The association has a mission to make life in the trading world better, especially across the border For two decades, the force and voice behind the retail industry has been the Hong Kong Retail Management Association (HKRMA). The retail industry is Hong Kong's second-largest service sector, accounting for 26 per cent of the gross domestic product. Considering that Hong Kong has a service-based economy (the service sector accounts for 85.7 per cent of GDP), it makes sense to assume that the retail industry's state of health is a fair reflection of the health of the economy. 'In all these years, we have played an important role in promoting Hong Kong's retail industry,' says Yu Pang-chun, chairman of the association and director and deputy general manager of Yue Hwa Chinese Products Emporium. 'Twenty years later, we are still continuing this mission.' Established in 1983, the association has grown to include more than 500 members, covering more than 5,000 retail outlets and employing two-thirds of Hong Kong's retail workforce. It covers various types of retail businesses, including department stores, supermarkets, convenience stores, drug stores, food, fashion and accessories, and speciality stores. Mr Yu says the HKRMA began life under the auspices of the Hong Kong Management Association (HKMA). 'We were one of their specialist groups.' In 1993, the HKRMA split from the HKMA and incorporated itself. 'We wanted more focus on the industry while improving the profile of the association,' he says. Mr Yu's two-year term as the HKRMA's seventh chairman is supported by 26 other executive committee members. Philip Ma King-huen, group managing director of The Sincere Co, acts as the immediate past chairman and honorary adviser, and Anita Bagaman is the HKRMA's executive director. The association also has four subcommittees for government regulations and strategic direction, education and training, raising funds and organising the annual ball. Several working groups operate under these bodies. The HKRMA is part of a larger federation of similar associations in 14 Asia-Pacific countries. Called the Federation of Asian Retailers Associations, its members include similar associations in Australia, Brunei, China, Fiji, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand. 'This gives the HKRMA a broader reach and knowledge about the retail landscape in this part of the world,' Mr Yu says. With its incorporation, the HKRMA took a three-pronged approach in its representation of the retail industry. 'Our mission was to present a unified voice on retail issues, to exchange information on common issues, and to raise the professionalism and standards of the HKRMA through education and training,' Mr Yu says. 'We also felt we needed a higher profile, and that it was easier if we did it on our own rather than under the HKMA umbrella.' Well aware that retail is not an isolated industry, the association has expanded its ranks to include non-voting members. 'These are non-retailers who have an interest in retailing, or are suppliers, or have a vested interest in the industry,' Mr Yu says. The HKRMA has raised the bar of professionalism by requiring that every member sign a pledge to support a code of practice to maintain best practices and regulations. To enhance its profile, the HKRMA planned the first functional constituency for retail and wholesale in 1995. 'We invited [Legco councillor] Selena Chow to run for the post. She won, and has been our representative since,' he says, adding that this was an important milestone for the HKRMA. 'We were seen to increase the importance of the retail industry in Hong Kong. Having a key Legco representative is important to the industry,' he adds. Meanwhile, the HKMRA has been closely involved with the evolution of the Closer Economic Partnership Arrangement (Cepa). 'When the government did consulting on Cepa, we were one of the active bodies on it. We gave the government our wish list, and we are very happy to note that we are one of the industries covered under Cepa,' Mr Yu says. He says entry requirements for Hong Kong investors to set up a wholesale-retail commercial enterprise in China have been lowered. 'There are many trade barriers when you do business in China, and the requirements are very high, but with Cepa the trade barriers have been lowered substantially,' Mr Yu says. 'Now more local companies can qualify where only retail giants from the US used to qualify.' But he believes there is still room for improvement. One area that needs more work is licensing. Mr Yu says there should be only one licence required to operate in the whole country, and not one licence for every city. Retailers should also be able to sell different products on one licence rather than having to get a separate licence for each product type. Mr Yu also believes banking and currency issues must be resolved. 'It is important that you can transfer money out of China,' he says. 'Moreover, there are strict requirements. You have to open a banking account in every location you operate. The retailer ends up with so many bank accounts that are not interlinked. This is trouble in terms of accounting. Our priority is to set the right environment for retailing.' Although the HKRMA works with the government on many retail issues, one key area of debate concerns the goods and services tax (GST). 'We are definitely against having GST in Hong Kong,' Mr Yu says. 'We do not feel it is the right time now, or any time in the future. 'The retail industry in Hong Kong has been very weak since the 1997 financial crisis. Sars was a big blow to the retail market this year, and we believe the GST will be a further blow to a market that is fragile, and where consumer sentiment is so weak.' The HKRMA sees the future in retailing in education. 'Besides the competitions and the awards, we have to measure service excellence. We are putting a lot of effort into professional training,' Mr Yu says. The HKRMA has collaborated with the Retail Trade Training Centre of the Vocational Training Council in offering three types of retail courses under the government-subsidised Skills Upgrading Scheme. HKRMA feels education is crucial for the industry's growth. 'The government did a trial on the retail industry, and we helped and advised them to map out a career path within the industry,' Mr Yu says. The aim is to attract more professionals and graduates to the retail industry. He says that to maintain its shoppers' paradise status, Hong Kong requires a 'combination of quality products, good pricing and overall good service standard'.