Moving Forward

Will people still go to shops 10 years from now?

City Super Group President Thomas Woo Ka-wah said Hong Kong retailers ought to pay attention to technological and consumer trends.

PUBLISHED : Monday, 02 May, 2016, 3:55pm
UPDATED : Monday, 30 May, 2016, 5:11pm

Will people still go to a shop 10 years from now?

That is the question posed by Thomas Woo Ka-wah, president of City’super Group, about the future for Hong Kong’s many retailers as customers increasingly turn to technology and e-commerce.

Woo has always told his 2,700 staff to be aware of how technology could change the way people shop and to think of innovative ideas to meet new trends.

“Technology and e-commerce will affect traditional retailers. It is just like how Uber affected how taxi drivers take orders from customers. These developments allowed customers to enjoy a better service,” Woo told the South China Morning Post in an interview at its flagship store at Harbour City in Tsim Sha Tsui, the largest of its four stores in the city.

“All companies in Hong Kong need to pay attention to how these technological changes will affect our business models in Hong Kong.”

Some people may well buy daily necessities such as milk and bread online or via their mobile phones and get the goods delivered to their home. That is why retailers also need to consider developing e-commerce – to meet the needs of these customers, he said.

City’super already has a e-commerce platform. However, Woo does not believe the internet will replace all traditional ways of shopping, and it only means City’super and other retailers will have to offer a better shopping experience to customers.

“Shopping itself is an enjoyment exercise. We are not only selling products at our stores but we are bringing the best food and wine shopping experience to customers. Our staff will introduce new products to the customers while we allow them to try our wine and food at the shops. Some of our shops also offer cooking classes to customers. These experiences are not going to be replaced by the internet,” Woo said.

Technology could also help retailers collect and analyse shopping data to help them know what are the best-selling products and to better track the favourites of customers.

“Retailers who can make best use of technology tools will be able to react quickly to a change in customers’ tastes and fit their business models with what customers want,” he said.

Woo said the younger generation in Hong Kong should also use technology and e-commerce to set up new businesses.

“Young people should think positively,” Woo said. “New technology and e-commerce has enabled them to develop their own businesses with not much capital. What they will need are innovative ideas with a hard working and positive-thinking attitude.”

Woo said the whole concept of City’super was as a start-up by senior managers who had formerly worked at Japan’s Seibu department stores in Hong Kong in the early 1990s.

When Seibu retreated from the market and sold its business to the Dickson Group, the former managers decided to set up their own business and the new group was born.

Twenty years on and City’super runs high-end food and wine stores, stationery and travel shops, the accessories and lifestyle chain Log-on and cooked-food delicatessens in Hong Kong, Taiwan and Shanghai.

As Chinese people get wealthier – and many of them have studied or lived in the West – they demand more good food and wine and lifestyle products.

“We consider City’super is growing up with city life,” Woo said. “We believe there will be more opportunities for us to enter other Chinese cities which are also growing rapidly, and the people there will generate strong demand for good food and wine.”

He said he is unconcerned about the economic slowdown in the mainland and Hong Kong and whether it will hurt sales.

“If people want to save money, they may cancel planned travel or delay some big investment plans. Buying some good quality meat and vegetables to cook at home does not cost too much. It is better value for money than dining out. We have passed through many economic crises over the past 20 years, including the Asian financial crisis in 1998 and the Sars outbreak in 2003,” he said. “But we did not see people cutting down on their food expenditure substantially.”

He said that having quality staff and store locations are crucial in retailing.

Customers like to be served by people who understand the products and have a sincere attitude, he said. They also want to go to a well-located shop that is spacious and well-designed. Businesses can suffer from making the wrong choices in these matters. This is why City’super is very cautious when picking the locations for its outlets, he said.

“We need to run the stores at such a sheer size because we need the scale and a wide range of products for customers to have a good shopping experience,” Woo said.

He said high-end food and wine stores had developed well in Hong Kong, Shanghai and Taiwan because those markets were more developed with more affluent clients who were food lovers and had experience abroad and wanted western and Japanese food, wine and other lifestyle products.

“The set up of City’super was a good start-up experience,” Woo said. “When the Japanese department store operators went back to Japan, we did not give up. We used our experience to reincarnate and establish City’super. It was not easy at the beginning but we have done it.”

“In their golden era in the 1980s, many Japanese department stores were so successful. Still, they expanded too quickly overseas. Many of them just followed the crowd and went and opened many shops across Hong Kong and in other Asian markets. However, many of them did not make any profit. When the Japanese economy slowed in the 1990s, they all retreated and reset their focus back to Japan,” he said.

“City’super also plans to invest overseas, for example in many Asian markets. We would, however, do it gradually and not too quickly,” Woo said.