Ventures Dialogue

This week Carla Kearns is posting a series of observations made during her visit to both Hong Kong and the Hong Kong Forum.

The last 48 hours have been a whirlwind.  We spent Wednesday in the incredible Central district on Hong Kong island, involved in some serious consumer research.  This district is home to both Hong Kong’s vast financial sector and charming historical district, accented by shopping that ranges from Louis Vuitton and Armani to tiny alley stalls selling ornate bird cages.

Some Hong Kong shopping observations

There is an awareness of the importance of recycling and conserving energy.  The major difference from when I enjoyed quite a few trips here in the 1990s is that the air pollution has drastically increased.  It is clear that what Hong Kong experiences is for the most part not generated in Hong Kong but is coming from the manufacturing cities of Guangdong (Canton) province right across the Chinese border.   Here in Hong Kong you see recycling containers at Starbucks and select escalators that are shut down at non-peak hours in the metro system (which itself is cheap, fast and clean).

We saw billboards for Blackberry and sharp retail fronts for a Fruits and Passion store. There was some unusual examples of Canadian branding including Toronto Sports (selling sporting attire), The Keg in Lan Kwai Fong (a pub in Hong Kong’s upscale bar district) and an ad for Canadian buckwheat pillows. The latter seemed to make a connection with Canadian branded products as being clean, healthy and natural – which is an obvious brand attribute of Canadian products in Hong Kong and China.  There are enormous opportunities in the Environmental sector in China — according to the Canada Hong Kong Chamber of Commerce, the Chinese government is about to come down with an enforcement hammer on the high pollution factories of Guangdong province.  Since these manufacturers are an integral part of the engine of Chinese growth, the government is actively seeking international partners to assist with the clean up.  In my role as co-chair of the Canada China Environmental Forum (along with Corey Diamond, President of the Summerhill Group) we have been working for the past 2 years to raise awareness of the immense environmental, social, economic and diplomatic benefits for Canadian environmental companies to become more proactive in collaborating with China in this sector. It seems to be working: this week, Corey is in China with Premier McGuinty on a high profile environmental sector mission.  I’ll be meeting up with them in Beijing this weekend.

Carla Kearns with Frank Montiero and Dorothy Jean Mar

Tuesday night we met up with the Hong Kong Canada Business Association (HKCBA) family for a special dinner for Canadian delegates.  A word that I would use to describe the HKCBA is “generous”.  Members who have been involved in the organization for years are so generous with strategic and practical advice as well as in facilitating connections.  We had the good fortune to be seated with several Canadians who are currently living in Hong Kong and were very grateful for how, after learning about our businesses and objectives, were quick to lend their assistance.

Wednesday was the first full day of events.  The common concern at the top of everyone’s mind is the global economic turmoil.  At lunch we were addressed by the Honourable John Tsang, the Financial Secretary for Hong Kong.  Among his many accomplishments he is most beloved these days for lifting the oppressive wine tariffs in Hong Kong.  He, like several other commentators, feels that Hong Kong will be impacted by the financial crisis but will weather the storm and emerge even stronger, as it has from other events such as the Asian financial crisis, the shocks of 9/11 and the SARS crisis.

Lunch address

The highlight of my day was listening to Canadian Janet DeSilva (CEO Retail China) and Viveca Chan (CEO WE Marketing) speak about the latest trends in retail distribution in China.  They commented that the emergence of the vast middle class in China will have an even greater impact on the world than China’s rise as a manufacturing giant.  Chinese consumers, in a few short decades, have become increasing sophisticated, and foreign retail brands need to have a deep understanding of how this market is unique in order to be successful.  It is imperative that brands develop a emotional connection with consumers in order to differentiate from the millions of other products on the market there.  On the flip side, brands that emotionally alienate Chinese consumers run the risk of their market share being destroyed. For instance, the French supermarket giant Carrefour was boycotted by millions of Chinese consumers after they perceived that the French insulted their national pride during the Chinese torch relay in the spring (even though Carrefour in China is actually Chinese owned).  One of the significant retail trends that Janet mentioned is the emergence of product related reality and lifestyle TV shows, such as a show produced by Fruits and Passion that shows its viewers how to create a home spa.  This kind of marketing is important because the traditional ad industry channels (TV & radio commercials and print ads) are high regulated and restricted by the government which requires savvy advertisers to be creative in non-traditional channels.

I’m looking forward to the gala dinner tonight.  One of the unexpected benefits to a trip like this is the bonding that can happen when a group of like minded individuals travel together.  After a day of business programming, some of the most important conversations can be over a glass of wine in the evening.