Hong Kong’s Small Businesses are becoming more Tech Savvy

Hong Kong’s Small Businesses are becoming more Tech Savvy

by March 22, 2018
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Hong Kong small businesses that are investing in technology are enjoying quick returns on their investment, which is leading to the sector topping small businesses from other advanced economies in the adoption of technology.

The findings, from CPA Australia’s ninth annual Asia-Pacific Small Business Survey, follow extensive surveying of nearly 3,000 small business operators in Hong Kong, Mainland China, Malaysia, Vietnam, Indonesia, Singapore, Australia and New Zealand.

CPA Australia Survey

Mr Janssen Chan, Chairperson of CPA Australia’s SME Committee in Greater China 2018 (left) and Mr Gavan Ord, Manager of Business Investment Policy, CPA Australia (light) announced the results from the survey.

Janssen Chan, Chairperson of CPA Australia’s SME Committee in Greater China 2018, said the survey results show that Hong Kong’s small businesses are more proactive in the use of technologies in their businesses compared to other developed markets such as Singapore and Australia.

“Out of 310 respondents from Hong Kong, 53.5 percent earned more than ten percent of their revenue online in the past 12 months and 54.5 percent generated more than ten percent of their sales from new payment technologies such as PayPal, Apple Pay, WeChatPay, and AliPay.

“Given that 48.1 percent of respondents stated that their investment in technology in 2017 has already boosted their profitability, it is easy to see why so many of Hong Kong’s small businesses are choosing technology solutions to help them grow their business,”

Mr. Chan stated.

Overall, the commitment of Hong Kong small businesses to digital technologies is contributing to increased confidence about growth.

“We see 2018 being very positive for Hong Kong’s small businesses, with 61.6 percent expecting to grow — the best result for Hong Kong since 2011,”

Mr. Chan said.

“This builds on a strong 2017, where a record number of Hong Kong small businesses reported growing (65.5 percent), bettering the results from the other developed markets surveyed.”

Recent government announcements on profits tax, innovation and research and development (R&D) should provide further stimulus to the sector.

“With innovation also being a key driver of business growth, the significant public investment in innovation announced in the Budget, and the proposed super tax deduction for eligible R&D expenditure should enhance the innovative culture of many businesses in Hong Kong,”

Mr. Chan stated.

“Further, the proposed cut in the profits tax rate to 8.25 percent for the first HK$2 million in profits earned by a company will be of significant benefit to many Hong Kong SMEs.

“At a time when the sector is facing cost pressures such as high rents, and some are expecting difficult financing conditions, the benefit of the extra cash that will be left in the pockets of many small businesses by the profits tax cut cannot be underestimated,”

Mr. Chan said.

High rents and staffing costs continue to be a major challenge to many Hong Kong small businesses. A focus on cost control and digital technologies are helping to address that challenge.

“Technologies such as online sales can reduce the need for space and having to be in high rent locations. Digital technologies and increasing automation can also free up staff to work on higher value-added activities,”

Mr. Chan stated.

The increasing use of technology in business does come with a downside — making the business more vulnerable to a cyber attack, particularly if the business has not made the appropriate investments in cybersecurity.

“Our results show that Hong Kong’s small business could improve their cybersecurity by having a stronger focus on improving security around access to their systems, including multi-factor authentication before users are allowed onto their system.

“We would also suggest small businesses take a cautious attitude towards the acceptance of cryptocurrencies in payments.

“We are delighted to see Hong Kong small business sector gaining strength. One of the major reasons that Hong Kong’s small businesses are doing much better than competitors from other developed economies is their greater willingness to embrace digital technologies and FinTech.

“The pick-up in growth in the Mainland’s economy and recent policy initiatives by the government should provide a further fillip to this critical sector of the economy,”

Mr. Chan said.

6 Tips for SME in Hong Kong

CPA Australia has suggested six tips for Hong Kong’s small businesses in 2018:

  • Look to take advantage of government incentives that encourage investment in technology and innovation
  • Invest in management training that improves their capability to identify, invest in and apply the most suitable technology for your business
  • Improve staff skills through training and recruitment
  • Continue to focus on cost control without starving your business of investment in key areas
  • Take the time to research new markets for your business
  • Innovation does not have to cost a lot of money — look to incremental innovation through the introduction of new products, processes or services.

 

This article first appeared on prnasia.com

 

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