissatisfaction, and thus a sector ripe for change, may be banking. HSBC slipped from being the top local brand a year ago into second spot, behind ParknShop. More worrying, local power (and HSBC subsidiary) Hang Seng Bank fell significantly. Consumers are well aware of the superior online service available in other markets, which banks in Hong Kong have been slow to emulate, largely due to the regulatory framework. With licenses for digital banks now being awarded, the traditional powers may face stiffer competition in the coming years.
Wong suggests another reason for Hang Seng's decline. "When a bank brand is more aggressive with loan products, it steps into the territory of [loan providers] Promise and UA, which is less aspiring," she says. "Furthermore, its image and the way of communications are still very traditional and conservative, which blurs its brand proposition and product edges."
Another fall worth noting is that of Yahoo. Though not technically a local entity, the company has for many years been mentioned when we asked Hong Kong people to name their top local brands—a testimony to the affinity people felt for the company's Chinese-language news site. However, the brand's standing this year declined substantially.
New economy additions
Several newcomers in group of local faves this year indicate that Hong Kong folks will warm to new brands that provide valuable service. You can count streaming service ViuTV, delivery app/service Gogo Van, online-oriented insurer FWD, and online retailers HKTVMall and Red A in this camp.
Arguably, a strong showing by TVB has a lot to do with its popular streaming service. In addition, while they aren't actually Hong Kong-based, China's Alipay, Tencent/QQ and Taobao also represent newer brands that have won over enough local hearts to get mentioned.