Exclusive | HK$5,000 vouchers: Hong Kong’s Octopus Cards aims to make waves by tapping into luxury market
- Rita Li, company’s sales and marketing director, says digital voucher scheme has given firm a golden opportunity to break into luxury market
- Lane Crawford, Grand Hyatt, Joyce Beauty and Fred Perry are among the brands that have signed up for its payment system
E-payment operator Octopus Cards is banking on Hong Kong’s HK$36 billion consumption voucher scheme to venture into the uncharted waters of high-end brands and services such as Lane Crawford, Grand Hyatt, Joyce Beauty and Michelin-starred restaurant Cuisine Cuisine.
Rita Li Yuk-yi, the company’s sales and marketing director, said on Thursday the digital voucher scheme had given the firm a golden opportunity to break into the luxury market.
“The scheme has helped us tap into the upscale market. Without it some luxury brands might not see the urgency to install our payment system,” she told the Post in an interview. “Now many reputable brands have vehemently adopted our system.”
With 36 million cards in circulation and more than 110,000 retail outlets accepting it for payment, Octopus is a popular choice for small transactions in supermarkets, convenience stores and fast food restaurants.
Li said since April, more than 10,000 merchants, or a 10 per cent increase, had joined Octopus hoping to get a slice of the e-voucher pie.
Upmarket department store Lane Crawford, men’s clothing brand Fred Perry, Cuisine Cuisine and Yung Kee restaurants – widely known as “tycoons’ canteens” – the Grand Hyatt hotel, luxury beauty brand Joyce Beauty, and Samsonite luggage are among firms that have installed its payment system.
HK$5,000 vouchers: everything you need to know
All permanent residents and recent migrants from mainland China aged 18 and above are eligible for HK$5,000 worth of e-vouchers in two or three instalments, with registration open until August 14.
Residents will receive the first HK$2,000 from Sunday.
They can opt to receive the vouchers on their Octopus cards or via the other three approved e-wallet systems and have at most five months to spend them on transport, retail shopping and dining.
In the battle for customers, the four providers have scrambled to partner with shopping centres and larger retail chains to roll out billions of dollars’ worth of perks, including rebates, discounts, lucky draws, concert tickets, smartphones and bonus point schemes.
AlipayHK, for example, has announced HK$1.7 billion worth of perks through 100 merchants. The affiliate of tech giant Alibaba, which owns the Post, has partnered with luxury brands such as Chanel, Dior, Gucci and Tiffany & Co.
Partner merchants of Tap & Go, which is linked to Mastercard and UnionPay, include household names such as Apple, Louis Vuitton and Lenovo. Aside from moderately priced restaurants and outlets, WeChat Pay HK has signed up businesses such as the Royal Plaza Hotel and Marco Polo Hongkong Hotel.
Li also spelled out the firm’s ambitions, saying it planned to further expand its market by offering value-added services to merchants with its wide customer base.
“The voucher scheme is just a start,” she said. “Octopus has a market penetration rate of 98 per cent. We could help merchants to roll out different promotional offers such as e-coupons, e-stamps or loyalty programmes and reach a massive number of customers.”
Li said Octopus merchants could make use of its extensive customer network to provide targeted services and products without having to build their own network.
Beware of ‘early-bird offers’ for HK$5,000 voucher scheme, shoppers warned
In 2019, the company reaped a net profit of HK$381 million, up 6 per cent year on year.
Simon Lee Siu-po, co-director of the international business and Chinese enterprise programme at Chinese University, believed Octopus would emerge the winner in the e-voucher race, especially with its expansion to some high-end products and services.
“Octopus has a very high penetration rate in Hong Kong’s e-payment market and I believe many Hongkongers will opt for Octopus instead of the other three service providers due to their special preference for this firm,” he said.
Lee said that amid the economic ravages of Covid-19, many hard-hit upmarket brands would like to carve out a share of the e-voucher scheme and it was a good time for the firm to extend its reach.
“In the past it had very few upscale merchants but this e-voucher scheme has created a very good opportunity for Octopus to break into the high-end and luxury market as even premium brands would like to cash in on Octopus’ wide-ranging customer base,” he said.
