III. Management Characteristics of Hong Kong Retail Industry
(A) First-class Service, Super-value Products
Good sales service has added much color to Hong Kong's retail industry. From the moment customers walk into a store, they will enjoy excellent service. Merchants consider everything from the consumer's needs: a good shopping environment, salespeople guiding and introducing products wholeheartedly, being courteous,热情friendly, providing high-quality super-value products. This raises the quality of consumers, making the consumer market healthier, where entering is being "God," and leaving still makes one a friend. High-quality products and super-value services allow the retail industry to establish a good corporate image without excessive publicity, effectively reducing sales costs, thereby enhancing the reputation of the entire Hong Kong retail industry.
Providing super-value services to customers is the common goal pursued by Hong Kong retailers. This is also closely related to the pragmatic business style consistently adopted by Hong Kong entrepreneurs.
(B) Advanced Management System
1. Establishment and Utilization of Information Systems
Chain stores and supermarkets are the main forms of Hong Kong's retail industry. CR Vanguard, Wellcome, ParknShop, McDonald's, G2000, and some jewelry retailers (such as Chow Sang Sang) have established a complete sales network covering their affiliated supermarkets or chain stores to reduce costs, improve services, and enhance market competitiveness.
Take Hong Kong's G2000 clothing company as an example. It has introduced the most advanced automatic hanging and packaging system from Italy (the first in Southeast Asia so far), while establishing a storage information system centered on computer terminals. Due to the high cost of land in Hong Kong, the efficiency of counter utilization becomes an important indicator of whether operations are successful, marked by sales per unit time and unit area. The G2000 company reduces inventory of each size to the minimum and ensures timely delivery of goods to required branches within 48 hours, thereby reducing costs and improving capital utilization. Specifically, the headquarters' sales planning department collects real-time sales information from each branch through computers, analyzes it, and passes it on to the warehouse. The warehouse then arranges orders via computer according to this information, following the principle of replenishing one for every sold item, delivering as soon as possible. All this depends on the networking between sales stores, the planning department, and the warehouse. At the same time, after analysis by the planning department, timely information is provided to the production department to implement production based on sales and demand, adopting different methods for handling products with varying sales speeds, focusing on efficiency.
2. Tapping the Potential of the Retail Industry and Fully Exerting Its Intermediary Function
Hong Kong's economy is highly developed, and its consumer market is mature. Faced with enormous consumer power, larger-scale retailers reduce costs and win the market by leveraging their purchasing quantity and scale, combining with manufacturers to pass on consumption domain information to producers. They conduct market research based on their own characteristics, continuously developing new service projects, fully exerting their bridging role to meet constantly changing consumer demands (for example, the cooperation between ParknShop and Coca-Cola Company benefits both parties simultaneously, enhancing their corporate images, which is an example of mutual promotion).
(C) Combination of Capital Operation and Goods Operation
Retail is mostly cash transactions. In addition to having a modern and complete financial system, retail enterprises must manage funds (i.e., maintain value) extremely well.
Hong Kong's retail industry often combines goods operation with capital operation to preserve the value of funds. In the second half of 1997, during the Asian financial crisis, Hong Kong's Monetary Authority preserved Hong Kong's exchange rate, leading to rising interest rates and general economic downturns, increasing the operating costs of the retail industry. Guangnam Group, controlling Hong Kong's fresh food market, sought opportunities amidst the crisis; while venturing into supermarkets, it conducted purchases and mergers, established an advanced information system, developed its product network, engaged in diversified operations, enabling vertical integration between supermarkets and other internal departments (food, re-export trade, investment processing). This surpassed the traditional internal expansion model of reproduction, using prudent methods to operate funds in the capital market, engaging in capital operation, avoiding risks, and achieving capital appreciation. It plans to cultivate this as a profit growth point within the next 10 years, thereby maintaining its position in fierce market competition under unfavorable economic conditions.
(D) Establishing Training Departments, Defining Corporate Culture
Many retail enterprises in Hong Kong have training departments responsible for training new employees, enhancing professional qualities, spreading corporate culture. Meanwhile, they regularly organize employee exchanges and promptly feed back information to the leadership level, which continuously informs employees about the company’s operational information, ensuring smooth communication between upper and lower levels. Additionally, the enterprise summarizes and promotes advanced experiences of employees, implements resource sharing, improving the overall service quality of the enterprise. Moreover, there are evaluation systems for employees within the enterprise. For instance, one of G2000's evaluation methods is treating each other employee within the company as their customer, and these customers are their bosses. Their performance is determined by these bosses scoring them across several indicators, then weighted and totaled to finally determine the result.
IV. Prospects of Hong Kong's Retail Industry
Given the high rent of Hong Kong properties and the economic downturn affected by the Southeast Asian financial crisis, the Hong Kong dollar's peg to the US dollar and the strong US dollar exchange rate have caused the Hong Kong dollar to remain high, resulting in a decline in tourism, making Hong Kong's retail industry decrease by thirty percent in January 1998 compared to the previous year (property owners have already negotiated with the retail industry to lower rents to save the market). Hong Kong's retail industry should pursue distinctive operations, further control costs internally, accelerate capital flow, break through original operation models, implement various combinations of operation methods, adjust structures, expand and strengthen itself through mergers, acquisitions, and other means in Southeast Asia, achieve strategic operation shifts, seize opportunities, welcome a new round of economic growth, and make the retail industry a new growth point.
V. References for Mainland China
(A) Improve Quality
The first problem that mainland China needs to solve in developing the retail industry should be to improve product (service) quality and ensure persistence, eliminating counterfeit and substandard goods, removing malformed prices that lead to malformed consumption, strengthening relevant departmental monitoring capabilities, supplemented by necessary punitive measures.
(B) Pragmatic Operations
The development of the retail industry is based on necessary economic levels (average GDP domestically is $620). The mainland's consumption environment (transportation, communication, population distribution, land area) is completely different from Hong Kong. Retailers should combine their own strengths, focus on practical operations with efficiency at the center, and develop appropriate organizational forms. For instance, a large part of China's consumer market is in rural areas, and coastal rural economies are relatively developed, with high population density, an economic foundation for consumption, and convenient transportation. Therefore, chains and supermarkets should follow the path of rural development rather than concentrating only in cities. However, inland rural areas have backward economies, low population density, and inconvenient transportation, necessitating urban development initially. Product positioning can only follow the path mainly focused on necessities.
(C) Advanced Management Methods and Systems
One of the main aspects of enhancing competitiveness in the retail industry is cost control. The development of the retail industry in mainland China should follow the path of economies of scale, aided by advanced management methods, such as the use of information systems, adapting to scientific management requirements to play the role of information and truly achieve the purpose of reducing costs. Simultaneously, implementing established management systems effectively.
(D) Personnel Quality
One of the greatest inspirations from the development of Hong Kong's retail industry is having high-quality employees. Mainland China should focus on improving employee quality to enhance service quality, exiting the service misconception under the state-owned system, shifting towards consumer-centered approaches. Meanwhile, advocate pragmatic business styles to promote the healthy development of China's retail industry, fulfilling its role and contributing to economic development.