Staying competitive in the smart wristband market

Smart wearables, such as intelligent wristbands and watches, are becoming a growing market in Hong Kong.According to a December 2013 report, Smart Wearable Devices: Fitness, Healthcare, Entertainment & Enterprise: 2013-2018 by Juniper Research, the global wearable technology market will grow into a US$19 billion industry by 2018.A number of small to medium smart wristband brands are already competing for market share in the Hong Kong wearables market.As more big-name electronics brands such as Apple, Samsung and Sony start unveiling smartwatches as accessories complementing their smartphones, is there enough space for smaller brands in this market to grow locally? How should the smaller brands market their products to differentiate themselves from big-name competitors?Case #1: FitbitAmerican activity tracker brand Fitbit entered the Hong Kong market last year.Instead of focusing on traditional advertising, the brand chooses to conduct digital campaigns such as social media contests for fans of its Facebook page and bloggers.Sports is also an important focus for the brand – it organises events for sports fanatics such as marathons and distributes its products in retail outlets – selling products that combine sports and lifestyle, such as LOG-ON and GigaSports.Another marketing strategy that has worked well in the US for the brand in the past two years has been to introduce the concept of corporate wellness to the office community.The brand contacted human resources departments of big companies such as Adobe and BP and ran wellness programmes to encourage their employees to do more exercise and keep fit.“This can help build a bigger momentum towards widespread smart wristband usage by creating an ecosystem of partners like corporate clients and consumers who are passionate about sports,” said Yolanda Chan, vice-president and general manager of Asia Pacific at Fitbit.Fitbit conducts e-commerce transactions in the US through its own website, as well as in Japan, South Korea and Australia. In Mainland China, it runs a flagship store on Tmall.It has not yet launched e-commerce operations in Hong Kong, although it may consider doing so in the future.Chan said: “At the moment, consumer behaviour in Hong Kong has shown us that local consumers are not used to buying goods online. They prefer to make purchases in retail stores where they can touch and try out products.”Fitbit plans to expand to India, Taiwan and Indonesia early next year with no plans to open retail stores under its own name just yet.Case #2: Oregon ScientificAmerican consumer electronics brand Oregon Scientific also has smart wristbands on offer.The company markets the wristbands by sponsoring sports events such as the ones run by Action Asia.It also creates crossover campaigns with insurance companies and sleep-related brands, preferring to combine a mix of magazine print ads and social media content marketing campaigns to appeal to health-conscious consumers.On the product differentiation front, Salina Wang, head of Asia Pacific for global marketing and B2B at Oregon Scientific, believes it’s not necessarily better to have the product with the most functions.“People are increasingly lazy, which is why things need to be easy to use,” Wang said.“Sometimes, the more functions your product has, the more complicated it becomes. You simply need to offer the most basic functions, such as recording how many steps you walked today, how many calories you burned and how many hours you slept for.”Is the smart wristband market in Hong Kong saturated?Chan believes most consumers using smart wristbands in Hong Kong are early adopters who are exceptionally health-conscious or sporty. Most consumers think smart wristbands are simply trendy products rather than being helpful to them in their daily lives.The entry of big-name electronics brands and manufacturers into the wearables market, such as Apple with the launch of Apple Watch, indicates it’s just beginning to grow and mature.“Suddenly, big and small brands alike are starting to feel that there is business to be done in this market and they are starting to flood in. When brands like Google, Samsung and Apple are willing to invest in the industry, other manufacturers see it’s worth investing in,” Chan said.She does not see Apple Watch creating extra competition for the brand because they are competing in different price brackets. Fitbit’s wristbands are also compatible with Android phones, which has a significant share of the smartphone market in Asia, and particularly, Hong Kong.For Wang, the Hong Kong market for wristbands will continue to grow as people become more health-conscious and even more companies enter the market.“The Hong Kong market for smart wristbands definitely has potential and the pie and demand will grow as more wristbands become available on the market,” Wang said.“Because not many people are wearing these wristbands right now, there is still plenty of space for the market to grow.”Chan notes that while many electronics brands want to offer a smart wristband in their portfolio of products, they do not necessarily care about other form factors apart from the wristband.“It’s not just another gadget or a mobile accessory. It’s there to help the customer evaluate their own health, like a personal trainer,” Chan said.Wang agrees there are a range of other forms the wristband can take in the future.“Right now, wearables come in the form of watches, cards and glasses, but in the future it could be buttons, earrings, pendants or even belt buckles,” she said.What does it take to make smart wristbands a necessary gadget in the future?Chan sees the sticky factor of smart wristbands lying in a combination of good software and a solid community built around the use of the wristbands.“Smart wristbands will eventually be like computers and smartphones. Whether I use a Dell computer or one made by Lenovo won’t change my user experience that much. But the OS or the platform that I use would have a definite impact on my experience,” she said.“If the software is easy to use and you can easily share information through the platform with your friends to encourage and challenge each other to work out, you can gradually build a community of people using the wearable device.”The idea is the community will keep people returning to the platform and the device because they offer a way to socialise with friends and family.Applications of smart wristbands and watches for the marketing and advertising industriesWang sees enormous potential for wearables such as smart wristbands and watches to be used for brands to promote special offers or incentive schemes.“It can be a pretty good marketing tool, especially with notifications built in. You can even challenge people to share data about their work-outs on Facebook,” she said.[Image]: Shutterstock