Partner Content
This content was paid for and produced by BRAND HONG KONG in partnership with the Commercial Department of the Financial Times.

Hong Kong is moving ahead with technology, innovation and resilience to ensure the city continues to respond well to future public health crises.

When company executives ask Stephen Weatherseed what they can do to prepare for Hong Kong’s “new normal” – the post-Covid-19 pandemic economy – he relies on navigational tools to help them steer through. As managing director of the Hong Kong office of Mazars – an international accounting firm that has launched a global programme called “Reshape” to advise businesses on the new normal – Mr Weatherseed believes each company can be evaluated using statistical models.

“Hong Kong companies can navigate the post-pandemic future by examining positioning, operational business impact and applying scenario planning and financial forecasting,” he said. “What we don’t know is when we will come out of this and what [post-pandemic] demand will look like.”

For its Hong Kong clients, Mazars applies Reshape’s sensitivity analysis – a financial model that determines outcomes based on different projected variables. “We look at, say, sales over the past month and make some assumptions about sales going forward,” he said. Hong Kong property, he noted, “is a significant expense”. “With a retailer we would look at the outcomes of discussions with landlords about reducing rent, or if a client has a brand, talking to distributors about terminating an agreement or buying out that distributor.”

While the new normal might mean the economy can still thrive, experts believe public health will be in the spotlight as never before. “In the health sector, issues to be reviewed will include meeting the need for critical supplies, the challenges of border control and social distancing, how to sustain the operational requirements for surveillance, quarantine, contact tracing, testing and so on,” said Keiji Fukuda, director of the Division of Community Medicine and Public Health Practice at the University of Hong Kong School of Public Health.

Covid-19 business resilience study 2020

Maintaining resilience during and after the pandemic

A recent study of Hong Kong’s multinational-business community found that a well structured crisis management plan helped executives navigate the pandemic while working from home and digital collaboration tools are set to become mainstream for business in the ‘new normal’.

Click Here To Download The Full Length Report (PDF)

Successful crisis management

Respondents cited a crisis-management plan as an essential tool in the fight against the pandemic, helping limit the impact on revenue, productivity and headcount.

Study Methodology
This study, conducted by the commercial insight division of the Financial Times, draws on an online survey of 103 business executives from Hong Kong multinational enterprises.
The rise of e-commerce

One major adjustment that is already with us is an even more pronounced reliance on e-commerce. Websites such as HKTV mall saw orders surge from 12,300 a day to 32,600 a day during the pandemic, while online fashion retailer Zalora witnessed a 200 per cent rise in new customers signing up.

A new role for ‘Brick and Mortar’? Hong Kong ’s retail sector has rapidly embraced digital tools and e-commerce as more consumers are opting for online shopping during the pandemic.

The company set up a Covid-19 Dashboard to help brands better understand the effects of the pandemic in real time, enabling them to quickly adjust inventory. “With this dashboard, brands can gain insights into changing shopping behaviour pre- and post-pandemic by age, group, category, price points and discount propensity,” said Ms Soni. For example, she said, “Sports and wellness, loungewear, beauty and kids’ categories have grown by 70-100 per cent as people continue to stay home due to social distancing measures”.

With increased orders, Zalora anticipated increased customer enquiries, so they rolled out customer service chatbots. In the future, according to Ms Soni, Hong Kong can expect more advanced forms of automation designed to bridge the gap between offline and online retail. “Augmented reality and virtual reality will become the norm in helping customers make better purchasing decisions online,” she said. “Retailers will need to be ready to adapt and respond to these evolving trends and demands.”

Mr Weatherseed agrees that some adjustment will be permanent. “Our business models will change – and in fact they already have changed,” he said. “We won’t be leaping on planes as quickly as before because the idea of face-to-face meetings is not considered as important – even in Asia.”

While the hospitality industry will suffer knock-on effects – to airlines, hotels and convention venues, for example – Mr Weatherseed expects Hong Kong to show resilience.

“Hong Kong is pretty good at dealing with economic shocks, whether it’s a global financial crisis or local crises,” he said, noting that while the openness of Hong Kong’s economy makes it sensitive to downturns in trade and investment flows, it has an ability to rebound quickly once conditions change, as they did post-Sars in 2003 and after the global financial crisis in 2008. “It adjusts pretty rapidly to any new normal,” he said.