The Death of Hong Kong's F&B? Death by Lack of Differentiation

The four-day Easter holiday in Hong Kong has come to an end, and the market is quiet. According to news reports, many restaurants couldn't fill their tables for the day, as it seemed like all the citizens had left Hong Kong to spend money elsewhere.

The new normal after the pandemic is that Hong Kong people go on long vacations to Japan and Thailand, and short vacations to the Greater Bay Area. They earn money in Hong Kong and spend it elsewhere. This trend of rational consumption is driven by the high cost-effectiveness and good service in these destinations.

Putting aside macro factors such as the strength of the Hong Kong dollar and changes in the overall environment, the main reason for the decline in business for small shops in Hong Kong is actually their own laziness.

For a long time, doing business in Hong Kong was like "counting money while sleeping." With a large influx of independent travelers into Hong Kong, businesses like jewelry shops, restaurants, and pharmacies were in high demand. With such a huge flow of people, as long as the owners maintained basic product quality and service, there was no motivation for them to innovate and enhance competitiveness.

There are generally two ways for brands or businesses to compete. The first is to compete on price, emphasizing affordability and value for money. However, in the new normal, this approach is not realistic. After all, when faced with high rent and labor costs in Hong Kong, which are several times higher than in Shenzhen, it's better for business owners to close their doors and retire rather than sacrifice profits to compete on price.

Therefore, the way out for businesses in Hong Kong can only be through differentiation.

Establishing long-term differentiation for a business is the work of our brand consultants. From the superficial level of symbolic systems, including logos, colors, decor, and scents, we help clients reduce memory costs. Then, we focus on behavioral systems, which include product features, employee service training, and the tone of advertising and communication, to help businesses attract new customers and retain existing ones. Finally, we delve into the deepest level of ideological systems, which include a company's vision, mission, values, and personality, etc.

A brand is a brand because it can focus on and repeatedly emphasize its differentiation. When the unique features of a business are recognized and accepted by a majority of people, it becomes a brand. This is a long-term endeavor, and many business owners may lose their original intent due to market disruptions, causing the carefully established differentiation to become blurred. Therefore, the ideological system is crucial for managing a long-lasting business.

However, many small businesses in Hong Kong, especially in the food and beverage industry, are facing an existential crisis. The owners usually seek simple, quick strategies to "make ends meet." Here are a few suggestions for the food and beverage industry in Hong Kong:

1.Identify your most unique products: In Hong Kong's food and beverage industry, especially in cha chaan teng (Hong Kong-style cafes), there are often dozens or even hundreds of dishes on the menu. The advantage is having a wide selection, but the downside is a lack of memorable points. In the era of social media and "check-in" culture, why would people go out of their way to support your business? It might be for a signature item that has become a must-try, such as the French-style egg tarts from BakeHouse, the black pork char siu from Mott 32, or the pork chop rice from Angus Café.

2. Use signature items to attract attention: A restaurant's signature item doesn't necessarily have to be the highest-quality or most profitable dish. Its role should be to grab attention and even have a unique element worth sharing on social media. For example, the "mountain of minced meat" from Tai Hang Lei Yuen Ice House is essentially a plate of minced meat rice. However, they have added a distinctive visual element and attracted customers, thereby boosting the sales of other food and beverages. This is an example of a successful "attention-grabbing" signature item.

3. Focus on promoting signature items: Even if you have a unique product, the food and beverage industry needs to start paying attention to promotion, rather than relying solely on word-of-mouth. Hire a young employee to manage your social media presence! From Instagram to Xiaohongshu (Little Red Book), focus on promoting your signature items, repeatedly emphasizing their selling points. You can also invest a little money to collaborate with key opinion consumers (KOCs) to promote your business. This is the most practical marketing approach.

In summary, when business is poor, finding a way out and highlighting the uniqueness of the brand is a long-term strategy. However, it is unfortunate for brand consultants when business owners are unwilling to invest in such "marketing" services during tough times.