If there’s one thing that the pandemic has taught us, it’s resilience. Businesses all over the world have been forced to adapt, and Hong Kong is no different. The business landscape in Hong Kong has changed dramatically since the outbreak of Covid-19. With strict social distancing measures in place, many businesses have had to close their doors, while others have been forced to pivot in order to stay afloat. In this article, we will take a look at how businesses in Hong Kong are coping in the aftermath of the pandemic, and what measures they are taking to revitalise their operations. We will also explore some of these strategies as well as some government measures to help in doing business post-pandemic.
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How Covid-19 affected businesses in Hong Kong
According to the Census and Statistics Department, Hong Kong, the four key industries for Hong Kong in 2019 were as follows:
- financial services,
- trading and logistics, and
- professional and producer services
According to their report, the total value added in these industries in 2020 with regard to the country’s Gross Domestic Product (GDP) was 2.1% lower compared to the GDP in 2015 which was mainly contributed by the drop in tourism.
On top of that, consumers’ general spending patterns took a great shift approximately 44% stated that they would be more careful in how they spend their money. This shift could partially be blamed on how the employment market took a substantial hit whereby the unemployment rate increased to a whopping 4.5% between December and February 2021. The Hong Kong economy heavily relies on the abovementioned industries, especially tourism. Therefore, when the government closed its borders, this increase in the unemployment rate, as well as the overall performance of the country, was not out of the ordinary.
Government incentives to help businesses post-pandemic
Following this, on 8 April 2020, the Hong Kong government provided incentives in the form of monetary, fiscal as well as stimulus packages to help businesses and individuals alike.
2020 Stimulus Package
Globally, many countries were providing stimulus packages to their citizens at the height of the pandemic, and it was no different for Hong Kong. For instance, the banks were asked to provide a moratorium on loan repayments. The government also provided rent concessions to tenants renting in government properties. This was to help ease the burden of the citizens who lost their source of income. Besides that, the Hong Kong government also provided assistance in the form of one-off relief grants to service sectors providing to hard-hit sectors such as educational institutions. These grants were also given to sports coaches, estate agencies, and many other hard-hit sectors. More on this here.
Budget 2022 to help businesses
In February 2022, the Hong Kong government announced its budget which included spending plans worth HK$170 billion to boost the Hong Kong economy post-pandemic. In the Hong Kong Budget 2022-23 announcement by the Financial Secretary, Paul Chan, there were four key takeaways, as follows:
- Reduction in profit tax for businesses and salaries tax for individuals
- Consumption voucher worth HK$1,000.00
- A HK$10,000 subsidy for the unemployed
- Rental waiver for businesses that were closed during the pandemic
More on the Hong Kong Budget 2022-23 can be read here.
Strategies to ensure business continuity post-pandemic
While we agree that some businesses prospered during the pandemic, there were many others that drowned. However, there was a good number of businesses in Hong Kong that continued to thrive despite the trying times. On top of the incentives given by the Hong Kong government, these businesses took it into their own hands to ensure that their businesses continue to flourish despite the changes in the economy. These are some of the strategies that businesses have adopted:
Many businesses have started to diversify their products and services to ensure that they are able to weather any future pandemics or economic downturns. This method would help businesses expand their customer base as well as establish multiple revenue streams – a benefit that the pandemic taught us to focus on. For example, a business that used to only sell physical products in a brick-and-mortar shop may start to sell digital products or services as well. While this method may not increase profit significantly, it avoids the notion of putting all eggs in one basket.
In recent years, there has been a shift in how consumers behave and make their purchases. Therefore, on top of the above method to diversify income streams, there has also been a shift in how businesses market their products. An omnichannel marketing strategy allows businesses to be present on multiple channels while providing a seamless experience for customers. More customers these days are tech-savvy and opt for convenience where possible. Thus presenting many channels – whether online, offline, or even on social media platforms, gives a vast option to consumers giving an option to consumers. Businesses that have successfully adopted an omnichannel marketing strategy have reported an increase in sales and brand awareness.
Data-Driven Decision Making
The pandemic has forced businesses to change the way they operate. Many business owners have started to rely heavily on data when making decisions for their businesses. This is because data provides valuable insights that can help business owners make more informed decisions. For example, data can be used to track customer behavior and trends. This would allow businesses to anticipate customer needs and wants, and adjust their products or services accordingly. Additionally, data can also be used to monitor the performance of marketing campaigns and strategies. By understanding which marketing channels are performing well, businesses can focus their resources on these channels and produce better results. Now that more people are adopting the ‘new normal’, this method is sure to help.
Adapting to the new normal
The business world has changed drastically over the past year, and it is important for businesses to change with it. Having said that, businesses have also started to adapt their operations to the new normal. For instance, many restaurants have started offering delivery and takeaway options as dine-in options are no longer viable during the pandemic. Now that Hong Kong has moved towards an endemic stage, the takeaway option still stands strong. This clearly shows that a lot of these changes made during the pandemic have become the norm among users.
On top of that, businesses have also started to increase their focus on digital marketing as more and more people are spending time online. Therefore, promoting your business on online platforms such as social media and Google is advised. Besides that, digital marketing is more cost-effective and allows businesses to reach a wider audience. Additionally, it also allows businesses to track their performance more easily and make changes accordingly. For example, a business owner may notice an increase in their web traffic perhaps due to proper keywords being used. However, despite the increase in traffic, the conversion rate still seems to be low. With this data, which can be tracked using online tools available, businesses can adjust their marketing strategy to put more focus on improving conversion rates.
Should you be worried about starting a business post-pandemic?
During the pandemic, we have seen many businesses forced to close down due to the lack of business. However, this does not mean that you should not start a business post-pandemic. In fact, there are many opportunities for businesses to start up now. The key is to identify these opportunities and make use of them. For example, with the rise of digital marketing, businesses that are able to make use of this opportunity will be at an advantage. Additionally, starting a business post-pandemic also allows you to learn from the mistakes made by other businesses during the pandemic. This would give your business a head start as you would know what works and what doesn’t.
All in all, despite the challenges faced by businesses post-pandemic , there are still many opportunities for businesses to grow and succeed. It is important for business owners to be adaptable and make use of these opportunities, especially with the borders reopening which opens doors to foreign investments. Hong Kong businesses are definitely set to thrive hereon.
FAQs about Digitalisation of Business in Hong Kong
- What are some of the opportunities for businesses post-pandemic?
- A lot of companies made measures to cut costs during the pandemic, and some noticed that this effort was not entirely a bad move. This was because, during this point, many companies realised that there are professional outsourcing services available. For example, InCorp Hong Kong could help you with your secretarial needs and more.
- How can business owners be more adaptable to changes?
- In the past, companies relied on a lot of face-to-face meetings with clients and physical events to make their pitch. However, post-pandemic, with more people being digitally savvy, businesses could entirely focus their marketing efforts online and still see growth in sales. This effort could save you a lot of time and money as all it would take is to hire a good marketing associate, or entirely outsource this service to agencies.
- What should business owners do to take advantage of the post-pandemic economy?
- With the Hong Kong government providing numerous incentives to promote businesses to grow, business owners should take note of these measures and make use of them.