The Young Reporter – Struggling in the shadow of big companies

BY MARI CHOW, TYR

Young businessmen find their way to survive in this competitive business environment

The enforced closures of many small shops because of surging rents show how difficult it is to maintain, not to mention start, a business in this challenging business environment.

Still it does not mean having a business is a distant dream, as shown by the participants of a TVB programme called “I am Boss”, which provides a platform for prospective businessman to get funding for their businesses.

Mr Zhang Chao and Mr Mak Wing-ho are among the lucky participants who have received HK$200,000 from the programme to carry out their idea of selling typical Yunnan rice noodle by founding Dou Hua Mei Noodles Shop a few months ago.

“Rent in Hong Kong is incredibly high. That’s why we do not open our shop on main streets,” said Mr Zhang.

At HK$33,596 per square foot per year in the fourth quarter last year, the average rent in prime shopping areas of Hong Kong was well above second-placed New York’s HK$25,580. Paris came in third at HK$11,255 per square foot, according to CBRE Group, a US-based commercial real estate company.

Even with a starting fund for their business, the two novice businessmen have found that the most expensive retail market gives them few choices.

The duo have had to open their noodle shop in Sham Shui Po, a working class district.

The small shop on a secondary street only allows Mr Zhang to sell take-away rice-noodle, which, however, manages to attract as many as 20 customers queuing for the food.

“It is worth getting here if the food is good,” said customer Mrs Vicky Ho, who came even late at night to try the shop’s famous rice noodle with tofu.

Besides quality, another key to the success of Mr Zhang and Mr Mak can perhaps be explained by their slogan for the competition: “reasonable ambition”.

With most of their shop’s offering priced around HK$20, they promise to cap their profit at HK$700 every day. Discounts will be offered if the profit exceeds the target, so that more people could enjoy food at lower prices.

It is not easy to find a suitable ground shop and many businesses have to open their shops upstairs.

Mr Danny Ip Shing-fung, 28, chooses the 20th floor of a commercial building in Mong Kok for his shop Selfies, a new kind of photo studio allowing customers to take
photos on their own.

“The environment is pretty good, spacious and decent – and at least the rent is affordable,” said Mr Ip.

The unit is divided into different studios with different themes, allowing customers to enjoy the fun of taking photos with professional cameras within a period of time.

To overcome the problem of location, Mr Ip has to put more effort on advertising as shops in a commercial building tend to have fewer customers than ground shops.

Unlike large firms which can advertise in different news media, Selfies targets teenagers by advertising through social media platforms like Facebook and Instagram, which are browsed by many young people every day.

With the nearly zero cost in advertising, Mr Ip can spare the promotion expenditure for other uses, such as buying costumes and backdrops, which are crucial to attracting customers.

For two customers, for example, they can use any costumes, backdrops or equipment in the room to do the shooting in an hour by paying HK$ 162 per person.

Although the market share and scale of Selfies can hardly be compared with those of the large corporations, Mr Ip believes Selfies has something that the large firms do not have.

“Convenience and a friendly staff are our biggest selling points, “ said Mr Ip, whose employees have built up friendship with customers.

Perhaps Hong Kong’s business environment may be more challenging than in similar cities such as Singapore, where urban planning provides room for the survival of hawkers even in the ritziest districts, allowing people to buy local food at a     reasonable price.

Still the successes of Mr Zhang and Mr Ip have demonstrated a silver lining for that still small businesses could stay afloat in this cut-throat business environment.

“One of the advantages of running a business in Hong Kong is its high population, which means there are always business opportunities everywhere and you can find customers everywhere,” said Mr Ip.

Reported by Mari Chow
Edited by Natalie Leung
<The Young Reporter – Struggling in the shadow of big companies>

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