HKTDC pushing for transition to digital-sourcing models

THE Hong Kong Trade Development Council (HKTDC) is pushing traders to transition to digital-sourcing models with its newly upgraded sourcing platform, which was unveiled in the lead-up to this week's Autumn Sourcing Week Online.

"The Covid-19 pandemic has led to the cancellation or rescheduling of approximately 4,000 physical exhibitions around the world1, affecting deals worth an estimated US$296 billion. At the same time, enterprises are seizing the opportunity to challenge conventional ways of working and develop new sourcing and marketing channels," said Benjamin Chau, HKTDC deputy executive director.

We spoke with Mr Chau to find out more about the new platform and understand how enterprises in Hong Kong are transforming.

1. What is the history of cooperation between HKTDC/Hong Kong and SMEs in Asia?

One of our key focuses is naturally the Asean region, which is a growth engine for Asia. Hong Kong has growing economic ties with ASEAN, which is the city's second-largest trading partner and third largest export market. Hong Kong's exports to Asean registered a compound annual growth rate of 7.7 per cent from 2009 to 2019. The progressive implementation of Hong Kong-ASEAN Free Trade Agreement and Investment Agreement will continue to strengthen Hong Kong's connection with Asean economies.

Anticipating immense opportunities in Asean, we at the HKTDC have been strengthening our work in promoting business cooperation between Hong Kong with the region.

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To facilitate the region's business collaboration with Hong Kong and other economies, our colleagues in Hong Kong work closely with our six Asean offices - in Bangkok, Ho Chi Minh City Jakarta, Kuala Lumpur, Manila and Singapore. Besides, we also work closely with eight Hong Kong business associations in Southeast Asia, serving as the secretariat or consultant for most of them. These associations serve as additional platforms for promoting trade between Hong Kong and the region. They have seen growing memberships in the past couple of years.

The COVID-19 pandemic, which hinders person-to-person contact, has drastically changed the global business landscape. To help businesses continue to capture opportunities, we have launched a range of digital initiatives, including online fairs, an upgraded e-marketplace (the hktdc.com Sourcing platform), online conferences, webinars, the T-box programme aimed to help Hong Kong SMEs upgrade and transform, and more. All these feature Asean elements and/or participation.

We are pleased to note that business activities remain buoyant with the aid of digital solutions such as the hktdc.com Sourcing platform. The number of buyers visiting the platform from April to July 2020 increased 20 per cent year-on-year to 4.2 million. We have also seen an increase in the number of visiting buyers from economies with free trade agreements with Hong Kong (such as Indonesia and the Philippines).

In the absence of physical international exhibitions, the platform is especially important in helping SMEs from Hong Kong and Southeast Asia promote and source products and find new business partners. The platform, first launched in 2000, is among our initiatives connecting businesses from Hong Kong and other parts of the world. It has attracted more than 130,000 suppliers and two million buyers to date, facilitating 24 million business connections each year.

2. How does the new solution support trade flows between Southeast Asia and Europe/the Americas?

The prolonged COVID-19 pandemic is driving fundamental changes in the global economic order, putting the spotlight on digital trade. We believe that digital channels will become increasingly important for global marketing and sourcing in the post- COVID "new normal", and we foresee a future where online and offline channels complement each other.

Digitisation has accelerated since the outbreak and will continue to create new business opportunities for enterprises. It can help enhance suppliers' visibility and expand their customer base worldwide, while facilitating buyers' sourcing activities.

The upgraded sourcing platform simply responds to this trend. It efficiently connects suppliers and buyers and from around the world, including those from Southeast Asia and Europe/the Americas. Powered by the cloud computing infrastructure of Google and Amazon Web Services (AWS), the platform offers new functions, enabled by technologies such as AI and machine learning, that make the matching process as efficient as possible.

By incorporating the latest cognitive technologies and design, tit provides a better and more personalised experience for buyers on their sourcing journey through its simple and clean user experience (UX) design. Suppliers can also examine page-performance data from the dashboard at any time, which helps to improve supply chain management and makes it easier to assess marketing effectiveness.

The platform also employs image recognition technology to swiftly provide buyers with keyword suggestions for relevant products, enabling them to find the right products more easily. The new platform also records buyers' preferences and recommends relevant new products to them - it is an agile, scalable, extendable, and secure cloud application platform that is ready to be enhanced and expanded quickly anytime.

To further strengthen buyer confidence in online sourcing, the platform's Third-party Authentication Service allows suppliers to highlight their credibility and product quality. The new supplier authentication system classifies companies' reputation and productivity into Gold, Silver and Bronze categories. A record of companies' participation at HKTDC events and their average enquiry response time are also provided, serving as a reference for buyers as they seek out the most suitable suppliers.

3. Are enterprises in Hong Kong doing anything interesting by way of seizing the opportunity of Covid-19 and accelerate the transformation of the global supply chain?

Many Hong Kong enterprises are taking advantage of the current circumstances to go digital, which is helping to accelerate the transformation of the global supply chain.

Since the COVID-19 outbreak started earlier this year, the HKTDC has held several exhibitions online. These include the Spring Virtual Expo and Summer Virtual Expo which opened on the hktdc.com Sourcing platform in April and July respectively. These online exhibitions earned very positive feedback and effectively helped more than 22,000 suppliers reach global buyers.

For example, during the Spring Virtual Expo, we arranged six online business matching meetings for a Canadian company that was assisting the Ontario government to source personal protective equipment. In addition, we helped local face-mask manufacturers identify 30 overseas suppliers of materials that are essential for mask production.

The latest HKTDC survey shows that Hong Kong companies are adjusting their business strategies to cope with the new normal. Companies are increasingly 'going digital' to expand their online distribution channels (69 per cent), conducting online marketing (56 per cent) to develop new business markets (57 per cent) and accelerating the application of technology in their business (47 per cent).

We recommend companies to digitise their business and supply chain and diversify their markets - especially into Mainland China (with the Guangdong-Hong Kong-Macao Greater Bay Area as springboard) and the Asean region.

To help them achieve these, the HKTDC has mapped out a series of initiatives. These include online exhibitions, the upgraded e-marketplace, virtual and hybrid conferences, international webinars and virtual business missions.