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Wong Yik Sun ran two small bookstores specializing in secondary school textbooks in Hong Kong. One day, when taking pains searching for a specific book, he came up with an idea of opening an online bookstore, so as to help people find books more easily.
The idea of opening up online bookstores is nothing new. But what is significant is how the idea drives the profit and changes his business model. In just three years, Wong decided to shut down his decade-long brick-and-mortar bookstores and go entirely online. The books he sell have also changed from local school textbooks to a wide range of leisure-reading books imported from Taiwan.
Screen Grab of Wong's online bookstore "2-Floor Bookstore".
As overhead costs for online business are lower, Wong said he sells books 15% less than the average price in bookstores. He also spoke highly of online marketing, saying that around half of the sales come from first-time customers who find his e-commerce site through Web search engines.
Wong’s company is just an epitome of many Small and Medium Enterprises (SMEs) in Hong Kong that evolve from offline to online business or make use of the Internet to drive brick-and-mortar business. According to a survey of 500 SMEs in Hong Kong conducted by Boston Consulting Group (BCG) in 2011, around 78% of companies used the Web to do business, among which 58% belong to the "high-Web" business. How does the Internet, in particular, social media and search-engines, transform the way businesses work? What strategies small enterprises can employ to achieve least costs and maximum profits?
**Borderless Business **
Internet is often said to make the world a global village. In the business world, it also helps companies reach customers in every corner of the earth.
Fung's family company Sanwa Pearl & Gems is a wholesaler specializing in synthetic gems and pearl, with targeted customers mainly scattering in North America. After joining his father's company, Fung started online advertising campaigns through search engines and YouTube video site.
"I explained to my father, our online product showroom is like a salesperson working 24 hours a day, and Google AdWords is like the airplane, sending the salesman around the world," Fung said.
Thanks to online marketing, Fung is now able to expand his business overseas, diversifying into new markets like Europe, Russia, and Saudi Arabia. This year he has ceased all forms of traditional offline advertising, as Internet marketing is more effective in judging consumer demand.
"Before Internet came into being, it is extremely difficult for small and medium enterprises to find overseas customers as the cost is too high," said Shirley Yuen, CEO of the Hong Kong General Chamber of Commerce. "Internet has helped companies completely get rid of that constraint."
In a survey conducted by BCG on why and how SMEs have embraced the Internet in Hong Kong, over half of the respondents cited expanding their business to include international customers as the main benefit.
"Making good use of the Internet can harness great potential and help small and medium enterprises to grow into big companies," said Tony Tsoi, CEO of Varitronix, a leading LCD manufacturer that grow from a group of academics to a listed company with over 4,000 staff.
**Better Interaction **
Other than expanding overseas business, Internet also offers a platform for better communication and interaction between business owners and consumers, as well as among customers themselves.
Mary Gadams is the founder of "RacingThePlanet", a company that stages and organizes foot races across four major deserts across the globe. As one of the four winners in the "Hong Kong SEe Heros Challenges" Contest, she said her business would not be possible without the Web.
Mary Gadams (second right) and other winners of the "Hong Kong SEe Heros Challenges" Contest pose for a photo after winners of the contest are announced (APD/Pan Jie).
"We planned the racing routes using Google Earth and finds local partners and vendors to accommodate the racers via web search," she said. She also set up an online store selling outdoor gears as well as a website in seven languages serving consumers in over 70 countries.
More importantly, the website is not just about providing information on races organized by the company, but a platform for customers to interact with each other and share their adventure experience.
Her company has set up "Cybertents" on its official company website, where racers can update their progress in real time during the journey. Participants can also upload videos of themselves on a dedicated YouTube channel, which allows newcomers to view those videos and have a more clear idea of the journey.
Tattoo Temple Studio is also a winner of "Hong Kong SEe Heros Challenges" Contest. Chris Anderson, a staff working in the tattoo art studio, also agreed with Gadams that the company website serves multiple purposes, including both showcasing finished tattoo work and providing a personalized concierge service, as customers are allowed to directly communicate with artists on their desired tattoo design on the company website.
As mobile-based Internet era comes in sight, Anderson’ company has developed a smart phone app, featuring interactive portfolios, news, educational articles and lifestyle advice along with their tattoo service.
With digital marketing, website and mobile app, he said the studio has achieved 300% growth in revenue over the past 18-24 months.
"In the Internet world, there is no distinction between big and small enterprises," said Gerry Ma, chairman of customer liaison group for SMEs of Trade and Industry Department. "Small enterprises can just achieve the same kind of marketing purpose through the internet as big enterprises do."
