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Hong Kong (S.A.R.), China

As an international city and a global trade hub, a plethora of brands, businesses and retailers are all vying for consumers’ attention in Hong Kong.

With such an abundance of choice comes an urgent need for brands to offer something distinctive and authentic that resonates with consumers. This is no easy feat given high customer expectations for quality and service. To compete, brands are looking at ways to customize their offerings and develop unique and exclusive experiences for their most valuable customer segments. This trend is reflected in our research, which shows Personalization to be the most important pillar in driving brand loyalty. The pillar of Expectations was also found to be important for driving loyalty and, along with Integrity, was a major driver for brand advocacy.

In last year’s report we found that customers expected a consistent experience across channels. In this year’s report, survey respondents echoed this sentiment. While many brands in Hong Kong are paying attention to harmony between online and offline channels, we’re seeing a wider recognition of the need for consistency across the entire brand ecosystem, including partnerships and alliances.

Ensuring efficient and effortless customer interactions continues to be a challenge for the Hong Kong market, particularly for the financial services sector, which performed below market average in the pillar of Time & Effort. One survey respondent describes a particularly unpleasant experience while applying for a credit card: “when I applied for a credit card for my loved ones, the staff weren’t helpful and made me go to another branch. I felt that the two parts of the same bank were completely disconnected.” The findings suggest that while many brands promote a customer-centric approach, few adequately consider how front, middle and back office operations are aligned to support the customer.

"By investing in initiatives to understand and engage customers, global brands in Hong Kong are delivering locally relevant experiences with great success. At the same time, disruptive brands are now making an appearance in the hall of fame – a reminder that brands need to continually push themselves if they want to stay ahead."

Isabel Zisselsberger
Head of Customer & Operations Hong Kong,
KPMG in China

A theme uniting some of the city’s highest-performing brands is their desire to truly understand the customer. The Hong Kong survey findings show that investing in technologies and platforms to collect, analyze and act on data and insights is a top priority for brands. Despite this, our research suggests that most organizations do not share data across their business; nor do they use it to champion behavior that will benefit the customer and drive business outcomes.

The research also shows that brands that use data and analytics to inform experience design and drive customercentric decision-making are finding success across The Six Pillars. This is exemplified by one of the city’s highest-ranking brands - Singapore Airlines – which scored highly across all pillars.

The pillar of Integrity is also fundamental for brands in Hong Kong, and indeed is one of the biggest drivers of advocacy. Our research reveals that consumer trust and confidence is quite thin, particularly when it comes to data handling; customers are conscious about how their data is treated and the way in which businesses address these concerns, a theme which is mirrored globally. As such, brands that can demonstrate some awareness of these fears – and address them directly – tend to perform better amongst consumers.

Of course, there are many factors that impact an organization’s Integrity, and organizations can also show Integrity in different ways. For example, successful Hong Kong start-up On The List has devised a sustainable way for luxury fashion retailers to dispense with old stock (rather than having them sent to landfills) by holding special flash sales for its members. In addition, the company works closely with organizations that benefit the local community, and has partnered with charities that are aligned to their core customer segment.

However, perhaps the greatest challenge for Hong Kong is the speed with which its customers’ behaviors are evolving. These are influenced by generational shifts as well as the increasing connectivity with mainland China, accelerated through initiatives such as the Guangdong-Hong Kong- Macao Greater Bay Area.

Research shows that millennials and generation Z consumers spend increasingly large amounts of their spare time online – 2-3 hours per day on average26. But it’s not just younger consumers that use online platforms. Enhanced accessibility has altered the behavior profile of consumers across generations, and brands are having to pay closer attention to new channels and be flexible and responsive to how customers choose to use them.

Start-ups have the advantage of being able to build their businesses around these considerations, designing experiences that are digitally optimized and truly connected. For example, Lalamove, a Hong Kong-based logistics start-up with ‘unicorn’ status, provides live updates to customers allowing them to track the status of their goods in real time. This addresses a key logistics pain point – poor delivery tracking during the ‘last mile’ – and is likely to have contributed to Lalamove’s exceptional performance in the pillars of Expectations and Empathy.

Conversely, a challenge for more well-established companies is how to re-invent themselves in order to remain relevant, as customers’ behaviors evolve at a pace never seen before. Meanwhile, implementing the necessary changes takes time. The brands that make CX a strategic priority, at the highest levels of their organization, will have the alignment and support needed to make the necessary operational changes to deliver outstanding customer propositions.

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Leading CX brands in Hong Kong (S.A.R.), China

Apple

Chanel

Dior

Emirates

InterContinental Hotels & Resorts

Lalamove

Louis Vuitton

Marriott Hotels

Shangri-La Hotels and Resorts

Singapore Airlines