While American and Chinese start-ups may not like a crowded limelight, Hong Kongâs very own unicorns (to be) may have a few words to say about that. Entrepreneurs from the fragrant harbour have built their brands with practically nothing, and successfully disrupted their industries with nothing but elbow grease and out-of-the-box insights. Carlos Bruinsma talks to three of Hong Kongâs leading start-ups to investigate what big brands can learn from the underdogs.
Hong Kong has long been a financial and entrepreneurial capital, both in the region and on a global scale â and it shows. One of the leading narratives in the city is the classic ârags to richesâ story, or perhaps more appropriately, âbootstrapper to billionaireâ in todayâs day and age. And when start-ups from the West (and just across the border) started becoming US$1 billion ventures, Hong Kong naturally couldnât be left behind.
But there is a bit of a disconnect. For a city famed for its financial acumen, funding and lodging for aspiring brands and young entrepreneurs is still surprisingly sparse.
Of course, the situation has improved (as evidenced by the interviewees below), but astronomical rent, a conservative market with strong established players and logistical hurdles can all be near-insurmountable roadblocks to would-be ventures.
Which begs the question: how did some of Hong Kongâs most successful start-ups (notably shared economy transport platform GoGoVan, e-commerce fashion label Grana and the bone-conducting phone ring ORII) build powerful brands with practically nothing â and in Hong Kong, no less?
In a nutshell, âbootstrapping as much as you can!â ORIIâs Kevin Wong believes, but quickly notes itâs an involved process which requires constant learning, re-evaluating and more than a little bit of grit.
James O, co-founder of GoGoVan, agrees wholeheartedly: âThe magic is in making the best of very limited resources.â
Luke Grana, the eponymous founder of the e-fashion sensation, deliberately chose Hong Kong over his native Australia, and even found it to be preferable to other start-up hubs such as San Francisco, Singapore or Shanghai.
âI wanted to get a distribution centre and ship direct to customers, so I wondered âwhereâs the best place to do it?â I looked at existing business models, and looked at the UK and the US, but ultimately settled on Hong Kong. The key reason being that itâs the worldâs largest air cargo hub,â he explains.
âAt the beta launch we shipped 3,000 shirts in three weeks, shipped to eight markets and that was the proof point that we could make the business work.â
Approximately zero brands open their doors with a billion dollars in their pockets, and scaling up by growing or capturing a market is perhaps one of the biggest challenges in business today. And while every marketer has surely had the issue of a less-than-ideal budget to start tackling this monumental task, especially in todayâs marketing environment, having almost no money at all is an entirely different challenge.
Even in 2018, the backbone of any marketing campaign is ultimately the humble ad â but every placement costs money, and in a city where even online marketing real estate can burn holes in the biggest of wallets, bootstrappers are forced to improvise.
GoGoVan is best described as a transport hub based on a shared economy â drivers with vans and trucks make themselves available to customers and clients looking for quick and easy transportation of goods.
Hong Kongâs delivery and transport market has traditionally been very fragmented with a large number of freelancers and small companies that were hard to find and vet.
GoGoVan collected these drivers and gave them a branded platform to offer their services, where customers would automatically be matched up with a driver that best suited their needs.
While it shares some similarities with Uber and Lyft, it proudly stands on its own two feet and filled a large gap in the market. But that doesnât mean people will actually sign up.
âIn the beginning we went purely local,â GoGoVanâs O recalled. âWe were running through different car parks and we told them about our service, and told them itâs free and they can make more money,â he continues with a smile.
ORIIâs Wong and his co-founders had a similar experience â if you canât do marketing through expensive ads, you have to market it yourself. And, seeing as direct sales were nearly impossible due to the product being a prototype in its initial phase, it came down to building awareness.
Building a brand from scratch, with no scratch âOur product is a bit weird,â Wong explains. âI frame it as, âunknown problem, unmet needâ. And if I market it to you without you ever having been exposed to it â it doesnât make a ton of sense.
âWe learned that the most important things at the beginning are the things you cannot scale. Building a community, for us, was literally talking to people and getting them to try our product.
âSo every week, almost every day, weâd lug these units around and got as many people as possible to try them. And then itâs about keeping in contact with them â giving them updates, asking for feedback.â
And in all fairness, the ORII ring is a tough sell if you havenât tried it. The ring-like device connects to your phone like a bluetooth headset, and answers phone calls at the touch of a button. Then, the user simply presses their finger onto their ears, and through the magic of bone conduction, can fully converse without ever picking up the phone or having to connect bulky headsets â and in the future, the ring will even read out your texts.
Forgive the anecdote, but I was sceptical about the actual functioning of the device, having previously only read about it on the internet, but trying it quickly changed my perspective â and turned me into a future customer.
For an entirely new line of product that revolutionises the way we interact with our smart devices, demonstrating what it can do seems like a no-brainer, but even with more conventional products â such as clothing â actually trying it on can be the difference between a consumer and a customer.
For example, Grana believes in its products, and much like its counterparts in ORII and GoGoVan, it believes with fervour.
âOur proposition is quality, finding quality fabrics in modern styles and offer that at a very fair and low price point,â Grana explains. âAnd what weâve done well is communicating that.â
Grana has organised a number of pop-up shops to get people to try on the clothes, then order them online. And the concept was a hit â such a hit, in fact, that it now has a permanent retail concept built around the idea.
Grana was conceived as a purely online fashion label to avoid additional overheads, which by all accounts has served the brand very well, but ultimately clothes are a tactile experience â and to compete with the best, you need to convince people to try them on.
âA really good playbook that we learned was doing these pop-ups with events and then matching that with influencers and online ads and creating a lot of hype and interest in a small local community. Weâre still tweaking the model, but the hyper-local marketing activities works well.â
Weâre still tweaking the model, but the hyper-local marketing activities works well.
The pop-up shops initially served as the sole physical touch-point, but Grana has recently opened permanent locations that feature all of its products for customers to try on, after which they order them online.
The difference between the Grana dressing room and a conventional high-street fashion shop is that it doesnât aim to be a retail outlet, but a marketing tool to provide customers with an experience that funnels them into the e-shop.
But, of course, not everyone is keen to simply try something and proceed to purchase.
Marketing, as we all know, gets a little more involved than that, and a brand is infinitely more complex than simply saying âwe make cool stuffâ.
Communicating value â and values
GoGoVan has already inspired a number of competitors, as with any brand with any modicum of success, but it continues to lead the pack.
Having a strong background in agencies such as McCann and Ogilvy, O puts it down to a number of factors, but front and centre is the brand.
âMaybe Iâm biased because of my background, but I really believe in the power of a brand. Everyone can copy, so we really needed to create a brand from zero. Itâs a little bit intangible, but itâs our task as marketers to communicate and tell people that these intangible things bring business impact. For example in Hong Kong, itâs almost a buzzword now â GoGoVan, GoGoAnything!â he says with a laugh.
But it starts with culture, and our culture is based on shared values
âBut it starts with culture, and our culture is based on shared values such as âdare to ventureâ and âno evilâ.â
Grana agrees, and emphasises the importance of going beyond creating a desirable product.
âWhen talking to customers on the floor and in the changing rooms, I landed on the fabric origin stories. Gen Y, millennials, they want stories,â Grana explains.
âThey want products with purpose â and I learned that thereâs a trend about going back to basics, back to quality basics.â
For ORII, the brand is similarly all about transparency and solving problems, and as with Grana, its product goes far beyond the âcoolâ factor.
Gen Y, millennials, they want stories.Â They want products with purpose â and I learned that thereâs a trend about going back to basics, back to quality basics.
The ring actually has its origins in accessibility, and making screen-based devices more accessible for those who struggle to interact with them, such as the visually impaired. âThe idea came from a lot of my dadâs work,â Wong says.
âHeâs been blind since 13, so itâs been more difficult for him than most to use touch-based devices. So we went about creating a product that could address this problem.â
His father actually played an instrumental role in creating the first voice-based computers to facilitate the visually impaired using computers in the eighties and nineties, and Wong explains the ORII ring was heavily inspired by that.
Moreover, they faced a lot of scepticism from the online community, which required extensive communications to address and build trust.
Glocalisation and the power of grassroots
In terms of actual marketing strategies, all three start-ups agree on the importance of creating reach with the right audiences, especially when you scale beyond a single market. âItâs about creating grassroots,â Wong says.
âThose early fans â including celebrities, but that was organic, as they paid for the product â created a lot of YouTube videos, Instagram posts that was worth a lot in terms of audience and coverage. But really, grassroots are at the centre of it all [for ORII]. When someone tries our product, most of the time they will tell someone else about it.â
It kept this going with live-feeds and extreme transparency â inviting questions, handling questions and showing them â live â what the product looks like and what it can do.
For Grana, creating its own brand ambassadors was a priority as well. It turned its customers into a de facto sales team by stimulating enthusiasm among its existing customers, and then giving them discounts for referring their friends. A fairly cut-and-dry referral programme for marketers on paper, but the numbers are impressive. Some 10% of new customers are referred through the programme by friends and family.
Moreover, it recognised its target audience â the highly coveted millennials â would have to be reached in non-conventional ways.
A series of âmicro-influencersâ were chosen over more established social media stars and celebrities, largely because these influencers are far more likely to become genuinely excited about the product, creating a snowball effect of enthusiasm among their followers, who might refer people in turn. In a nutshell, itâs word-of-mouth marketing dialled up to 11.
âWe targeted local influencers that had an affinity with the brand â that believe in the values and the quality of the brand and the price point, and weâd start working with them. They werenât paid, weâd just send them the product and theyâd provide feedback and start posting and that really helped to build awareness,â Grana says.
[Influencers] werenât paid, weâd just send them the product and theyâd provide feedback and start posting and that really helped to build awareness.
When GoGoVan started to expand, the team quickly realised that to emulate its success in Hong Kong, it would need to approach things from a similarly local lens.
âWe believe in global-local â and the local part is very important â for every city we expand to we need a local person in charge. Second, to maintain a consistent and memorable brand.
Visually is a key point, but consistency and having something that communicates your personality is very important,â O says.
âThereâs a lot of effort in educating customers in different cultures and cities about the service, like âhey, you can move your stuff by simply moving your finger!ââ he says with a grin. Thatâs not to say these founders entirely eschewed more traditional marketing practices â Grana even freely admits he intensely studied big fashion brands to learn where their strengths and inefficiencies lie.
âOnce Iâd made the decision, I wanted to get some experience, so I worked at Zara for three months, and then at French Connection for three months â just learning the business models, price points, styling. But also learning how traditional business models operate, and thatâs where I started building myself a business plan for Grana.â Grana says.
And for the boys from ORII, a strict budget meant no large ad campaigns. So they turned to PR, but hiring an agency wasnât exactly on the table.
âYou need people to write about you, and preferably in a positive way! We didnât really have the money for professional marketing services, so we just hunted them down! One time, I actually cornered one journalist in a nightclub,â Wong says with a laugh.
Perhaps most importantly, though, they all independently made it very clear that what really put them on the map was simple transparency.
From addressing scepticism and technical concerns in real-time through live chats on various internet platforms over many late nights for ORII; to a complete insight into the design, manufacturing and sourcing process with trusted influencers for Grana; and talking to customers and drivers on an ongoing basis to ensure customer satisfaction at GoGoVan; they all made sure that honest, open communication between brand and customer was at the heart of their brands.