Hong Kong business

HKTVmall - Amazon for Hong Kong?

In Hong Kong your supermarket “choice” is largely between shops owned by Li Ka-shing (ParknShop, International, Fusion, Taste, and the Great Food Hall) and Jardines (Wellcome, Market Place by Jason, Threesixty and Olivers). 

It’s no surprise that this lack of competition leads to high prices and poor service, so alternative options are always welcome.

HKTVmall is a mini-Amazon, selling products from a wide range of suppliers, including some good quality imported produce at reasonable prices (e.g. frozen grass-fed beef and lamb, frozen wild-caught salmon, fresh cherries from Tasmania, fresh papaya from Hawaii, etc.), vitamins and supplements at much better prices than Watson or Manning (that duopoly again) and some electronic products.

They also provide free delivery if you spend HK$400 (or HK$250 if you’re a “VIP”).  I remember when ParknShop offered free delivery if you spent HK150, but now their minimum is a hefty HK$800 (Wellcome's minimum seems to be $500).  

The HKTVmall website and app are super annoying and although they do try to keep you informed on the status of your orders, the English versions are often confusing and incomplete:

  • “Our delivery team has picked up products in order xxxxx and will arrange delivery soon.”  Except that I had to collect it from their store.
  • “Product arrived at HKTVmall logistics centre, will be delivered soon.”  Not really sure how this one helps me - why not just send me a message when it’s actually ready for collection?

It’s entirely possible that the Chinese versions of these messages make more sense.  For example, Cantodict tells me that 送 can mean “send”, “deliver” or “dispatch”, which might help to explain the confusion.

But any competition for the ParknShop and Wellcome duopoly has got to be a good thing.


This is part of a series (of sorts).  The previous post was Tesco, Waitrose, Sainsburys, M&S in Hong Kong (with updates here)


Typical PCCW

Now TV is getting a good kicking in the SCMP from readers who are not at all happy that Australia TV is becoming a subscription channel (after previously being free).  PCCW weasels (for it is them) issued a statement saying that this was done after consultation with Australia TV, but it appears to be the type of consultation where one party tells the other what they are going to do, listens politely to objections - and then carries on regardless.

It has been pointed out that the channel is "free" on Cable TV, but what that really means is that you have to subscribe to the Cable TV service to get a selection of channels, whereas PCCW charge for individual channels, with no minimum. 

PCCW is apparently charging HK$12 per month for doing nothing (well, OK, they need a satellite dish and they use their marvellous high-speed network to send it to your Now decoder box).  Well, why not?  Viewers who don't have Cable TV are probably unlikely to switch just to avoid paying a few dollars a month, and it's hard to imagine that anyone at PCCW cares about upsetting their customers.    


Unfair competition

Today's SCMP reports that computer retailers don't like competition:

Computer shops protest at cut-price festivals

Computer retailers switched off the lights at their shops yesterday to voice their anger against cut-price computer festivals they say are ruining their business.

Up to 300 shops at seven malls, including Golden Computer Centre, Golden Computer Arcade, Wan Chai Computer Centre and Mong Kok Computer Centre, switched off their lights for 15 minutes. The focus of their anger was festivals, such as one that has been running at the Mega Box mall in Kowloon Bay since last Thursday, where thousands of buyers look for bargains.

They switched their lights off for 15 minutes?  Well, that'll be sure to do the trick.

Jacky Cheung, who owns eight computer shops in Sham Shui Po, said he suffered a loss of more than HK$1 million every time a festival was held. "Each of my shops makes HK$200,000 less during the month when the festival takes place" he said.  "The computer mall had fewer visitors in the four weeks before the festival and six weeks after it."

Suppliers offered discounts to computer festival participants, further dragging down the price, he said, adding that his business had dropped 70 per cent since its best days in 1997.

The Computer Industry Alliance, which organised the lights-off action, called for a reduction in the number of festivals to save the industry.

The Mega Box festival, launched for the first time this year, was held without the consent of industry players, Lui Kin-chung, a spokesman for the alliance, said. Shop owners who did not have enough staff to join the festivals faced unfair competition.

Right.  So we have someone who owns eight computer shops in one small area complaining about "unfair competition."  I remember visiting the computer mall in Windsor House many years ago to find that about half the shops on one level had suddenly shut down, and from reading the legal notices it was clear that they were all owned by one company.  So let's see if I understand this: 'fair competition' is having multiple shops with different names who can all charge similar prices, and 'unfair competition' is an event that is run "without the consent of industry players."


Thanks for calling

Continuing my occasional series on Hong Kong's least loved companies, now it's the turn of PCCW, or more specifically Netvigator.  Or, to be precise, the complete nonsense that it is their interactive phone menu system. 

I wanted to find out more about their 30 mb/s fibre broadband.  Their website give a phone number and says you have to press '8'.  Well, yes, but that only gets you to the first of about 9 levels, and there's still a lot further to go before you can speak to a person who could provide details and arrange the service.

Bizarrely, the vast majority of the options seem to be dead ends, where all you get is a recorded message - and if there's a way to go back up a level it isn't explained.

They're a technology company, aren't they?  So why can't they design a system that allows callers to be connected to the right department quickly and easily?  You know, to buy something? 

I'm not an expert on these things, but how about having a 2 digit code, so (for example) if I press '33' I get direct through to someone who can sell me a 30mb/s fibre connection.

Yes, that's right, I'm going through all of this to spend money.  I'm not sure why I bother.


Less rewarding

A few weeks ago, HSBC announced that it was changing the conversion rate for Asia Miles, so now you need 15 reward points to get 1 Asia Mile (rather than 12:1, so it's 25% worse).  Compared to other cards that is very mean indeed - some cards give double or triple points, whilst others have significantly better conversion rates.

Now they have announced that (for some of their credit cards), they will no longer offer any reward points for paying bills online. 

Thanks a lot, HSBC.

One more thing.  Whoever designed the "bill payment" section of Online@HSBC (or whatever it's called), deserves a special award for truly awful web design.

What's needed here is a simple, clean, logical design that allows the customer to select a bill, enter the amount and press a button to confirm.  How hard can that be?

It needs to be easy to use for the 95% of transactions that are straightforward.

That means that I shouldn't have to specify the bill type.  If it's an insurance premium it should make that the default type (but allow me to change it).  Likewise, if it's an electricity bill, I shouldn't have to select 'electricity bill'.  If I am doing a more exotic transaction give me an option to change the bill type, but otherwise don't bug me!

Likewise, if I always use my HSBC credit card to pay bills, why not make that the default and let me change to a different payment method if I choose to do so, rather than forcing me to select it every time.

Incredibly, they can't fit this small amount of information on to one screen, so you have to scroll down to find the "confirm" button.  That's ridiculous.

Getting customers to use online self-service applications saves companies a lot of money, so the least they can do is design them to be easy to use (and credit here to American Express, who have finally made their site easy to use).


Zero doesn't mean none

I'm still not quite sure what to make about the curious controversy about changes to the food labelling laws in Hong Kong.

Anyone who has been into a Hong Kong supermarket in recent weeks will have noticed the campaign against the new law, on the basis that some food items would be banned from Hong Kong, mainly because they make claims (such as 'zero trans fat' or 'low sodium') that do not conform with Hong Kong standards. 

Last week a government amendment (to exempt products that sell in small volumes) was defeated in Legco (actually the vote was 26-25 in favour, but somehow that isn't good enough).  These products will now have to carry nutrition labels specifying "energy, trans fat plus six core nutrients, namely (i) protein, (ii) carbohydrates, (iii) fat, (iv) saturated fat, (v) sodium and (vi) sugars on their food labels, as well as any nutrient for which a claim is made".  Which really shouldn't be a problem, because the US and Canada already require the same information, and although there is currently no legal requirement in the UK to list trans fats, most manufacturers do provide this information (and most products are now free of trans fats).

I suspect that a lot of the campaigning on this has either been based on a misunderstanding of the new rules.  For example, the SCMP (subscription required) quoted the president of the American Chamber of Commerce in Hong Kong, Richard Vuylsteke as saying

"We offer information about the nutrient's percentage by serving size, but Hong Kong requires the percentage by overall size. It is difficult and costly for the US food industry to meet Hong Kong requirements."

That's simply not true, as you can see if you read the original proposals or the new legislation.

Also, I can't find any reference to Omega-3 in the regulations, so it would seem that it is not illegal to claim that a product is "high in Omega-3", although this appears in another SCMP report (subscription still required) based on a claim by 'big retailers'.  Maybe they mean that they would have to tell us how much Omega-3 it contains, but I don't think the claim itself would be illegal.

Continue reading "Zero doesn't mean none" »


Down as well as Up

I have no idea what to make of the Hong Kong stock market.  In the last few weeks it seems to have become routine for the HSI to go up or down by hundreds of points for no reason at all, so in response to a general fall in stock markets all over the world, it wasn't all that surprising that it contrived to fall by 2,000 points (8%).

HSI chartThat means the index has fallen by 14% in two days.  Yes, the prospect of a recession in the US is a worry, but is the average Hong Kong company really worth 14% less tonight than it was on Sunday night?  Don't think so.  On the other hand, the earlier rise to nearly 32,000 was clearly absurd - and current levels do seem more reasonable.  But, hey, I know nothing, so I'm not going to risk a prediction. 

One thing I can confidently say is that lots of so-called experts will give us their predictions, and we will hear much about 200 day moving averages and key support levels and other variations on gibberish.  But the fact is that they don't know whether the market will fall another 1,000 points or rebound or just becoming boring again (though I have to admit that the latter seems the least likely of the three).


Not quite what it seems

More nonsense in the SCMP today (subscription required):

Losses from pay TV piracy down 15pc with use of secure network

Frederick Yeung and Celine Sun
Nov 01, 2007

Pay TV piracy in Hong Kong is estimated to result in total losses of HK$213 million this year, down 15 per cent from last year, a poll has found.

The industry expects losses will be further cut as more subscribers pay for the service through the highly secured internet protocol television service (IPTV), according to the survey conducted by the Cable and Satellite Broadcasting Association of Asia and Standard Chartered Bank.

Simon Twiston Davies, the association's chief executive officer, said yesterday: "The IPTV platform is much tougher for pirates and this helps channel operators retain integrity in distributing the content. It is more difficult to hack the system."

The survey also found that total estimated losses in the regional pay TV service due to piracy would be US$1.54 billion this year, up from US$1.13 billion a year earlier.

"The net cost of piracy reduced 15 per cent over the same period last year due to competition driving service charges down," Lee Beasley, director of Standard Chartered Bank (Hong Kong), said.

Legitimate pay TV users in Hong Kong number about 1.45 million. Illegitimate users remain at about 118,000, the same as last year, of which 98,000 are connected through illegal set-top boxes and 20,000 receive satellite overspill signals from satellite receiver dishes.

So there are just as many people "stealing" cable signals, but they would have paid less this year because Cable TV have cut their charges.  That isn't quite the impression you might get from the headline or the comments about IPTV.

It's also rather dubious to argue that watching a satellite TV signal you're not supposed to watch is the same as installing a 'pirate' decoder. 

Mr Beasley said the Hong Kong government was estimated to suffer tax losses of US$4.62 million this year, according to PricewaterhouseCoopers figures.

I'm wondering how they know how much people would be paying for Cable TV or one of the other pay tv services if they weren't "stealing" the cable signal.  The assumption seems to be that each subscriber would pay HK$150/month, but clearly that's a made-up figure.  As for the "lost" tax revenue, that's even more fanciful.

Mr Twiston Davies said: "We don't expect piracy to have dramatic changes in Hong Kong; it is stable as Hong Kong is a competitive market."

He said the pay TV market in the city benefited from market competition. Subscribers were on the rise because of new player PCCW's Now TV pushing the service aggressively by securing exclusive rights to English Premier League football matches from this year to 2010.

His association, which represented 128 Asian-based corporations, took legal action last year against commercial distributors of unauthorised signals in public venues such as pubs during the World Cup football matches, he said.

Keep up the good work, chaps.  Our government needs every dollar of tax revenue they can find.  Don't they?  Hello?


Always look on the bright side

Spike has noticed the same thing I just noticed, namely that HSBC have decided to "improve" their PowerVantage account from the start of next year.

The catch being, of course, that these improvements are accompanied by a substantial increase in the monthly fee if you don't meet their minimum balance requirement - oh, and that minimum balance has been increased from HK$100k to HK$200k.  

If you have less than HK$200,000 in your account, the monthly fee will now be HK$120 (a six-fold increase). 

I remember when HSBC stopped offering Bonus Points on tax payments, and they did the same trick - they made a big thing of a lucky draw and only mentioned the real change in the small print.

My all-time favourite is a company of my acquaintance, which issued an internal announcement saying that due to the great success of product X, two staff were being transferred to the London office.  Only in the second paragraph did they get round to mentioning the fact that the rest of the staff were being made redundant and the office would close down.        


Catching up?

I have a theory that supermarkets in Hong Kong are about 10-15 years behind the UK. 

About 10 years ago, Tesco in the UK introduced their Clubcard scheme, and it has been a huge success.  It's basically a marketing thing - Tesco collects information about what you buy, and in return offers you coupons to spend in their store, either for specific products (based on your buying patterns) or to spend as you choose.  There's an interesting article from the FT here that explains more about it. 

Dunnhumby [the company that runs the Clubcard scheme] takes the information registered on Clubcards each time those 13 million families come into Tesco for their weekly shop, and turns it into five billion pieces of data. Each separate product bought has its own set of attributes. A ready meal can have up to 45 "values" ascribed to it: is it expensive, or cheap? Tesco-branded, or made by Birds Eye? An "ethnic" recipe, or a traditional British dish? Clubcard is the Big Brother of the shopping world.

This information is also stored in a vast search engine that can be used by suppliers trying to launch products. Dunnhumby makes about £30m a year selling Tesco data to more than 200 consumer-goods companies, such as Procter & Gamble, Unilever and Coca-Cola. Within hours of launching a product or introducing a promotion into a local Tesco store, brand managers can track who is buying their products or responding to their promotions. Are they empty-nesters or young mums, lawyers or factory workers? "If you understand who is buying and how they are buying, you can make better decisions," [says director of consumer strategy and futures Martin Hayward]. "The joy of our sample is that it is so large, and because Tesco is so representative of the country it is the best source of insight a supplier can get."

Now ParknShop have finally got round to copying this idea, though their rewards seem rather rather mean.  If you spent £1,000 at Tesco, you would get coupons worth £10, whereas if you spend HK1,000 in PnS you only get a $4 coupon.  On top of that Tesco gives out extra coupons for specific categories, products, or brands, to encourage you to buy something you wouldn't normally buy - and I'm not sure whether PnS will be doing this.

What's clever about Clubcard is that it helps both Tesco and their suppliers to know a lot more about their customers, and to make decisions accordingly.  It has enabled Tesco to achieve a dominant market share (of over 30%) and become hugely profitable.  Hong Kong is different, because the two main supermarket chains (PnS and Wellcome) already dominate the market, but I suppose extra profit is always welcome. 

From a customer's point of view, there is obviously a concern about privacy and that you are simply making it easier for people to sell more stuff to you, but I have to say that I would choose Tesco over any Hong Kong supermarket every single time.  If PnS could emulate even some of the improvements that Tesco have been able to make over the last ten years, I'd be very happy, and if PnS make higher profits as a result then that's just fine by me.