A match with Norwegian competence and China’s middle income consumers

Recently, a report called ‘China’s Middle Income Consumers’ is published by China-Britain Business Council (http://www.cbbc.org/sectors/micr). Though it is written for UK companies. I believe that it can also be referred by Norweign companies, especially those deal with e-commerce, healthcare, education, leisure and entertainment, and travel and tourism. In fact, these are the sectors where Norwegian companies have stronger competitive advantage.

If you are entering or expanding your busness in China and target China’s middle income consumers, it is better to deveop a market entry or business development strategy as stated in the CBBC report (page 31):

  • Undertake some dedicated and specific market research – consumer trends, perceptions, tastes and preferences.
  • Understand the competition and their relative strengths.
  • Explore entry barriers, regulations, logistics, IP, customs and tax.
  • Visit various locations yourself and spend time learning the market.
  • Segment this target group into focused sub-segments by location, and also by behavior, attitude and lifestyle
  • Focus – target smaller sub-segments, and develop plans on how best to reach them and serve them.
  • Explore various channels to market and business models.
  • Consider working with partners, distributors and agents.
  • Explore China’s e-commerce channels and opportunities
  • Consider specific needs of China’s middle income consumers that need you to alter the product/service offering.
  •  Focus and emphasis product/service differentiators in China – such as quality, novelty, customer services and after-sales.
  • Develop a social media plan, have China specific promotions, discounts and loyalty schemes.

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Proposal: 3 sectors/industries in the Nordic countries should be promoted to Hong Kong

1. Game Industry in the Nordics – Sector of Creative Industries

According to Nordic Council Minister[1], the Nordic creative industries represent one of the largest and fastest growing areas of the total global economy. There is no doubt that the creative industries are already strong sectors but they have an even greater growth potential. Active joint Nordic development and policy work has been set up for the Nordic region to be able to brand itself as a leader in creative industries. Key sectors are games, advertising, architecture, art and antiques, crafts, designer fashion, film, music, the performing arts, publishing, television and radio.

Among the various sectors in Creative Industries, this proposal focuses on the Nordic Game Industry.

PricewaterhouseCooper[2] predicts that global mobile games revenue is forecast to reach US$15bn in 2018, rising at a CAGR of 9.6%. China, Japan and the US are key markets. Rising smartphone ownership is increasing access to mobile games globally and has enabled innovation in gameplay and business models. Asia is the most rapidly expanding part of the world, boasting an 11.8 per cent accumulated annual growth, mainly caused by the huge increase in online games.

[1] www.norden.org/en/about-nordic-co-operation/areas-of-co-operation/creative-industries/about-kreanord-and-nordic-co-operation-for-the-development-of-the-creative-industries

[2] PricewaterhouseCooper, Global entertainment and media outlook 2011–2015 http://www.pwc.com/gx/en/global-entertainment-media-outlook/segment-insights/video-games.jhtml

However, looking at the statistics by HK Trade Development Council[1], the Game sector in Hong Kong has not fully utilized the opportunity and even the export of electronic and video games fell by 30% in 2013. This is due to the fact that video games have faced fierce competition from mobile devices which also have game functions.

[1] HKTDC: http://hong-kong-economy-research.hktdc.com/business-news/article/Hong-Kong-Industry-Profiles/Toy-Industry-in-Hong-Kong/hkip/en/1/1X000000/1X001DGH.htm

To re-capture the growth of Game sector, Hong Kong should promote and invite the Nordic game companies and developers to setup their businesses in Hong Kong. The Nordic computer and video games market is currently the sixth or seventh largest in the world, though per capita sales are approximately the same as Japan, and approaching UK and US levels. Meanwhile, the Nordic game developers are recognised as a global force, having built a net-export industry clearly in the worlds’ top ten in size and sales[1].

In addition, according to Nordic Game Program 2[2], many Nordic games developers have most successfully competed on the world market with innovative and creative products. In the Nordic countries computer games enjoy a rather good position in the debate, culturally and financially, and in relation to films, television and other media. Poorly nuanced and unfounded arguments are unfortunately still not uncommon in other countries. The Nordic region is taking a lead position in ‘games for health’ and the use of games with education, training, rehabilitation and information.

[1] The Nordic Game Facts, by Nordic Council of Minister (2006-2012), http://nordicgameprogram.org/id=30

[2] Nordic Game Program 2, Plan 2012-2015, http://nordicgameprogram.org/?id=30


2. Waste Treatment Industry – Sector of Innovation and Technology

Innovation and Technology sector is a big heading which include sub-sectors but not limited to Energy and Renewable, Food Processing, Healthcare, Biotechnology and Green technology.

Among the various sectors in Innovation and Technology, this proposal focuses on the Waste Treatment Industry under the Energy and Renewable sub-sector.

Looking at the demand side, Hong Kong has an imminent and escalating waste problem. There is urgent need for technologies in waste prevention, reuse, recycling, recovery, treatment and landfills. Up to now, there are no better alternatives than extending the existing landfill sites and hosting a new waste incinerator. Hong Kong’s three landfills are nearing their maximum capacity and will be full in 2015, 2017 and 2019 respectively. Landfills do pose significant environmental risks, including the leaching of toxic chemicals into the groundwater and the release of methane emissions from decomposing trash. Therefore, action must be taken to reduce waste, improve recycling and refine the waste disposal infrastructure[1]. Getting the new waste treatment technologies from the Nordic region could be the long-term solution.

The waste treatment technologies in the Nordic countries are advanced and prominent. It can be divided into five treatment methods: (1) biological treatment, (2) physico-chemical treatment, (3) other treatment operations, (4) treatment operations for energy recovery, and (5) treatment operations for disposal[2]. Especially, methods (2) & (3) could be something that Hong Kong is seeking for. Both methods include a variety of new techniques enabling raw materials reclamation thereby substituting the use of virgin materials, and reducing the need for disposal of waste, e.g. by landfilling, incineration or discharge by sewage.

Matching this Nordic technological supplies with Hong Kong’s demand, it provides opportunities for the Nordic companies to consult and build projects, and supply technology in Hong Kong.

Another selling point to those Nordic companies which see Hong Kong as a gateway to China is that China has resolved to use technological advancement and innovation as a key means to foster economic development during its 12th Five-year Programme (2011-2015). It is also committed to upgrading its industries and to increasing its imports of technology and related items from abroad in order to enhance its competitiveness. Environment protection is one of the seven new strategic industries that China has determined to develop[3].

[1] South China Morning Post, http://bit.ly/1uEg5Lv

[2] Examples of progressive technologies and practices in Nordic Waste Treatment Industries, by Nordic Council of Minister (2012) www.norden.org/en/publications

[3] HKTDC, http://bit.ly/1uJeZhz

3. Sector of Information Communication Technology

The Nordic region is still the frontrunner of global ICT technology. According to the Networked Readiness Index 2014[1] conducted by the World Economic Forum and INSEAD, Finland takes the first place. Sweden and Norway are ranked #3 and #5 respectively, whereas Hong Kong is #8 and China is #62. The Index measures the performance of 148 economies in leveraging information and communications technologies to boost competitiveness and well-being.

[1] Networked Readiness Index 2014, http://global-indices.insead.edu/gitr/

Even Hong Kong is within top 10, there is still space for improvement, including but not limited to cloud computing, mobile broadband, media technology, network securities, software development and ICT for health and well-being. As China is lagging behind, its strategy is to import new generation information technology[1]. Hong Kong is the major exporter of ICT to China. This provides numerous opportunities to the Nordic companies to enter the China market through Hong Kong.

Hong Kong’s ICT infrastructure is already well-facilitated to be leveraged by the Nordic companies for setting up business in Hong Kong. For example, as at February 2014, the number of mobile service subscribers was boosted to 17.22 million, representing one of the highest penetration rates in the world at about 238.6 per cent. Moreover, there were about 2.23 million registered customers using fixed broadband services. Fixed broadband services are currently available at speeds up to 1 000 Mbps (Megabits per second). Internationally, Hong Kong’s fixed broadband penetration rate and average broadband speed are among the highest in the world[2]. These facilitation are also important for Game industry, Finance industry, Logistics, Tourism, Software and Telecommunication industry.

[1] HKTDC, http://bit.ly/1uJeZhz

[2] http://www.gov.hk/en/about/abouthk/factsheets/docs/telecommunications.pdf


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StartmeupHK Venture Programme has drawn 550 entries from entrepreneurs in 47 economies worldwide

StartmeupHK Venture Programme, under Invest Hong Kong, has recently received 550 applicants. They are mainly from HK, US, India, Israel and UK. How about the Nordic entrepreneurs? Are they well-informed of the Programme? Or, they are scared to go overseas?! http://bit.ly/1pxmCpH

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How to do business in Norway

A brief checklist prepared by Visma.com for those who plan to set up business in Norway.

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Welcome to my blog

Welcome to RCBC’s blog.

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