Retail Asia Expo 2018 – An era of retail digitalization


The Retail Asia Expo 2018 took place in the Hong Kong Convention and Exhibition Centre from the 12th to 14th of June. The event showcased retail solutions and innovations from both local and international exhibitors on the area of retail technology, retail-design & in-store marketing, and Internet retailing.

E-commerce Progress

The event heavily focused on the realization that e-commerce and retail digitalization is flourishing in Hong Kong. While Hong Kong is one of the most densely populated areas in the world with extensive networks of physical stores, hindering the development of e-commerce, the city enjoys high computer literacy and easy access to the internet. E-commerce continued to progress with the support of various electronic payment methods, myriad delivery options and wide product ranges of increasing online marketplaces. For example, Octopus launched one-stop Octopus app that combines Octopus’s O! ePay, Octopus app and the Octopus Mobile SIM, and introduced QR code service in 2017, aiming to provide greater convenience. During the past few years, store-based retailers moved online while pure internet players were emerging and developing. For example, Grana is an online fashion retailer based in Hong Kong, offering high-quality and affordable clothing. With its online platform supported by its offline showroom “The Fitting Room”, the company has demonstrated impressive growth since its inception in 2014. Alibaba has also been expanding its presence in Hong Kong through initiatives such as offering free shipping and discount and heavily advertising it’s 11.11 Shopping Festival. The increasing demand for experience oriented retail has also been motivating retailers into adapting a higher level of digitalization. Retailers have been actively building omnichannels to deliver convenience and personalized service to the city’s busy consumers, driving customer satisfaction and fostering royalty.  Furthermore, many of the retailers are now trying hard to improve their operational efficiency by employing various sales tracking, data analytics, inventory management, and marketing tools. Retailers will no longer stay with their original selling channels but pragmatically travel between electronic platforms and bricks-and-mortar stores taking the respective advantages of both. This ongoing integration of online and offline channel will continue to facilitate the development of seamless retailing and advancements in diverse e-commerce options.


Pop-up Stores, Mobile Shopping on The Rise

During the event, “experience” was among one of the most frequently mentioned words during many seminars and panel discussions. In Hong Kong, retailing strategies such as pop-up stores, mobile app selling, and one-stop shopping has gained popularity by focusing on the delivery of fresh experience and consumer satisfaction. The Chanel Coco Game Center opened from May 31 to June 18 in Central, was among one of the great stories of pop up concept that caters to the demand for a unique shopping experience. As rent in Hong Kong continued to stand high, pop up store is increasingly being recognized as an effective alternative that promotes brand recognition across a diverse range of locations, serves to consumers’ need for a fresh experience, and lowers the risk of new store launching.

Store-based retailers are increasingly utilizing pop-up stores to bargain for growth. However, bricks-and-mortar retailers were not alone; online brands also joined the trend to maximize exposure bringing forward the brick-and-click format. In addition, mobile retailing is also expected to yield great potential given millennials and generation Z’s increasing demand for convenience and personalization of their shopping experience. As a result, the ability to trigger the initial adoption of mobile app usage and the introduction of more value-added functions and in-store interaction are considered the key highlights of mobile selling. Hong Kong consumers are very price sensitive; hence, dynamic pricing strategy is frequently used as an initial impulse that incentivize the download and usage of a mobile app. During one of the panel discussion, the country manager from Eatigo also shared his view regarding the opportunity in Hong Kong during the event. Eatigo, as an example, is a discounted restaurant reservation app that provides discounted restaurant deal for off-peak hours dining. Targeting the bargain hunters in Hong Kong, the app has attracted an impressive group of users.

Lastly, one-stop shops that center on the delivery of shopping experience has also been a popular concept. In May 2018, A.S. Watson Group opened a new concept store called CKC18 at Cheung Kong Center. Integrating four different categories “food le parc” for food, “WatsonsLab” for beauty products, “TechLife by FORTRESS” for smart tech products and “Bar 0001 by Watson’s Wine” for drinks, CKC18 is promoted as a shopping and lifestyle hub, tailoring to consumer’s appetite for innovative shopping.

Upcoming Challenges of Digitalization

Among the push for digitalization, retailers face both challenges and the opportunities that comes with its obstacles. Several seminar speakers at Asia Expo agreed that the uncertainties associated with return on investment and the ability to integrate different corporate function departments for a better utilization of data and collaboration are some of the bottlenecks damping the path to digitalization. Among them, Tofugear also shared with event participants their Asia Digital Transformation report, reviewing some of the key trends and market situations in Asia. Setting up a digital marketing platform or upgrading retail channel require upfront capital investment. Uncertainties regarding the profitability and return of such investment has hindered some retailers from this new venture. Moreover, disconnection between different departments has undermined the efficient utilization of data especially within large corporations. If a store manager on the retail side would have to frequently communicate with the marketing or e-commerce department to understand what is happening, the chance of them collaborating frictionless is small. Hence, co-operation between different departments is considered one of the key to a successful digitalization transformation.