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SCED's speech at 25th anniversary celebration dinner of Hong Kong Retail Management Association (English only)
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     Following is a speech by the Secretary for Commerce and Economic Development, Mrs Rita Lau, at the 25th anniversary celebration dinner of the Hong Kong Retail Management Association tonight (September 22):

Ms (Caroline) Mak, distinguished guests, ladies and gentlemen,

     It is a great pleasure to join you this evening.

     I congratulate the Hong Kong Retail Management Association on its silver jubilee.  Over the past 25 years, the Association has consistently striven to raise the standard of our retail sector.  Today, Hong Kong enjoys the hard-earned, and well-earned, reputation as a :shoppers・ paradise;.

Close connection between CEDB and the retail sector

     The post of Secretary for Commerce and Economic Development comes with many different hats, and I am wearing several of them today.  My bureau is responsible for consumer protection, intellectual property protection, tourism development, as well as supporting industry and business.  All these are very relevant to the retail sector.

     My talk this evening will focus on three issues: the importance of the retail sector to Hong Kong; the secret of our success, and where we go from here.   

How important is the retail sector to Hong Kong?

     Back in 1983, when the Retail Management Association was born, manufacturing accounted for some 20% of our economy. Today, services account for more than 90% of our GDP.  The retail sector is an integral part of our service-oriented economy.  There are now about 58,000 establishments in the retail sector, employing almost one-in-10 of our workforce.

     The retail sector is also the backbone of Hong Kong・s status as a premier tourist destination. Even China・s Olympic gold medallists caused a splash in the media with their recent shopping excursions in the city.  Last year, Hong Kong attracted more than 28 million visitors, four times the size of our population.  Tourists spent over $61 billion on shopping, an increase of almost 27% compared to 2006.

     According to the Tourism Board・s Departing Visitor Survey, over 80% of our overnight visitors rank shopping as their favourite activity in Hong Kong.  Your professional management has been essential in giving our tourists the shopping experience they expect and deserve.  

Secret of our success

     How did we earn ourselves the catchy reputation as a :shoppers・ paradise;?

     My answer is that it is because our retailers are able to give shoppers the best price, plenty of choice, as well as a reliable and friendly service.

Business-Friendly Environment

     The Government has been working hard to maintain our business-friendly reputation and status as the freest economy in the world.  That is the best way to encourage entrepreneurship and create opportunities for our retailers.

     Hong Kong has been ranked number one in the world for economic freedom for more than a decade in two separate international studies, one by the Heritage Foundation and the other by the Fraser Institute.  We believe that maintaining a low and simple tax regime, freely convertible currency and a free flow of ideas and information is the best way to stimulate growth.

     Take wine business as an example.  In the Budget this February, the Financial Secretary announced new measures to develop Hong Kong into a wine trading and distribution hub in Asia.  Within one day, duties on wine were reduced from 40% to zero, making Hong Kong the first free port for wine among major economies.  In a further development last month, I signed a Memorandum of Understanding with the French Government on Co-operation in Wine-related Businesses.  We are delighted to hear from the industry that sales in specialist wine stores are developing well, and supermarket chains will be another fast growing market.  Wine-related companies in the retail, storage and logistics sectors are setting up offices or expanding their operations, creating jobs and wealth for Hong Kong.  

     This shows how we encourage enterprise through small government and low, stable and predictable taxes. The rest is up to the business sector.  And I am sure our retailers will not lag behind in seizing these new opportunities.  

Customer Service

     Government encouragement aside, the key to our success is your excellent service to your clients.  Here in Hong Kong, :customer service is king.;  

     The retail sector has given much attention to training and promoting excellence in customer service.  I commend the Retail Management Association on its work in setting the highest customer service standards for our retail industry.  The renowned Mystery Shoppers Programme has been a great success since its launch in 1996.  The Hong Kong Tourism Board also runs the Quality Tourism Services Scheme that recognises hospitable retailers with excellent customer service records.

Where do we go from here?

     This brings me to the last of the three issues I mentioned at the beginning of my talk - Where do we go from here?  I see three major areas of development.

     First, the Mainland market.  Hong Kong has a reputation for quality, service and reliability in the Mainland.  We speak the same language and understand each other・s way of doing business.  Mainlanders flock to our shops for jewellery items, Chinese and Western medicine and dried seafood.  We also have CEPA, which is a unique free trade pact which gives Hong Kong companies, including retailers, first-mover advantage in the huge Mainland market.  I am sure many of you here are the pioneers, setting up retail outlets in different cities.  The huge Mainland market has more than enormous potential awaiting your exploration.

     Second, online shopping.  A recent report by a credit card company predicts that online shopping sales in the Asia Pacific region will grow at an annual rate of more than 23%, reaching US$168 billion by 2011.  The report also predicts that China will overtake Japan and South Korea to be the largest online shopping market by 2010.  Again, this represents ample opportunities for our retail sector.

     But, on the flip side of the coin, online shopping also brings greater challenges in areas such as security and intellectual property protection.   We have made good progress in tackling counterfeiting in recent years.  But we will have to work doubly hard as the trend of online retailing gathers pace.  Undoubtedly there will also be intense international competition in tapping into this market.

    Third, new shopping experiences.  Hong Kong is also facing stiffer regional competition in terms of offering a modern shopping experience to tourists.  We already have world-class shopping malls and department stores housing luxury brand boutiques.  Our prime shopping areas such as Central, Causeway Bay, Mong Kok and Tsim Sha Tsui are highly recommended in guidebooks.  But other cities in the region are replicating this model with some success.  New and prestigious shopping malls are going up in Beijing, Shanghai, Shenzhen and Macao.

     I note that during the Beijing Olympics, 43 traditional shops along Qianmen Dajie ]ej挙^ in Beijing opened their doors to customers.  They caught the eye of all because of their restored fa?ades and distinctive character.  Blending the shopping experience with heritage and culture is a model that also suits Hong Kong. Ngong Ping Village has incorporated these elements.  Visitors to Ngong Ping enjoy an :old Hong Kong; shopping experience, including a beautifully landscaped teahouse and shops selling Chinese-style souvenirs.

     No doubt there will be other new shopping models and it is up to you, leaders of the retail sector, to discover and develop.

Conclusion

     Ladies and gentlemen, the retail environment in Hong Kong remains sound.  There are abundant new business opportunities ahead, and I urge you all to explore them.

     I am grateful to the Hong Kong Retail Management Association for its work over the past 25 years in nurturing our strengths as a :shoppers・ paradise;.  Again, I congratulate you on your silver jubilee and I wish all of you every success in the future.


     Thank you very much and have a wonderful evening.

Ends/Monday, September 22, 2008
Issued at HKT 21:30

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