Experience sharing: Hong Kong - a profitable platform for entrepreneurs

1. Experience sharing: Hong Kong - a profitable platform for entrepreneurs Mr. Yu Pang Chun Director & Deputy General Manager Yue Hwa Chinese Products Emporium Limited

2. 1.The importance of the services economy in Hong Kong and the significance of the retail industry to Hong Kong’s economy. • The service sectors generated 86% of Hong Kong’s Gross Domestic Product (GDP) in 2000. Without the public sector, services still accounted for about 74% of GDP • The wholesale, retail and import/export trades, restaurants and hotels was the largest group among the service sectors, contributing for 26.3% of GDP in 2000 • Up to the third quarter of 2002, the total retail sales value of Hong Kong, dropped 24% when comparing with 1997

3. 2. Negative factors affecting retail industry • Unemployment • Deflation (Property value dropped 68%) • Consumers buying in Shenzhen • Lack of consumer confidence

4. Hong Kong Retail Sales 1995-2001

5. Yue Hwa 1.Brief introduction of Yue Hwa’s history. · Established in Hong Kong in 1959, occupied a retail space of 4,000 square feet with 40 staff · Offered best quality Chinese products · Started to own properties for department store operations since the ‘70s · Diversification of business portfolio since the ‘90s · Expanded business abroad since the mid-‘80s

6. 2. Achievements · Grown from a single department store to an extensive network of 14 retail outlets in Hong Kong and a department store in Singapore · Expanded retail outlet space from 4,000 square feet to 250,000 square feet · Owned properties at prominent locations · Diversification of business portfolio since the ‘90s · Successfully diversified business in Hong Kong and developed new businesses overseas 3. Longevity · A true great brand in retail industry, has stood the test-of-time for four decades

7. 4. Market dominance · One of the leading department store groups in Hong Kong, and also one of the major Chinese products department store in the region 5. Goodwill · Wide variety of choices · Product quality · Value for money · Quality customer service · Overall market acceptance · Customer loyalty

8. 6. Successful factors Positioning and market segmentation Successful positioning and segmentation strategies: Business Process· · Immense investments in new technologies for improving business processes · Outsourcing part of business processes · Efficient logistic systems

9. Management · Pursuance of efficiency · Adoption of systems for departmental performance evaluation · Maintenance optimum inventory level · Efficiency in human resources utilization · Efficient procurement systems · Adoption of staff incentive schemes · Providing appropriate staff training at different levels Location · All outlets are located at the prime locations · Efficient space utilization

10. Products · Widest selection of quality Chinese-made goods -- Chinese Medicines -- Chinese delicacies -- Chinese dress (Cheung Sam) · Product quality assured · Quality items produced locally and abroad · Value for money

11. 4. Recent developments · Development of chain of specialty shops · Development of private label product --Chicken essence --Herbal soup --Moon cake

12. Outlook · Hong Kong is still the shoppers’ paradise -- International city, mixture of oriental and western cultural -- Matured retail market -- Variety of choices -- Trends setter · A stepping stone for entering into China market -- Window of worldwide products for people in China

13. Asia’s World City Hong Kong is a Shoppers’ paradise Happy Shopping! Thank You