26 Jan 2015
World SME Conference Sees Sector Thriving and Notably Asia-Focussed
Record numbers attend 2014 World SME Expo in Hong Kong, with a particular emphasis on franchising, IPR protection, developing human capital and opening up new markets, notably with regard to opportunities across the mainland.
The 2014 World SME Expo (WSMEE) set out to once again provide innovative solutions for a wide range of business and consumer needs, while marrying invention and cutting edge know-how to customer and market requirements. Lofty aims indeed, but did it deliver?
While catering to small and medium-sized enterprises, the event certainly delivered in terms of both exhibitor and attendee numbers. This year, exhibitors from 362 regions, representing some 218 countries, attracted nearly 20,000 visitors to the 14th edition of the show. In order to handle such a high attendee volume, the 2014 event was organised into four categories, while also offering three dedicated themed zones.
The first zone, Franchising, focussed predominantly on those organisations seeking business partners willing to introduce already successful domestic brands to foreign markets. Explaining the appeal of the range of brands her organisation had brought to the event, Chit S. Estrada, Executive Director of the Philippine Franchise Association, said: "There is no one particular brand that can provide solutions for all market requirements. Each brand has to be evaluated on its own merits. Only after having made such an evaluation should a franchisee then select the brand that best fulfils the needs of any given target market."
Citing Jollibee, a well-established Filipino fast food chain, as a case in point, she said: "While perhaps not being able to compete head-to-head with well-established Western brands of a similar ilk, Jollibee would definitely have an advantage in markets where there are large communities of Filipinos – Dubai, Canada and the US for instance."
Elsewhere, China's seemingly inexhaustible domestic market was well-represented by a number of suppliers, as well as by a number of regional and provincial administrative bodies – including the Foshan Bureau of Commerce, Economy and Trade Bureau of Guangzhou Tiante District and the Shanghai Municipal Commission of Commerce. A variety of opportunities to collaborate with these bodies was on offer, particularly in the areas of agriculture and heavy industry.
Despite recent difficulties in a number of global markets, American, European and Asian SME participation was notably strong. Sweden's Happy Ears, for instance, was in Hong Kong to showcase its earplug technology, said to be combination of both soft and hard plastic, with its products designed to reduce ambient noise levels to safer and more manageable levels. It is said to have particular applications for live events and the reduction of transport-related noise pollution. Pitching its appeal more widely still, Jukka Vitasara, a Designer and Partner with the company, said: "They are ideal for anyone who just wants to get a good night's sleep in a busy city."
A slice of Japan came to the event courtesy of the Osaka-based Ohken Industry Co Ltd. Its "RI AN" tearoom is a prefabricated set of components that, when assembled, become an authentic Japanese tearoom. The company can also supply original rocks, gravel and lanterns, further enhancing the authentic Japanese experience.
The home team was also very much in evidence. The University of Hong Kong (HKU), via its Technology Transfer Office, brought a number of innovative solutions to the show, including a series of pioneering engineering, biotech and medical concepts. According to Queenie Chan, HKU's Senior Consultant for Business Development, the university was keener than ever to find partners to help bring its new technologies to the marketplace.
She said: "In terms of cutting-edge medicine, Arsenol is a prime example of what we can do. It's a pharmaceutical that consists of arsenic trioxide, itself an APL leukemia treatment. The innovative aspect of the HKU formulation is that we have developed a variant that it is no longer an intravenous medicine, but works as an oral formulation. This frees the patient from the need for hospitalisation each time the medicine has to be administered."
Overall, this year's event proved an apt showcase for a wide variety of solutions aimed at enhancing the competitiveness of SMEs, ranging from SME financing, IT, e-Business, government and institution support, to enterprise and operational underpinning. A key player on the financial side this year was Lehman Brown International Accountants, with Ray Cheung, a partner at the business particularly impressed by the diversity on offer.
He said: "Over the past few years, we have seen more overseas companies setting up representative offices in China. It is no longer mainly just manufacturing, we now see SMEs setting up representative offices across a wide range of industries. Of late, the service industries and financial planning have proved particularly popular."
This shift in Sino-foreign partnerships has been partly facilitated by the rising cost of operating in China. As has been widely reported, manufacturers are now transferring production away from the Chinese mainland to more competitive ASEAN destinations, notably Myanmar.
This move has not been without attendant difficulties. Matthew Friedman, Chief Executive of the Mekong Club, an anti-human trafficking pressure group, said: "Local businessmen and cultures in less developed markets are often not fully aware of the labour practices increasingly expected by global partners and consumers." He cited Nike as a notable example of how a brand can be damaged by failing to comply with global labour standard expectations.
As well as contravening labour laws, there was also growing concerns that SMEs remain vulnerable to IPR violations. Addressing this, Ben Kwong, an Intellectual Property Manager at Can-Pack, a global manufacturer of metallic packaging, said: "Another way SMEs need to protect themselves is intellectually. Apple's iPad trademarking is an example of how things can go wrong if an SME fails to take the necessary steps to protect their intellectual property."
When Apple failed to register its iPad trademark on the mainland, it was subsequently registered by an unrelated individual. This left Apple with no alternative but to buy back its own trademark for a significant sum. Kwong said: "It is particularly important to protect your intellectual property in any location where the product is actually being manufactured."
Another company keen to highlight the benefits of proper legal coverage was Dragonlaw, a Hong Kong-based b2b legal specialist. The company has developed an online legal solution allowing SMEs to format legal documents through the dedicated Dragonlaw app. The SME can select, for example, an employment contract. It then fills in a series of questions that prompt the app to generate a customised document. This solution is said to provides SMEs with readily-available and economically-competitive legal documentation, while protecting the interests of the SME in facilitating the smooth and speedy operation of its business. The documents available range from straightforward employment contracts and franchising agreements, to more complex shareholders' agreements and funding documentation.
Another tailor-made solution came courtesy of the Hong Kong Credit Insurance Corporation, this time in the form of its Small Business Policy, financial cover specifically geared to the needs of exporting companies with an annual turnover of less than HK$50 million. It covers contracts of sale with overseas trading partners and provides insurance that protects SMEs in the event that any of their overseas trading partners defaulting.
Amid this welter of financial and legal instruments, however, the fundamental importance of human capital to SMEs was not neglected. Kruzo Cheuck, a Senior Manager with Kornerstone, a Hong Kong-based training company, said: "People capital is, after all, the premium asset of any company. We have ready-made solutions for SMEs in the shape of our training programmes. SMEs can select a programme which best suits their needs and we will then run that programme, either at the client's workplace or at one of our designated centres."
Overall, judging by the feedback from attendees, the 2014 World SME Expo proved a definite success, bringing together businesses, entrepreneurs and consumers in a a mutually beneficial forum and allowing for considerable exploration of issues of mutual benefit.
The HKTDC World SME Expo 2014 took place from 4-6 December at the Hong Kong Convention and Exhibition Centre.
Marvin Wallace, Special Correspondent, Hong Kong