As one of the world’s leading international financial centres, Hong Kong is a familiar name. Characterized by its glitzy skylines and efficiency, Hong Kong has long been a key AV player in the Asia Pacific region. According to a recent report by Hong Kong Trade Development Council (HKTDC), Hong Kong was the world’s second largest exporter of sound recording apparatus, and video recording/reproducing apparatus in 2012. However during January – July 2014, Hong Kong’s total exports of AV equipment has declined by 16%, with lower absorption from China, US and EU.
Although Hong Kong has always been one of the fastest technology adopter in the region, with huge potential to absorb new technology and put it to use, the 2014 democracy protests have affected many businesses across all verticals and its impact can be also felt amongst many in the AV industry. However, keeping up a positive and aggressive attitude is also part of the vibrant Hong Kong culture, so despite setbacks last year, many had remained optimistic about economy growth and look forward to a better year ahead.So overall, how is the Hong Kong AV industry looking? Providing you with the latest insights, we got in touch with some of the key systems integrators, consultants and distributors in Hong Kong to present to you some of the interesting survey results.
DIVIDED VIEWS
Although majority of respondents agreed that there will be growth, about a third of the respondents actually disagreed. Among those who agreed, only 27% were highly-optimistic.
I think that there will be little growth in 2015, with businesses just breaking even or maintaining the same as last year. I say that because AV growth in Hong Kong has considerably slowed down the past few years and I estimate that for 2015 there might be a downturn at around +/-5%. – Cliff Wong, General Manager, CAS Group International
Yes I do, I think growth has been steady for the last couple of years and I see no reason for that to change for 2015. – Ken O’Byrne, Managing Director, LSI
RETAIL LEADS, FOLLOWED BY GOVERNMENT & CORPORATE
We can see that there will be more projects coming from the Government sector, for example, the courtrooms, especially for projector installations. – Alex Chan (CTS), Co-Founder, AVIT
I believe we will see growth especially in the Retail sector, where a lot of paper information like brochures, flyers, will be transformed into digital formats such as Digital Signage. – Alan Tong, Executive Director, i-Control
We think that hospitality has great potential to attract new spending. The rapid growth of this industry in the region has contributed to the increasing demands for AV systems. – Lo Wai-Sing, Senior Vice President, PCCW Solutions
DISPLAYS EMERGE AS WINNER, CONFERENCING SOLUTIONS CATCHING UP
Display solutions emerge as winner, with Audio/Video conferencing solutions catching up. Though less-talked about, but input from the industry about sound reinforcement is something to note too.
As many large scale infrastructure projects are now under construction in Hong Kong/ Macau and will be completed in coming years, we see that these (venues) will create big demands for sound reinforcement systems. – Lo Wai-Sing, PCCW Solutions
Definitely solutions revolving video, such as video conferencing solutions. We are seeing a lot more of that as bandwidth continues to improve, giving better quality, better cost of investment and more reliable experience to users. – Daryl Grove, Global Business Director, VEGA Technology
THE IMPORTANCE OF AFTER SALES & MAINTENANCE
For those who answered Yes, the After Sales & Maintenance service made up an average of 16% of total business revenue.
I think After Sales service is a big part of many integrators because even if you don’t provide it after the installation of project, your clients will find other companies who does, and this is a revenue loss. For us in Hong Kong, getting new business is difficult, so servicing existing clients, gives us a continuous revenue. – Benny Ko, Senior Manager, South China House Of Technology
Although after sales service is not highly regarded in China, in Hong Kong it is a very important part of the business. By providing good after sales service to clients, we can: 1) keep relationship with customer – because when you see them frequently, you can get more feedback and input, 2) it is income – creating a steady stream of revenue for the company, 3) lastly, though many people are not aware, but after service is also important in maintaining the quality of the work you have done. – Alan Tong, i-Control
After Sales service is a growing part of our business and this, is an indication that the customer’s AV usage is growing. This is especially true in big finance organizations where they have such high usage of meeting rooms and boardrooms that they need a team there focused on making the equipments and tools work for them. So that’s definitely a big area of growth for us. – Daryl Grove, Vega Technology
LOOKING TO CHINA
For those who have offices in China, revenue generated by their Chinese market made up about 10 – 50% of their overall businesses.
Besides Hong Kong, do you have businesses/projects in Greater China?
In a poll, “Which vertical market is your main focus in China?”
Many indicated that Corporate is their biggest market, followed by Government and Retail.
When our existing corporate clients here in Hong Kong wants to set up new offices in China, they get us to help them since we already have the blueprint of the AV system they need, hence it’s easier for them to work with us. – Alex Chan (CTS), AVIT
EDUCATING CUSTOMER IS THE KEY, BUT THERE ARE MORE CHALLENGES AHEAD
Most respondents indicated that price-sensitive customers are their biggest challenge, coupled with lack of understanding of their work. But in addition to that, several SIs also presented their own unique challenges.
I would say it’s because of lack of new projects. Because of the protests last year, some government projects and big corporate projects might have affected. As for China/Macau, hospitality has always been the main driver, but we can see that it is slowing down, unlike the peak days of 2012. – Cliff Wong, CAS Group
Due to last year’s political situation (the HK protests), we find it tough getting new projects. As you know, AV is usually under the umbrella of infrastructure, so if there’s no new developments, there is also no new projects for us to do. – Benny Ko, SCHOT
I would say one of the biggest challenge for us will be the lack of time. In the past, projects which take around two months to implement now have to implemented within weeks, and this is especially true for our education clients. – Finson Lam, Managing Director, BAP
We have been proposing the 4K ready solutions to the markets here in HK and Macau for some time now. But whether 4K (or any higher resolution) would be the optimised resolution will be a dynamic decision among technology, content, needs and acceptance of the markets. – Kanny Leong, Executive Director, Media-Go Group of Companies
AV/IT INTEGRATION
All respondents agreed that their AV solutions are required to work within an IT Network Infrastructure for more than 50% of the time.
