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HKTDC Export Index 1Q21: Export confidence continues to grow
[21/03/22]
HONG KONG, Mar 22, 2021 - (JCN Newswire) - The HKTDC Export Index rose a further 2.8 points to 39.0 in the first quarter of this year compared with the preceding quarter, the Hong Kong Trade Development Council (HKTDC) announced today. "Although the index has risen for four consecutive quarters, it remains in contractionary territory, suggesting a cautiously optimistic export outlook," said HKTDC Director of Research Nicholas Kwan. "The city's export performance will be affected by several uncertainties such as whether there is a revival in consumer and business confidence, and whether the economic stimulus packages implemented in major economies are effective."
Meanwhile, resurgence of the COVID-19 pandemic (46%) and softening global demand (28.4%) remained local exporters' key concerns, according to the survey.
"As the impact of COVID-19 begins to diminish and business operations gradually return to normal, the Hong Kong economy is expected to regain the momentum for growth," said Mr Kwan.
The survey also found the proportion of exporters who were hard hit by the pandemic dropped significantly, from 56.7% in the previous quarter to 33.1% this quarter. "Reduction in order sizes [53.9%] has been the most common adverse impact but more and more local exporters have experienced challenges brought by the disruptions to logistics and distribution [20.7%, up almost 8 percentage points] such as tight container supply and soaring shipping costs," he added.
Half of exporters go online
To weather COVID-19-related challenges, nearly half of the exporters surveyed planned to develop other product categories (45.7%) or build up online sales channels (45.4%) in 2021. The most popular channels for those going online included proprietary websites/applications/social commerce (77.3%) and third-party e-commerce platforms (64.9%). Some respondents also indicated they used online sourcing platforms (36.1%) or online exhibitions (19.1%).
However, many exporters encountered difficulties when developing online sales, including intense competition in the e-commerce market (56.7%) and ineffective digital market strategies (52.6%), while some were not ready to take small orders (37.6%) or establish long-term relationships with buyers on a virtual basis (32.0%). Other commonly identified issues included potential cybersecurity risks (26.3%) and the need to train e-commerce staff (25.3%).
Mr Kwan said many companies now offer a basket of value-added services as a way to stay competitive in the market. The most common free service offered is product design and development (67.9%), followed by preparing trade documentation (56.6%), logistics arrangement (56.6%), facilitating the attainment of quality-certification or product-testing reports (56.6%), and managing production including outward processing and quality control (52.8%).
All major industries rebound
The HKTDC conducts the Export Index survey every quarter, interviewing 500 local exporters from six major industries including machinery, electronics, jewellery, watches and clocks, toys and clothing, to gauge business confidence in near-term export prospects. The Index indicates an optimistic or pessimistic outlook, with 50 as the dividing line.
HKTDC Economist Samantha Yim said export confidence improved across all major industries. The strongest rebound was in jewellery (42.2) and toys (44.7), which jumped 9.2 and 8.8 points respectively. Among major markets, Hong Kong exporters were relatively more confident in the United States (46.1, up 1.7 points), while Mainland China (48.0) and Japan (47.3) were on par with the last quarter. The outlook for the Association of Southeast Asian Nations (45.2) and the European Union (42.9) was less promising, falling 2 and 1.1 points respectively.
"The improving export sentiment is further evident in an upward trend in the subsidiary indexes including the Trade Value Index [46.3, up 9.8 points] and Employment Index [43.2, up 1.7 points], yet the Procurement Index [33.6, down 1 point] remained subdued, suggesting exporters are worrying orders might drop in the near future," Ms Yim said.
The HKTDC's Research Department also conducted a series of company interviews to explore how technologies have promoted smart-city development and helped local enterprises ride out the COVID-19 challenges.
Retail industry evolves
HKTDC Economist Melissa Ho said the pandemic has accelerated the transformation of the retail industry. Technological solutions such as data analytics, the Internet of Things and sensors have played a pivotal role in enabling more effective retail management and providing better shopping experiences for consumers. Self-services/self-checkout kiosks, "try-before-you-buy" experiences powered by augmented reality (AR) technology, and the use of sensors for consumption-pattern analysis have become the "new normal" in the retail industry.
"Technology improves operational efficiency and enhances shopping experiences. It is important for retailers to keep up with the fast-paced change in customer needs and expectations by enhancing their capabilities and competitiveness through digital enablers," she said.
Navigate COVID-19 opportunities
HKTDC Assistant Principal Economist (Global Research) Louis Chan said local companies upgrade and transform in four key areas amid the pandemic: developing new products, expanding sales channels, innovating marketing solutions and optimising work processes. He said medical and healthcare products as well as tech-related (including 5G, artificial intelligence, and AR) products emerged with the rise of "stay-at-home" economy, while the online-to-offline business model continued to grow with cross-border e-commerce becoming a new focus.
"Content marketing on social media as well as more precise and personalised marketing backed by data analysis will become the new normal. Mobile technology-aided game marketing can help companies win support from the new generation of consumers," said Mr Chan. He noted work optimisation can be achieved by applying various technologies, citing the example that automated systems supported by robots can enhance warehouse efficiency and delivery accuracy. Cloud database, remote and machine learning technology can also help optimise logistics efficiency, improve production management and reduce risks, added Mr Chan.
References
- HKTDC Research website: http://research.hktdc.com/
- HKTDC Export Index 1Q21: Improved Exporter Sentiment in Expectation of Economic Recovery in the Year Ahead https://bit.ly/3qYc853
- Smart City Development: New Retail Experiences https://bit.ly/3eDt1j4
- Smart City Facilitators: Robotising the Food and Beverages Sector https://bit.ly/3eDta66
- Navigating COVID-19 series https://bit.ly/3rTd1NJ
- Photo download: https://bit.ly/314qxSP
About HKTDC
The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via trade publications, research reports and digital news channels. For more information, please visit: www.hktdc.com/aboutus. Follow us on Twitter @hktdc and LinkedIn
Media enquiries
Please contact the HKTDC's Communication and Public Affairs Department:
Beatrice Lam, Tel: +852 2584 4049, Email: beatrice.hy.lam@hktdc.org
Copyright 2021 JCN Newswire. All rights reserved. www.jcnnewswire.com
Meanwhile, resurgence of the COVID-19 pandemic (46%) and softening global demand (28.4%) remained local exporters' key concerns, according to the survey.
"As the impact of COVID-19 begins to diminish and business operations gradually return to normal, the Hong Kong economy is expected to regain the momentum for growth," said Mr Kwan.
The survey also found the proportion of exporters who were hard hit by the pandemic dropped significantly, from 56.7% in the previous quarter to 33.1% this quarter. "Reduction in order sizes [53.9%] has been the most common adverse impact but more and more local exporters have experienced challenges brought by the disruptions to logistics and distribution [20.7%, up almost 8 percentage points] such as tight container supply and soaring shipping costs," he added.
Half of exporters go online
To weather COVID-19-related challenges, nearly half of the exporters surveyed planned to develop other product categories (45.7%) or build up online sales channels (45.4%) in 2021. The most popular channels for those going online included proprietary websites/applications/social commerce (77.3%) and third-party e-commerce platforms (64.9%). Some respondents also indicated they used online sourcing platforms (36.1%) or online exhibitions (19.1%).
However, many exporters encountered difficulties when developing online sales, including intense competition in the e-commerce market (56.7%) and ineffective digital market strategies (52.6%), while some were not ready to take small orders (37.6%) or establish long-term relationships with buyers on a virtual basis (32.0%). Other commonly identified issues included potential cybersecurity risks (26.3%) and the need to train e-commerce staff (25.3%).
Mr Kwan said many companies now offer a basket of value-added services as a way to stay competitive in the market. The most common free service offered is product design and development (67.9%), followed by preparing trade documentation (56.6%), logistics arrangement (56.6%), facilitating the attainment of quality-certification or product-testing reports (56.6%), and managing production including outward processing and quality control (52.8%).
All major industries rebound
The HKTDC conducts the Export Index survey every quarter, interviewing 500 local exporters from six major industries including machinery, electronics, jewellery, watches and clocks, toys and clothing, to gauge business confidence in near-term export prospects. The Index indicates an optimistic or pessimistic outlook, with 50 as the dividing line.
HKTDC Economist Samantha Yim said export confidence improved across all major industries. The strongest rebound was in jewellery (42.2) and toys (44.7), which jumped 9.2 and 8.8 points respectively. Among major markets, Hong Kong exporters were relatively more confident in the United States (46.1, up 1.7 points), while Mainland China (48.0) and Japan (47.3) were on par with the last quarter. The outlook for the Association of Southeast Asian Nations (45.2) and the European Union (42.9) was less promising, falling 2 and 1.1 points respectively.
"The improving export sentiment is further evident in an upward trend in the subsidiary indexes including the Trade Value Index [46.3, up 9.8 points] and Employment Index [43.2, up 1.7 points], yet the Procurement Index [33.6, down 1 point] remained subdued, suggesting exporters are worrying orders might drop in the near future," Ms Yim said.
The HKTDC's Research Department also conducted a series of company interviews to explore how technologies have promoted smart-city development and helped local enterprises ride out the COVID-19 challenges.
Retail industry evolves
HKTDC Economist Melissa Ho said the pandemic has accelerated the transformation of the retail industry. Technological solutions such as data analytics, the Internet of Things and sensors have played a pivotal role in enabling more effective retail management and providing better shopping experiences for consumers. Self-services/self-checkout kiosks, "try-before-you-buy" experiences powered by augmented reality (AR) technology, and the use of sensors for consumption-pattern analysis have become the "new normal" in the retail industry.
"Technology improves operational efficiency and enhances shopping experiences. It is important for retailers to keep up with the fast-paced change in customer needs and expectations by enhancing their capabilities and competitiveness through digital enablers," she said.
Navigate COVID-19 opportunities
HKTDC Assistant Principal Economist (Global Research) Louis Chan said local companies upgrade and transform in four key areas amid the pandemic: developing new products, expanding sales channels, innovating marketing solutions and optimising work processes. He said medical and healthcare products as well as tech-related (including 5G, artificial intelligence, and AR) products emerged with the rise of "stay-at-home" economy, while the online-to-offline business model continued to grow with cross-border e-commerce becoming a new focus.
"Content marketing on social media as well as more precise and personalised marketing backed by data analysis will become the new normal. Mobile technology-aided game marketing can help companies win support from the new generation of consumers," said Mr Chan. He noted work optimisation can be achieved by applying various technologies, citing the example that automated systems supported by robots can enhance warehouse efficiency and delivery accuracy. Cloud database, remote and machine learning technology can also help optimise logistics efficiency, improve production management and reduce risks, added Mr Chan.
References
- HKTDC Research website: http://research.hktdc.com/
- HKTDC Export Index 1Q21: Improved Exporter Sentiment in Expectation of Economic Recovery in the Year Ahead https://bit.ly/3qYc853
- Smart City Development: New Retail Experiences https://bit.ly/3eDt1j4
- Smart City Facilitators: Robotising the Food and Beverages Sector https://bit.ly/3eDta66
- Navigating COVID-19 series https://bit.ly/3rTd1NJ
- Photo download: https://bit.ly/314qxSP
About HKTDC
The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via trade publications, research reports and digital news channels. For more information, please visit: www.hktdc.com/aboutus. Follow us on Twitter @hktdc and LinkedIn
Media enquiries
Please contact the HKTDC's Communication and Public Affairs Department:
Beatrice Lam, Tel: +852 2584 4049, Email: beatrice.hy.lam@hktdc.org
Copyright 2021 JCN Newswire. All rights reserved. www.jcnnewswire.com
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