Hong Kongers are returning to the shops, boosted by the territory’s gradual border reopening and the distribution of consumption vouchers by the governmentⁱ Small and medium-sized enterprises (SMEs) must, however, become nimbler to seize the opportunities as they arise.

Amid changing lifestyles and business practices and with so many different forces in play, here are several suggestions on how SMEs can take to better prepare themselves for the future:

Building Alliances and Leverage on Available Resources

In this new environment of supply chain disruptions made worse by the sudden non-availability of staff due to quarantine or illness, Hong Kong SMEs need to work more closely with like-minded companies, hold more inventories, and broaden their supplier and distribution networks. 

SMEs are working together to reach a larger audience. From Sydney to Beijing and from Mumbai to Tokyo, SMEs are sharing resources in an effort to cut costs and reach out to new customers. For instance, many bookstores and hairdressers share space with café operators to save on rent and cross-sell to each other’s customers. 

During the lockdown, several malls in Singapore had partnered up and allowed customers to combine their online orders so that only one delivery is needed, encouraging increased purchases while reducing cost for businesses. 

SMEs can also work closer with financial partners to improve cash flow and attain greater financial flexibility. For example, users of the American Express^® Gold Business Card enjoy greater financial flexibility since there are no pre-set spending limitsⁱⁱ. SMEs can also use the Card to pay suppliers and enjoy up to 51 credit-free daysⁱⁱⁱ, improving cash flow. In addition, American Express provides Cardmembers with quarterly reports detailing transactions across different categories to better manage their business spending. 
  

Relying on Domestic Consumption for Business Growth 

As a result of the global pandemic, the economy is currently dependent on local spending. In Hong Kong, for example, local tour guides organize trips to city’s peculiar or “instagrammable” spots such as a tour around Chungking Mansions or a hike around notable graves in Hong Kong’s cemeteries to survive the loss of tourism business^iv. For travel buffs, staycations have also become popular as an alternative to travelling abroad. 

While neighbouring countries such as Japan, Singapore and Korea open up their borders fully to travel without quarantine, Hong Kong has also been slowly lifting travel restrictions. This has helped bring in visitors from abroad. Indeed, Hong Kong Tourism Board has earlier announced to give away 500,000 air tickets worth HK$2bn to boost tourism in 2023. Until the tourism industry is fully recovered, businesses should target local consumers to sustain, recover and thrive in the current economic situation. This means to optimize business processes, improve cash flow for operational efficiency and enable business model transformation to sustain growth.  

Adopting New Mindset for Talent Retention 

While the “great resignation” hasn’t affected Asia to the same extent as in the US^v, employee demands and expectations at work are changing and Hong Kong employers need to pay more attention to training and talent retention. 

With digital technologies in place, SMEs are shifting some business processes to the cloud. One area of training that SMEs should prioritize is adopting digital technologies so that employees can work from home or a remote co-working space. A mindset change among employers and employees is also needed in Hong Kong where people are still expected to work physically in the office in many companies^vi.  By adopting the new way of working, it can bring more work flexibility to employees, and at the same time, helps businesses lower business cost and turnover rate. 

For jobs with a higher risk of contacting the COVID-19 virus such as frontline and customer-facing workers, employers should consider improving workplace hygiene, redesigning organizational processes, and increasing medical & renumeration benefits to protect employees. That way, company is better prepared to adapt and respond to workforce disruptions in the event when employees contract coronavirus by accident in the course of their employment.  

Conclusion 

Hong Kong has survived many challenges in the past century and is now one of the world’s largest business and financial centers. Many industries have risen and fallen along the way. As Hong Kong emerges from the pandemic, small business owners need to leverage the strengths of one another, drive domestic consumptions and adopt new transformation to protect employees and businesses. Ultimately, SMEs will have to confront new challenges and demonstrate once again the nimble, entrepreneurial and resilient mindset that its people are known for.