How old Hong Kong businesses have reinvented themselves for 21st century

Chocolate custard mooncakes. XO sauce. Machine-washable woollies. Innovation, some forward thinking and an injection of youth helped Kee Wah Bakery, Lee Kum Kee and Chicks undergarments maker stay relevant

PUBLISHED : Tuesday, 26 April, 2016, 6:31am
UPDATED : Wednesday, 27 April, 2016, 4:49pm

Mooncake with chocolate custard filling? Kevin Wong Sik-cheung was aghast at his son’s proposal three years ago to introduce the item to the product range at Kee Wah Bakery.

“When my eldest son and his cousins first made the suggestion, I immediately shot it down because selling chocolate pastry deviates from our family business of making traditional Chinese cakes,” recalls Wong, Kee Wah’s managing director.

Founded in 1938, the company is one of the city’s oldest bakers, known for its range of traditional Chinese goodies such as bridal cakes with flaky pastry and lotus seed or bean paste filling,

But the elder Wong eventually gave the green light for the newfangled mooncake: his son persuaded him to take a bite, and it turned out to be delicious.

Wong has since become more receptive to other ideas, including one item that began selling in their shops last month: chocolate almond crisps.

It can be tough trying to sustain a heritage business. There’s an advantage, of course, in having a recognised name and rich history. But in clinging closely to tradition, there’s also a danger that these firms, many of which are family run, may be regarded as fusty and out of touch with what consumers want.

To continue to thrive, advertising veteran Nelson Ng Fong-lim says, companies should leverage their strong brand name by adding value to existing product lines, introducing new items, and changing marketing strategies from time to time.

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“The old brands can’t simply sit back and do business the same old way. They must keep tabs on trends,” Ng says.

Chun Au Knitting, which makes the Chicks undergarments, sauce maker Lee Kum Kee and Kee Wah Bakery are among the family-run businesses in Hong Kong that have taken this insight to heart.

While one competitor after another faded from the scene, Kee Wah successfully rebranded itself and expanded into new markets. Even 21 years ago, when Wong first joined the family business, he recognised the bakery had to modify its business model if it was to survive – the growing popularity of Western cakes was threatening a core trade in classic Chinese pastries.

Chinese couples customarily presented friends and relatives with traditional pastries along with wedding invitations, a practice originating in Guangdong. But these “bridal cakes” were not only more expensive, they looked plain compared to Western cakes which were often more attractively decorated and packaged. Customers began

to gravitate towards the latter, and Wong knew he had to take action.

“In the past, there was no special packaging for Chinese cakes,” he says. “To regain our business, we designed [boxes] for our bridal cakes so that they make more exquisite and appealing gifts to families.”

Most changes at Kee Wah were incremental. Over the years, the chain has expanded its range of pastries, Chinese and Western, to attract younger customers while retaining long-time patrons. It has also modernised its design, giving a retro chic look to its outlets, signage and packaging (a number of gift sets, for example, feature illustrations by popular artist Ah Chung).

“My father started Kee Wah as a grocery store and later turned it into a bakery. When he first opened his bakery shop in Shanghai Street 80 years ago, he only sold two items – Chinese almond biscuits and Chinese shortbread [kong so bang],” Wong says. “We later introduced bridal cakes and moon cakes. Now we have more than 500 items.”

In 2004, the chain also introduced souvenir sets featuring a variety of traditional pastries to tempt tourists, especially those who had trouble selecting gifts that could represent Hong Kong.

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In adopting retro packaging, Ng adds, heritage companies are tapping into the current appetite in Hong Kong for nostalgia. “Moreover, retro design reminds old and young customers of childhood memories to subtly build up patronage.”

At Chun Au Knitting, executive director Tam Kin-tung also knew the company could not keep peddling cotton and woollen undergarments as his grandfather had done 70 years ago.

“I m very proud of the quality of our underwear – one customer told me he was still wearing a garment he bought from us 10 years ago. But while we maintain our reputation for durability, we can’t simply wait for customers to replace their gear,” he says.

New technology is one avenue that Tam has actively sought to improve existing products and develop new lines such as machine-washable woollies.

“In the old days, all woollen items were hand-washed. As the economy took off in the 1980s ... people rarely hand-washed their clothes. So we introduced machine washable woollen undergarments to make life easier for the housewives,” he says.

To target frequent travellers, Chun Au also developed a range of lightweight, quick-drying undergarments in the 1990s. It diversified further in subsequent decades, expanding its summer catalogue, and moving into casual wear and more recently into baby wear.

“The ratio between our winter and summer products has gradually shifted from 9 to 1 in the past to the current 7 to 3 ; our target is 6 to 4,” Tam says.

Among the most successful of the family-run heritage brands has been Lee Kum Kee. It began in 1888 as a maker of oyster and shrimp sauces and stayed that way for more than eight decades. But in 1972, the third generation of the family, under group chairman Lee Man-tat, expanded their product range, adding soy sauce and other condiments.

Lee made it a point to eat out regularly to sample the condiments offered in different restaurants – and pick up ideas for his product development unit. This yielded additions such as XO sauce and special soy sauces for steamed fish, braised chicken and pot rice, turning seasonings that were once exclusive recipes of individual restaurants into household items.

Later, catering to the needs of busy urban households, came a line of sauce packs to make popular dishes such as lemon chicken and sweet and spicy beef ribs. All home cooks had to do was to follow simple instructions on the packets to heat up basic ingredients with the sauces.

Then, riding on the Hong Kong craze for all things Korean, it released a Korean-style marinade and a barbecue sauce last year, with a range of Asian-style salad dressings due to hit shop shelves this month.

“We are never complacent. A good portion of our products cater to mainstream consumers in [different countries],” says Charlie Lee Wai-chung, who now oversees Lee Kum Kee’s sauce division.

“Even in China, taste profiles vary from one region to another. For us that means coming up with products that would satisfy the local palate. Nowadays, our products are used in space by Chinese astronauts as well as at the International Space Station.”

(The group operates plants in China, the US and Malaysia to supply various markets, and has also been making herbal supplements for more than a decade under the Infinitus brand.)

Ng notes that successful heritage companies have learned to engage with their customers by using social media such as Facebook and sharing useful information on their websites (wedding etiquette for those buying Kee Wah’s bridal cakes, for example, and tips for caring of garments on the Chicks site).

“Those companies also hire younger actors and actresses for their ads to rejuvenate their corporate image and to attract younger customers,” he says.

While Kee Wah hired Taiwanese actress Annie Liu Xin-you to promote its bridal cakes, Chicks found young local photographer Will Cho to be its spokesman. Both celebrities have the sort of young and wholesome image that suits the companies, Ng says.

“Besides TV ads, which remain the major and most effective way of advertising, companies have kept up with [digital] trends and started to use online ads. However, the marketing effect of online ads remain unknown,” he adds.

Most old-established businesses are keenly aware of the value of the goodwill nurtured through generations even as they try to cultivate younger customers. One common marketing strategy is to get the children of popular celebrities involved in promotion campaigns, Ng says.

“For example, Chinese medicine manufacturer Wai Yuen Tong has hired actor Adam Cheng Siu-chau to promote its products since 1970 and now it invites his daughter Joyce to be its spokeswoman.”

Similarly, Kee Wah Bakery recruited television host Bowie Tsang to join her father Eric Tsang Chi-wai in its mooncake ads last year after having had the showbiz veteran front its promotion campaigns for several years.

Differences between the older and younger generations are inevitable, of course, in negotiating the path to revitalising a heritage family business.

“There is always a tension between bringing in new items to keep pace with the market and maintaining our business tradition. The new generation in my family always come up with innovative ideas while I always try to keep their plan within the boundaries of our business tradition,” says Wong of Kee Wah Bakery.

“But such tensions create a synergy for us to move forward and explore new opportunities, such as our chocolate and custard mooncakes,” he adds.