Online brokerage Futu Holdings plans ‘experience stores’ in Hong Kong eyeing new clients and HSBC-like household name status
- Physical store will allow customers to try Futu’s trading platform in person and talk to investment specialists
- Surging trading volumes and declining advertising costs have helped Futu offset the impact following ban from soliciting new mainland business
Futu Holdings, an online Chinese brokerage backed by Tencent, will open three “experience stores” in Hong Kong as it builds up its physical presence to attract new clients in the financial hub after it was banned from soliciting new business from mainland investors.
The first store, spread over a 4,400 square foot area, will open in the popular tourist district of Tsim Sha Tsui in July, weeks after the broker was ordered to remove its trading platform from mainland China’s app stores.
“Tsim Sha Tsui is an iconic landmark in Hong Kong, and we want people to have a strong impression of Futu when they come to visit the city,” Joe Yu, Futu’s marketing director said in an interview with the Post. “It will help us expand our customer base and build an important brand asset,” he said while adding the company plans to open two more stores in the city in the near future.
By expanding its physical presence in the city, Futu hopes to strengthen its brand recognition and enhance its appeal to potential clients outside China.
“We want to make ourselves a household name like HSBC,” Yu said.
Similar to Apple’s genius bar, the new store will allow customers to try Futu’s trading platform in person and talk to the specialists about their investment preferences, Yu said. The company will also host regular seminars and events to provide investor education.
Futu and UP Fintech take down trading apps in China to meet CSRC requirements
The Robinhood Markets-style platform primarily caters to mainland Chinese retail investors who want to trade shares listed in cities like Hong Kong and New York. Yu said his company had stopped recruiting new customers in the mainland since December to comply with regulations and that the offline expansion in Hong Kong was planned before they knew about the regulatory change.
But surging trading volumes in US stocks and declining advertising costs have helped offset the impact from the mainland ban. In the first quarter, total revenue rose 52 per cent from a year ago to HK$2.5 billion, while profit doubled to HK$1.2 billion.
Despite the solid earnings growth, inventors remain nervous about the scrutiny of the technology sector, with online brokerage stocks having taken a beating since the official warnings. Futu’s stock price in the US is a mere fifth of its peak struck in 2021 while rival UP Fintech’s shares trade at less than a tenth of its all time high.
Futu plans to increase revenues by offering a wider range of products, including bonds and mutual funds to its existing customer base on its platform, and by rolling out stores elsewhere in the region, said Yu.
“Hong Kong is a good testing ground,” Yu said. “If the experience stores can bring better brand awareness, we will push them out in other offshore markets like Malaysia and Singapore too.”
