The following report examines the need for Hong Kong Electronic Industries Association (HKEIA) to provide assistance for local electrical small and medium enterprises (SMEs) to enter the Southeast Asian Market.
Background of the project
In the past few years, Hong Kong's electronic industry has been facing intense competition from nearby countries, such as China, Taiwan, Singapore and South Korea. Many local SMEs failed to stand in this highly competitive business environment and end up being shut down. Due to the low demand of electronics over the territory, the industry mainly depends on exports. This implies that Hong Kong's electronic industry is vulnerable to the external economic environment. If the industry is being too dependent on a single market, it will be at great risk in terms of stability of business when the market slows down.
In order to enhance competitiveness and stability of local electrical SMEs, the HKEIA is exploring methods to help supporting their business.
To fulfill the report's purpose of exploring methods for HKEIA to help local electrical SMEs to enter the Southeast Asian market, this report includes these five main sections:
Appendices at the end of this report contained interview questions and a list of journal articles references of most use in this research.
In this report, we had carried out both primary and secondary research.
For primary research, we have interviewed 2 local electrical SMEs through telephone. We have asked for their opinion on the Hong Kong market, now and in the future. It also contains comments on the question asking for the willingness of their overseas expansion in the markets of Southeast Asia.
For secondary research, we had gathered information and ideas from recently published journals, articles and research papers, as well as government publications.
(A) Primary Findings
We had interviewed two local electronic SMEs through telephone on 23 April, 2013.
At first we asked about the market situation and prospect of the electronic industry in Hong Kong. One of the companies said that they think the situation now is optimistic, since a large sector of their business is supported by the Chinese market, which is quickly growing. However, they remain neutral for the prospect of the electronic industry because one day the China market will be saturated. Another company has a neutral attitude towards both situation and prospect of the local electronics industry. They think that the market in Hong Kong is dominated by large enterprises, and business in this industry is highly competitive not only locally, but also universally, where there rivals include companies in China and Southeast Asia. They are also that what impact will be brought about if the market of China is saturated.
Then we moved on asking if they are interested in expanding their business in Southeast Asia. Both companies are interested because this can enlarge their profit margin. Also, the consumer potential that Southeast Asia countries show is very attractive when compared to the China Market that will be saturated in the near future. Although they would like to enter the Southeast Asian market, the two companies agreed that they would have to face challenges including knowledge and information they can access, as well as infrastructure in some Southeast Asian Countries. (B) Research Findings
1.Electronics Industry in Hong Kong
According to HKTDC's research, Hong Kong's electronics industry is the largest local merchandise export earner. 58 percent of the territory's total exports were contributed by the electronic industry in 2012. Hong Kong was also the world’s largest exporter of telephone sets and the second largest exporter of calculators, sound recording apparatus, computer parts/accessories and video recording/reproducing...