Abstract:

Hong Kong business market is facing a tough situation owing to COVID-19 outbreak, social unrest, China-US trade tensions, global financial recession, and political uncertainty. The retail sales are expected to shrink 19.7%, approximately HKD 346 billion, for the full year of 2020 (PricewaterhouseCoopers, 2020). According to the statistics released by Census and Statistics Department (2020), the value of total retail sales for the first six months of 2020 dropped by 24.8% compared with the same period of last year. The sales of medicines and cosmetics had the most significant drop of 57.4% and followed by jewellery and luxury goods (-56.5%), books, newspapers, stationery and gifts (-41.3%), footwear and clothing accessories (-39.7%), wearing apparel (-38.8%), as well as food, tobacco, and alcoholic drinks (-13.%). However, there are segments showing resilience. The sales of commodities in supermarkets (+4.5%), fuels (+8.4%), and furniture and fixtures (+0.3%) recorded a slight increase in the same period.
Although the market was disrupted, new consumption behaviours and supply chain practice evolved that open up new opportunities and plans for food retailers. Consumers shifted their shopping practice from brick-and-mortar stores to online shops (PricewaterhouseCoopers, 2020). They have more expectations on the purchase experiences than before, and this change will become permanent. Also, the supply chain has been reconfigured to apply dual or multiple channels in response to the supply chain disruption. Some manufacturers and retailers also integrate the C2M (customer to manufacturer) model into physical channels to meet customer demands. Online and social channels are used to facilitate transactions with ultimate customers.