31 Oct 2010, along Peking Road in Tsim Sha Tsui shopping and tourist district in Hong Kong, a typical weekend shopping crowd

Hong Kong has long been a prime destination for keen-eyed shoppers of high-quality, low-priced consumer electronics. But aside from competitive pricing, what else can brands do to differentiate themselves from their competitors, attract returning customers and create top-of-brand-awareness? According to a recent study conducted by global loyalty marketing agency ICLP, consumer electronic brands in Hong Kong deliver in terms of quality and efficacy of products, allowing them to win the trust of consumers. However, Hong Kong shoppers find their favourite electronic brands trail their counterparts in mainland China when it comes to communication and offering tailor-made rewards, which are vital for customer loyalty.

“Fostering a loyal relationship with customers goes beyond providing good products. To maintain competitiveness, electronic brands in Hong Kong have to put more emphasis on communicating the latest products and trends specific and relevant to a customer’s preferences, responding to them instantly and rewarding them with special and exclusive events and offers,” comments Mary English, Executive Vice President – APAC at ICLP.
Hong Kong consumers believe that electronics brands perform well in the delivery of quality and efficacy, which helps win their trust. Brands also do well in the area of reliability such as providing an after-sales service and product guarantee. Nearly half of Hong Kong consumers (47%) trust the quality and efficacy of the brands’ products. Half say that they can rely on the brands to take care of an issue with a product. However, brands have room for improvement in terms of communication and rewards if they are to build long-term relationships with customers, according to the ICLP study.

The study also revealed that 51% of mainland Chinese shoppers expect to grow and improve their relationship with brands as they learn more about each other compared with only 27% of shoppers in Hong Kong. The higher expectations of developing a long-term relationship with brands are reflected in the levels of reciprocity in the survey findings: close to 40% shoppers in mainland China feel that they are appreciated as regular customers by their favourite brands (versus only 27% in Hong Kong) and 36% report receiving rewards from brands in return for sharing their personal information.

Mary English commented, “These findings reveal that consumers, whether in Hong Kong or mainland China, expect more from consumer electronics brands than they are currently delivering. Brands in Hong Kong need to focus on communicating with their customers; in particular, actively listening and responding to them in real time on social media, which is becoming increasingly crucial to tap into digitally savvy consumers.

While many loyalty programmes stick with only traditional forms of communication such as SMS or email, social media broadens a brand’s reach in providing consumers updates on products and trends and is recommended for use with associated social data analytics that allows brands to understand their customers’ behaviour. It also provides the opportunity to identify key opinion leaders (KOLs) to represent the brand. Meanwhile, in view of the competitive pricing of this sector, rewarding shoppers with special offers and exclusive experiences is becoming important for attracting and retaining their custom.

Brands in mainland China, on the other hand, are performing better in terms of communication and rewards, which can be explained by the popularity of WeChat and Weibo and online customer servicing. It is also not uncommon for brands in the mainland to offer a wider choice of gifts and personalised offers to reward shoppers for their purchase, instead of providing a standard premium for customers as brands in Hong Kong do. However, brands in the mainland need to beware of the lower trust placed in product quality and efficacy compared with Hong Kong and make efforts to improve consumer perception of product reliability by taking responsibility when there are issues.

Consumer electronic brands in Hong Kong are not losing their lustre, but they do need to be more active in creating emotional connections through an engaging loyalty programme in order to build stronger relationships with their customers.”