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< The Young Post inancid Dec 2018 COVER STORY Co-working space:new attraction for big companies
airbnb CHARGE SPOT OKASHI LAND ATIOAO 支Alipay HK J 星爍 無人 店 CONTENT COVER/MARKET Co-working space:new attraction for big companies 4 TREND Shared homestay pressures HK hotels in low season 8 TREND Shared power bank business makes a slit at Hong Kong 10 TREND Unstaffed stores hard to develop in Hong Kong 12 MARKET Tik Tok too instant to attract adver- tisers 15 MARKET Innovative ideas needed for ma- tured party house market 18
FOREWORD Approaching the end of 2018, this is our last issue for this semes- ter. New economy shares influence on Hong Kong like a whirlwind. Shared homestay and shared power bank make a slit in the city. The former one hits the hotel industry during low sea- son, the later one is a vibrant seed overcoming hurdles to grow. Some infant industries like co-working space become a new at- traction to Hong Kong corporation. Unstaffed stores, Tik Tok and party houses need to find a new way to survive. Meanwhile, a new gateway has also opened to welcome our new edi- torial board to take charge next year. Sector Representative Winnie Lee Financial Editor Winnie Lee Jessie Kwok Art Director Gary Poon Photo Editor Elizabeth Chen Advisors Alison Leung Jenny Lam Robin Ewing Publisher Alice Lee Editors Jessie Kwok Winnie Lee Annie Qiu Jenny Zhang Only He LisaWang Chow Shuen Kayee Cheung Gary Poon Winnie Choi Sunny Tse Koko Kong Elizabeth Chen Crystal Tang Fiona Lee Vicki Yang Trista Shi Jeannie Tang Reporters Rita Yeung Felix Tam Kenny Kwong Rebecca Lam Lucas Lo Torres Fong Karen Kong Coco Wong Bowen Liu Tiffany Chung Yuki Law Joyce Chau Winnie Lee Sector Representative Printer Department of Journalism School of Communication Hong Kong Baptist University Email youngflnancialpost@gmail.com FaceBook LAST ISSUE J^ariciSlUst The cover story of last issue discussed plus-size fashion shines in Hong Kong
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Co-working space : new attraction for big companies Reporter I Tiffany Chung Editor I Crystal Tang Co-working space in Hong Kong, which started to flourish in the early 2010s, has attracted not only start- ups and freelancers but also profes- sionals and big corporations such as IBM, KPMG and HSBC. These big names havecaught up with the trend and rented co-working places on hopes to enhance their employees' creativity and build relationships with start-ups to extend their busi- ness into this new customer base. In 2016, HSBC Hong Kong made headlines by moving its approx- imately SOO digital innovation department employees to a WeWork co-working site in Causeway Bay. Through shared workshops, big companies can better under- stand the development needs of start-ups. These kinds of interac- tions and engagement in co-work- ing space are beneficial to start- ups, as well as big companies. The New York-based co-working space WeWork arrived Greater China in 2016 and has 40 locations in Beijing, Shanghai and Hong Kong, providing office space for 20,000 members. It has three lo- cations in Hong Kong and is plan- ning to open a fourth location at Lan Kwai Fong, a popular expa- triate drinking haunt in Central. Catherine Leung, a spokesperson at HSBC news and media depart- ment, explained that when it comes up to ‘HSBC and Startup’, almost everyone thinks of the difficulties in opening an account. Since the United States has tightened its con- trol over money activities in recent years, banks have to tighten ac- count applications from new com- panies, especially those with unclear business nature. This problem has plagued many start-up companies because the nature of their business is often innovative and unique, bank staff may not understand their actu- al operation. However, by increasing the chances of contacting with ini- tial companies, hopefully, the banks will gradually open up. “Seventy percent of new (company) accounts come from startups, it’s a quite surprising proportion,” she said. "The development of startups will not only bring new impetus to Hong Kong's economic growth, but also strengthen Hong Kong’s com- petitive advantage. HSBC actively participates in the startup ecosys- tem and offers a variety of innova- tive solutions. We work in shared workshops to better understand the needs of startups, and their devel- opment plans,” Ms Leung added. WeWork is committed to building a global workplace network that helps companies grow with their employees. III|H tyfp.journalism.hkbu.edu.hk 5
6 tyfp.journalism.hkbu.edu.hk HSBC looks forward to entering the startup ecosystem to provide them with innovative solutions. Renting a shared workspace actually might not be cost-effective for big companies. According to the Hong Kong website of We Work, a working space for an 8-person team charges a minimum rent of about $50,000 a month, and the same rent is sufficient to pay for an office of nearly 1,500 square feet in the same district, which can accommodate about 16 to 20 people. Furthermore, some shared workrooms will charge additional fees for services such as photocopying and renting conference rooms. Despite this, We Work’s community management team manager Pinki Fung said their vice-president once revealed that large enterprise clients are currently the fastest growing customer base. In the United States, they uniquely set up a team to offer dedicated customer services to attract Fortune 1000 large companies. “WeWork designs each space into a stylisli, vibrant and creative ‘Silicon style’ office, and makes the space more visually spacious witli a transparent interval, encourage tenants to get to know each other. They will likely become a ‘big family’ masterly,” Ms Fung explained. rhe shared workspace not merely provides a relaxed environment for large companies to attract creative elites but also serves as a platform for expanding a business. For instance, Klynveld Peat Marwick Goerdeler (KPMG), one of the Big Four accounting firm, has started to let employees work in shared workplaces. Graven Ng, a KPMG property managing partner, believed that it helps to build extraordinary relationships with start-up companies and extend into new customer bases. When start-ups are rapidly expanding, they need special services such as auditing, consulting, and banking to gain the trust and investment of investors, while the company is looking at the business opportunities in this entrepreneurial trend. “When the working environment becomes fashionable and convenient, surrounded by relaxing facilities, it is no longer dull and boring to work. To attract companies to ‘check in’, the shared workroom combines office, entertainment and socializing, where employees can interact with versatile ‘neighbor’,” Mr Ng added. “Everyone in co-work space comes from a different background, yet has tlie same enthusiasm for work and entrepreneurship. Through shared workspace, people are likely to make like-minded friends, find partners, and even know future bosses or investors. The essential benefit would enable those large company to get familiar with the potential (of) startups. Thus, co-work space probably a new trend for them,” he concluded. I Member can relax and enjoy front desk service, facilities, drinks.
Shared homestay pressures HK hotels int low season Reporter|Bowen Liu Editor |Winnie Lee Shared homestay has become the top choice of young visitors to Hong Kong,affecting the city's ho- tel industry with the business of some traditional hotels falling be- low breakeven levels during the low tourist season,industry peoplesaid. Liu Gongcheng,chairman of the Hong Kong Tourism Hotels As- sociation, said that struck by mid- priced hotels and Airbnb, the oc- cupancy rate of traditional Hong Kong hotels fell to 20 percent to 30 percent in a low season. To reach a breakeven point, hotels must obtain a room occupancy rate for at least 70 percent, he said. The Rosedale Hotel Hong Kong (1189), one ofthe companies being hard hit,recorded losses of $42.63 million in the first half of 2018. Actually, the number of tourist arrivals to Hong Kong increased 3.2 percent in 2017,and overnight visitors rose 5 percent, according to the Hong Kong Tourism Board. But not every hotel can benefit. In 2017, 460,000 Hong Kong visitors chose homestay instead of hotels, accounting for 1.65 percent of overnight visitors. The homestay industry takes advantage of easy accessibili- ty through the Internet and low price,offering visitors an oppor- tunity to experience local culture. Jacky Wang, a mainland travel- er aged 20, said homestay allows tourists closer to local culture and the ordering procedure is conve- nient. Although the rooms are not tyfp.journalism.hkbu.edu.hk
8 tyfp.journalism.hkbu.edu.hk big, they offer reasonable prices to students like him, Mr Wang said. Andy, a traveler from Canada, said that homestay service is affordable and provides him chances to meet a lot of traveling fans. Problems rising in homestay segment Problems rising in homestay segment Homestay has brought impact to the local hotel especially in the low season, but problems are also growing in the sector, including illegal operation and complaints. Some of these accommodations do not have licenses and their neighbours complain about noises and their life being disturbed. Lei Hon Seng, the Hotel Industry Association spokesman, said, ‘’most of the homestay houses haven’t obtained a hotel license and homestay doesn’t require much previous investment, unlike the traditional hotel industry.” Airbnb, a popular homestay company aims to find resources for its users globally, has been making handsome profits. Brian Chesky, the CEO of Airbnb, said the company recorded US$93 million profits from US$2.6 revenues in 2017, according to a Bloomberg report in February. Chesky believed this industry would have better performance in the next few years. Since the homestay platform mainly relies on the Internet and doesn’t require many financial resources, it has become popular among youngsters who would like to share their homes. Young travelers also are the largest group of customers of the homestay market. iThome reported that Peter Coles, a senior executive of data science team at Airbnb, said, "The average age of the Airbnb customers is 29.” Disputesofdeter rent effect enhancement The government has proposed to tighten regulations on unlicensed operation of guesthouses in residential buildings, which could deal a heavy shock to the homestay business in Hong Kong. Based on the Hotel and Guesthouse Accommodation (Amendment) Bill 2018, if any residential unit is convicted twice in 16 months for the offence of operating hotel and guesthouse without a license, it will face a closure order for six months. The maximum penalty will rise from HK$200,000 to HK$500,000 and the imprisonment period will increase from two years to three years. The government will soon hold the third reading of the amendment but industry leader Airbnb called on Hong Kong people to support of home sharing. Mike Orgill, Head of Public Policy at Airbnb Asia, said in the company’s official website that 80 percent of Hong Kong residents support the Legislative Council to cancel the amendment to the Hotel Industry Ordinance, according to a survey conducted by Airbnb. Mr Orgill said he hoped the government hears the voice of the public instead of just considering the vested interests. The government can take the experience of other cities and nations. Take Japan as an example, the Japanese government has opened a green light to homestay industry. They allow holders to offer up to 180 days homestay service to travelers. ■ Users can choose according to their perferences on Airbnb.
9 tyfp.journalism.hkbu.edu.hk Shared power bank business makes a slit at Hong Kong Reporter I Felix Tam Editor |Winnie Lee Shared power bank business is expanding in Hong Kong with the mobile phone becoming an indispensable part of our life, however, some service providers are still facing difficulties and a few even have suspended their services under safety and other business concerns. Locate a shared power bank though a mobile application Shared power banks provided by ChargeSpot are rented to customers in charging station located in 18 districts. By using mobile apps, users can find a nearby charging station. The number of available bank chargers is also shown in the apps. Borrowers can take and return the power banks in a nearby charging station. ChargeSpot, a shared power bank services provider, constructed an automated GPS based system which allows customers to check the availability of power banks when they want to rent one through the apps. “Customers can rent and return power banks at any charging station across 18 districts,” said Jess Cheng, chief marketing officer of ChargeSpot. About HK$5 rental fee will be charged for the first hour. Renters need to pay HK$10 in total for the usage of 48 hours together with a deposit of HK$100. The deposit will be refunded after the completion of the transaction. ChargeSpot conducted a research and the results showed over 70 to 80 percent of people owned at least one power bank. However, less than 40 percent of people had the habit of charging their power banks or bringing their power banks with them every day. Therefore, there is market potential for such services which offer convenience to the public. Using “Hong Kong as a base, we have expanded the business overseas, including the East Asia region and Japan,”,Chan added. Demand rising but risks exist With the increasing usage of mobile apps, people require sufficient smartphone batteries for their daily routine. The development of electric payments, like Alipay, WeChat Pay and Apple Pay, also boosts their sales in Hong Kong. “Smartphones are of utmost im-
10 tyfp.journalism.hkbu.edu.hk portance nowadays and it is (a) prevailing trend which makes our business prosperous. It is believed that the business can be expanded to fulfil the enlarged demand,” Jess explained. “We aim to expand the stations up to 5000 in 2018,” Jess revealed. Cooperating with diverse stores and shopping malls, ChargeSpot provides more than a thousand stations, including in all The Link’s shopping malls and Sogo department stores. Pedestrian flow is the main determinant of installing charging stations. Taking Tsim Sha Tsui as an example, there are more than a hundred charging stations provided. However, major mobile service providers, like Smartone, CSL and CMHK provide power bank rental services and some market competitors also provide similar rental services with similar charges or even for free. The company needs to buy the third party risks insurance and also pass a test conducted by the Electrical and Mechanical Services Department. Special business model overcomes the hurdles Their charging stations provide LED screen for advertisements of different stores. Those advertisement users can get a discount Jess also mentioned that introducing this new renting habit in Hong Kong is difficult. “Changing people’s behavior and habit takes time. But, we still consider that increasing service convenience can change this situation.” Chenf added. The business model works but a company suspended the business Apart from renting power banks from different stations, Ecrent, an online rental platform, launched the shared power bank service from 2016 to 2018 and suspended the services recently. They cooperate with 7-Eleven, chain convenience store group, to offer the service. The company recorded over a thousand daily rental at average, it’s especially high in central business districts. “This is a 24-hour business and the demand are much higher than the supply.” said Chan, a spokesman for Ecrent. The cost of a power bank is only HK$40 to HK$50 and the rent fee is HK$ 10 for 3 days. However, they decide to suspend the rental business starting from 2018. “Safety issue is an uncontrollable risk in this business and it even cannot be completely covered by insurance or prevented by quality control and safety tests. Also, more cost expense is required to face the market competition. We have diverse business on the online platform and have to maintain the stability of the core business,” Chan explained. “This sharing business can benefit many stakeholders,” Simon Lee said, the convener of Sharing Economy Alliance in Hong Kong. Simon considered that it can provide marketing opportunities for the stores and the add-value services for the malls. “It does not take any public place and therefore a social acceptance level is ensured,” said Lee. Unlike shared-bicycle, Simon revealed that the cost of power bank shared service is smaller and at a reasonable level. “It does not waste any resource and clearly send a message to the public: Don’t waste anything. And, that is fulfilling the principle of sharing economy.” Lee explained. For the prospect of this sharing business, Lee mentioned that expanding the coverage can stimulate the underlying market.” Lee added, if they promote the bank charge services at the same time. It is a mutual-benefit relationship. To deal with the keen market competitions, ChargeSpot enhance the collaboration with stores by providing advertisements for them on the power bank stations’ screens and customize the charging stations’ theme specifically. “It can further expand our network by providing incentive and be more competitive.” said Cheng. Jess also mentioned that introducing this new renting habit in Hong Kong is difficult. “Changing people’s behavior and habit takes time. But, we still consider that increasing service convenience can change this situation.” Cheng added. The business model works but a company suspended the business Apart from renting power banks from different stations, Ecrent, an online rental platform, launched the shared power bank service from 2016 to 2018 and suspended the services recently. They cooperate with 7-Eleven, chain convenience store group, to offer the service.
The company recorded over a thou- sand daily rental at average, it's especially high in central business districts. "This is a 24-hour business and the demand are much higher than the supply."said Chan,a spokes- man for Ecrent.The cost of a power bank is only HK$40 to HK$50 and the rent fee is HK$10 for 3 days. However,they decide to suspend the rental business starting from 2018. "Safety issue is an uncontrollable oven can- not be completely covered by insur- ance or prevented by quality control and safety tests.Also, more cost e X- pense is r equired to face the market competition.We have diverse busi- ness on the online platform and have aintain the stability of the core ess," Chan explained. "This sharing business can benefit many stakeholders,"Simon Lee said, the convener of Sharing Economy Alliance in Hong Kong. Simon con- sidered that it can provide market- ing opportunities for the stores and the add-value services for the malls. “It does not take any public place and therefore a social acceptance level is ensured,"said Lee. Unlike shared-bicycle,Simon re- vealed that the cost of power bank shared service is smaller and at a rea- sonable level. "It does not waste any resource and clearly send a message to the public: Don't waste anything. And,that is fulfilling the principle of sharing economy."Lee explained. For the prospect of this sharing business,Lee mentioned that ex- panding the coverage can stimulate the underlying market."Lee added. n Hong Kong is difficult, but markets is expanding. 掃描借電 - HARGE oile application. Users can locate the nearest charging stations by using mobile appl tyfp.journalism.hkbu.edu.hk 11 鑍
Unstaffed stores hard to develop in Hong Kong Reporter|Rita Yeung Editor |Jeannie Tang Unmanned stores have been in- troduced to Hong Kong hoping to improve retailers' profit mar- gins by reducing staff costs, while business insiders believe it may be difficult to expand their busi- ness in the short run because cus- tomers are not yet accustomed to this new shopping experience. Amazon Go, unmanned store chain in the United States that has opened 2 stores, expects to open 6 more shops this year. There are two un- manned pop-up stores in Hong Kong that the business model is similar to Amazon Go, they are AlipayHK and Okashi Land. Both stores only operated around one month in September due to their pop-up store nature. High rent and investment costs hinder development The commonly known example of unstaffed stores in Hong Kong is the laundromat. Joseph Leung Wai- Kong Retail Technology Industry Association said many self-service laundries were opened in recent years. Since laundromats only pro- vide a single service, customers can handle the service easily,while unmanned stores like Amazon Go require different technologies. The biggest advantage of un- manned shops is savings on la- bour costs. However, labour cost is not the biggest operat- ing cost of stores in Hong Kong. "Radio Frequency Identification, Internet of things and securi- ty camera are some examples of technologies and infrastructures needed to be used in unmanned stores, but the investment cost is expensive as they have not been widely used today," Leung said. “High investment costs on technol- 12 tyfp.journalism.hkbu.edu.hk
ogies plus high rents in Hong Kong lead to a high operating cost of un- retailers have economic incentives will they open suc ch stores,butin fact, they don't have.Unmanned stores are hard to develop in the short run." A report conducted by the Census the cost structure of Hong Kong retail stores. The report reveals t rent and wages occupied 16.3 tal operating cost, respectively. According to Statista,an online sta- tistics and market research portal es accounted for 4.8 percent and 13 of shops in the US, respectively. Rents account for the largest por- tion of retailers' operating cost in Hong Kong, while labour cost in the United States ranges the top among all elements of operating costs. Adding to big investments in tech- 4 nolog e saving in labour cost by opening an unman ned store in Hong Kong might not be as big as t s those in the United States. There are over 40 unmanned ed in China, hoping reduce labour cost. But more than 10 of them have already shut down,media reports showed. The main reason for shutting down the store is thnat the staff cost in China is not that expensive. Monthly salary of a cashi nd RMB3,000 to RMB5,000 (about HK$3,419 to HK$5,698). The investment cost on technolo- es such as sensors, security camer- gies su nd artificial intelligence will be a lot more than RMB5,000 a month. Unmanned stores are not easy to ost or other costs, such as rents, cost that are bigger than labour cost. Low incentives to adapt to finan- cial technology Unmanned stores are hard to devel- op as cit et accustomed to this new shopping experience. tor of the Hong Kong Department Store and Commercial Staff General Union said senior citizens are not ac- 奥海城 OlympianCity 奥海城 奥海城 Alipay HK OympionCey Owne 星 爍 無人店 AlipayHK pop-up store opened in Olympian City in early September. tyfp.journalism.hkbu.edu.hk 13
customed to wireless payments and new technologies in unstaffed store. “I am curious about the store but I prefer to shop in a staffed store. 1 am too old to use the technology that I even don't know how to en- ter the store without help,” said Ng Kin-Wah, a 65 years old shopper at Okashi Land. “I will shop in unmanned stores. It is fresh and fun. However, I be- lieve that paying with a cashier’s help will be faster as some peo- ple may not know how to do self-checkout,” said Timothy Sin, a 22 years old shopper at AlipayHK. Tsoi added that some customers, es- pecially older people, prefer face-toface services rather than self-service. “Some customers chit-chat with the staff and make friends with them. Therefore, there is a feeling of inti- macy when there is staff at the shop.” He said that more people use mobile payment in recent years but its acceptance is still fall- ing behind other countries. “The mobilepenetration ratein Hong Kong is up to 248 percent but con- tactless payment is still way behind,” he said. "Boosting the use of mobile payment helps unmanned stores develop as it is part of the store.” Speaking of government support, Leung said the government did not take a lot of initiatives in promoting digital currency and building Hong Kong as a smart city. Strong competitors drive un- manned store away Strong competitors drive unmanned store away Retailers operating unmanned stores not only face high operating costs but also face strong competition. According to the Grocery Market Study done by Consumer Coun- cil, the market share of the two largest supermarkets account- ed for 62.5 percent. The finding shows that newcomers are hard to get into the retail industry. "Nowadays, convenience stores are all around us. They sell diversified goods. People can get what they want within 15 to 30 minutes. What’s more, convenience stores are oper- ating 24 hours a day,” said Leung. 1 Ie suggested that the only way for unmanned stores to attract cus- tomers was to sell unique goods. People could get different import- ed goods from supermarkets, con- venience stores and online stores. It would be challenging to decide what goods to be sold in the stores. Technologies used in current unstaffed stores need to refine Timothy Sin shared his shopping ex- perience at AlipayHK. He said the robotic coffee machine in the store failed him and the machine worked again with the help of a staff member. “The technologies have not yet re- fined. There are around 10 staff members in such a small store. They help fix the technologies and custom- ers problem," he said. Leung believes that the two unstaffed pop-up stores are just for testing the water while waiting for the tech- nologies and the market to mature. Salespersons are needed to boost sales and recommend the right products or provide services to customers. Unmanned stores lack these human interactions. Tsoi said traditional stores can- not be fully replaced by unmanned stores yet. “Sales revenue of some retail stores with promotors can gain HK$100,000 to HK$200,000 more than stores without promotors.” Coffee machine in AlipayHK failed the customer 14 tyfp.journalism.hkbu.edu.hk
主描钛 Tik Tok too instant to attract advertisers Reporter |Rebecca Lam Editor |Elizabeth Chen Blew-up short video platform,Tik Tok encounters obstacles finding advertisers as its fast and instant characteristics make advertising hard for users and advertisers. Tik Tok influencers are unable to show their characteristics and sell the products in details, Mr Edwin Wong Kong-yuen, the co-founder of an online market- ing platform said. While Tik Tok users observe growing dispar- ity of the view counts between them and established influencers. Tik Tok had highest downloads among non-game apps on the Ap- ple app store globally in the first quarter of 2018, according to market research company Sensor- Tower.Massive traffic comes with potential business opportunities, however, Tik Tok's 15 seconds long video is enough for creat- ing a relaxing lip-synching video, but definitely too short to pres- ent products for sale in details. for the implementation of the du- al-share class structure since it can guarantee the control of founders over major decisions," said Darwin Choi,an assistant professor in the finance division of the Chinese Uni- versity of Hong Kong. Launched in September of 2016, Tik Tok, also known as Douyin from ByteDance Technology in China, allows users to watch mu- sical clips, shoot, edit short clips and add special effects to videos. Being one of the most fast grow- ing apps in the world, Tik Tok has more than 500 million monthly ac- tive users all over the world and become the most downloaded free tyfp.journalism.hkbu.edu.hk 15
app in App Store (Hong Kong). Having a massive number of teen- age audiences, Tik Tok is a heav- enly advertising platform for brands who desperately need to expand their youngster market or want to promote themselves through viral videos. Howev- er, advertisers are not thrilled at this new marketing opportunity. Second long videos can’t attract advertises Limited brands were interested in Tik Tok, said Mr Edwin Wong Kong-yuen, the co-founder of Cloudbreakr, a platform matching influencers with brands by analyz- ing social data. The main difficulty comes from its instant nature and monotonous video theme. Cost of advertising was also one of the considerations. Wong point- ed out that the cost of advertising on Tik Tok was not cheap because the ads were too short. The most effective way was to pay for the splash ads, a full-page interstitial ad that is displayed immediately after the application is launched, which costs at least hundreds of thousands of dollars. It was too risky for the advertisers as putting an advertisement on Instagram only costs thousands of dollars. Wong believed that the most ap- propriate and common way to ad- vertising on a live streaming plat- form was embedded advertising. Embedded advertising is highly acceptable for Tik Tok users as a research conducted by Tencent’s Penguin Intelligence shows. About S3 percent accept ads embedding in the tutorial video. And 74 percent like to see ads promoting prod- ucts in a funny and creative way. However, advertisers find it difficult to recruit suitable Tik Tok influenc- ers to become their product endors- er. With only seconds-long videos, the type, positioning and target au- dience of a Tik Tok influencer are unclear. As the co-founder of an in- fluencer marketing platform, Wong said, "Most of the time, when you want to sell a product, you need to present the experience of using that product in details and show the features. However on most of the live streaming platform, they can only introduce the product plainly because of the time limitation, they cannot describe the item in details.” Even though 74 percent of respon- dents like funny ads on Tik Tok, Wong found out that advertisers liked to promote in an aesthetic way instead of being humorous. Instagram is still the most pop- ular platform to Wong’s clients because they like to see beautiful things and content of decent quali- ty, which are more long-lasting and sustainable. Tik Tok is not a plat- form suitable for every brand as they may promote different values. Tik Tok’s creators cannot keep audience Once the users open Tik Tok, a video will start playing right away without you even selecting one.The videos that played automatically are featured videos, labelledd “For You,” which are viral videos recom- mended by an algorithm. Tik Tok’s creator complains that this causes polarization of view counts. Mr Simon Lee Cheuk-ming is the founder of Barkids, a local street workout team. He created a You- Tube channel 5 years ago, and his tutorial video of street workout helps him recruit students and gain business cooperation and perfor- mance opportunities. He has start- ed playing Tik Tok for 3 months and his most-viewed video has 17.6 thousands of hearts. But he soon found out it is hard to keep the au- dience’s attention with the same trick. "I think maybe they like some- thing exciting and new, so I started posting video of me doing a street workout. But the audience has al- ready been complaining my video boring. So 1 have to think of some new tricks. ” The loss of audience was not only caused by the repetitive content but also caused by the “For You” function, Lee said. The popular influencers are more likely to get rec- ommended while the others get less and less opportunity. Lee also com- plained the search function of Tik Tok was not as comprehensive as YouTube, which is still his favorite platform. Tik Tok’s users prefer less advertisement There are around 66 percent of to- tal Tik Tok users from female and 75 percent of total Tik Tok us- ers from teenagers under 24, they mainly watch short music videos to kill time, according to Tencent’s Penguin Intelligence. Hong Kong secondary school students Ms Mandy Wong said that she knows Tik Tok from her friends. She has used the app for a month and she spends 2 hours on it every day. “It is unstoppable using Tik Tok, it au- tomatically jumps to the next video when one ends, and every video is as 16 tyfp.journalism.hkbu.edu.hk ||
fun as the last one.” Mandy thought that there is less ad on Tik Tok than other social media like Facebook and Instagram, so it is acceptable for her. Lee hates commercialization,he can only accept product placement and embedded advertising in his favor- ite influencers' video. Non-skip- pable video ads are totally unac- ceptable. “Time is very precious, I waste 30 seconds of my life if the ad does not fit me." Also, he said that Facebook and Instagram were already flooded with ads, he does not hope Tik Tok to be the next. Tik Tok attracts 500 million month- ly active users all over the world, but the instant nature of short video platform makes video cre- ators difficult to show their per- sonalities and promote themselves. Advertisers also think advertising on Tik Tok is risky and shallow. “Make every second count" is the slogan of Tik Tok, yet it is a long way to persuade the advertisers. Simon's first street gym video on Tik Tok went viral at instant. But the audience's attention is hard to keep. Simon recruits his students mainly from YouTube by sharing street gym tutorial, he thinks Tik Tok cannot be a re- placement as the app is not targeted at local users. (From Barkids Facebook) tyfp.journalism.hkbu.edu.hk 17
18 tyfp.journalism.hkbu.edu.hk Innovative ideas needed for matured party house market Reporter I Coco Wong Editor | Winnie Choi The business of party house has been growing in Hong Kong since 2010, when the Development Bureau implemented revitalization measures to industrial areas allowing party houses to operate in these lower rent buildings. After enjoying eiglit good years, now the market has become mature and entrepreneurs have to be more innovative in order to survive in this red ocean market with more than 150 operators. Instead of providing homogeneous services like board games and Mahjong, V-owl Station and LARPHK are introducing something new to attract customers. Idea inspired by overseas V-owl Station, a party house in Kwun Tong, made a difference in 2016 by getting participants involve in experience 4D Virtual Reality (VR). By using a large monitor and futuristic VR goggles, Sean Chan an owner of V-owl Station said it makes their services different from others. Mr Chan said that they are one of the first five VR experience party houses in Hong Kong. Although they are not using the same management style as the similar operators in South Korea and Japan, Chan and his partners have tried different VR games from overseas. Targeting broader market After trying various VR games, Chan found that VR may help to broaden their customer base. “It could considerably fulfill the inter- ests of different age groups. Not only games for young adults, but also for the elderly and children, they can also enjoy extraordinary experiences through VR like traveling to space or diving,” said Mr Chan. Being different from competitors, V-owl Station targets families as key customers, challenging the assumption that young adults would be the majority of customers of party house business. “Instead of the youngers, families spend more time in our party house. To catch this chance, we decided to provide VR workshops cooperating with A Star Coding. Parents and children can not only experience the VR devices, but also learn how to create VR scenes and make use of simple coding,” said Mr Chan.
19 tyfp.journalism.hkbu.edu.hk Although these workshops could not boost the sales of V-owl Station much, they have received warm and encouraging responses from customers. Another newly-opened party house LARPHK also got inspiration from overseas, creating unique Live-Acting Role Playing (LARP) experiences for Hong Kong participants. Howard Lam, who founded LARPHK in April this year, has three-year experience in the board game industry. He found that LARP is one of the most popular family games among Western countries, especially in Northern Europe. Meanwhile, LARP games have become trendy after being introduced by TV reality shows in both South Korea and China. With constantly increasing attention to LARP, he decided to bring this new trend to Hong Kong. In order to control the quality of the game, LARPHK has a standard on the gender and number of participants. “LARP games have less flexibility that the characters are fixed in every script. It is hard to change the number of participants at the last moment. Therefore, we have a strict limitation on the gender and number of participants,” said Mr Lam. To face the keen competition among other party houses with VR services, Mr Chan trusts that updating the game list timely, together with meticulous selection among the sea of VR games would be one of their advantages. “When there is a new game published, we will purchase it within two weeks. Then, we will evaluate the game before our customers reach it as there are always some games too complicated for beginners”, he said. Mr Chan also believes the diversity in gaming could lead V-owl Station to success. “Some of our competi- tors are merely offering a few kinds of VR games. They may only focus on one specific theme while we get a great variety of game collections”, he explained. Referring to the website of V-owl Station, it provides over 250 game collections, including “Job simulator” and “Fruit Ninja”. On the other hand, Mr Lam has confident in the quality of their services and scripts provided. As it is assumed that each participant would not attempt to the same storyline more than once, Lam and his partners put a lot of effort into perfecting the scripts. “When participants finished the game, we would collect their feedback and check if there is any bug discovered throughout the game. It actually requires a lot of human resources to edit the scripts, which is far more than customers expected. It is also why we charge a relatively high price that many participants frequently questioned on it,” Lam said. Higher initial costs affect breakeven Regarding the sales performance of V-owl Station, other than the rental services of party rooms, nearly 60% of their revenue came from the rental service of VR devices. Mr Chan said that the service is mainly provided to companies for their annual events. However, he did not disclose any financial details of V-owl Station. But Mr Chan said V-owl Station also offers team-building events to companies to expand its revenue stream and as a type of advertising. “We have organized team-building activities with VR devices for more than 10 local companies. It is great to hear that some users got back to our place due to those experiences,” he said. LARP games are relatively new to people and Lam is likely to be the pioneer in Hong Kong. Luckily, LARPHK grabs the publics’ attention successfully after promoted by the media. “We provide five to six LARP sections per day. All of our room bookings are full in the coming two weekends,” said Mr Lam. However, no further financial details were disclosed. Referring to the standard charges shown on the website of LARPHK, their estimated revenue at a weekend would be HK$4,500 for 6 LARP games in general, assuming the minimum charge per person is $150 and the least participant number of 5 for each game. Comparing to the traditional party houses, both V-owl Station and LARPHK apparently have a relatively high initial cost. LARPHK invested almost HK$400,000 in room decoration; while V-owl station has invested nearly HK$ 160,000 for four VR devices and spent regular expense on purchasing new games. Although Mr Chan and Mr Lam declined to reveal the revenue of their firms, both companies are still operating below break-even point. Unique themes grab customers’ interests Mrs Lee, a mother of an 8-year-old boy, said that she rented a party room for a birthday party before, but never try one mainly providing VR devices. She thinks that a VR coding workshop is an interesting learning experience for her kid. Michael Tang, a graduate who was a frequent customer of party room during his university life. He agreed that the newly created LARP games are more creative in nature comparing to those static traditional games in other party rooms. He would like to make an attempt in the near future.