Four fast facts from our latest Hong Kong RPI study

The key issues that drive Hong Kong’s shoppers to choose one grocery store over another have been revealed on May 3rd, with the publication of the latest study in dunnhumby’s international research programme – the Retailer Preference Index (RPI) Series.

Since 2018, dunnhumby has published numerous RPI studies covering APAC countries including Japan, Australia, Thailand, and Singapore. This latest study, which focuses specifically on Hong Kong, provides in-depth analysis of both the factors that influence shopper preference, and the market’s best-performing grocery retailers.

With that in mind, here are four fast facts from the study that hopefully will convince you to read the full report!

Hong Kong’s shoppers seem comparatively loyal – but appearances can be deceiving

One key metric that we use as part of our RPIs is what’s known as the Loyalty Index; the higher a country or region’s score, the more loyal customers can be said to be. On the surface, Hong Kong – with a Loyalty Index score of 2.6 – seems to perform much better in this respect than neighbouring markets like Singapore (1.9) and Thailand (1.6).

When we look a little deeper, though, it becomes clear that the score alone doesn’t tell the whole story. In reality, loyalty in Hong Kong is heavily skewed by three stores in particular: Wellcome, PARKnSHOP, and HKTV Mall. Shoppers are much more loyal to these retailers than any others, leading to a Loyalty Index score that isn’t quite what it seems.

The more balanced your value proposition, the more that shoppers spend

Finding the right balance between quality and price is one of the biggest challenges for any grocery retailer. Too far either way, and you risk alienating a significant part of your customer base. And in the results of our new study for Hong Kong, we can see that there is a measurable commercial impact in getting that balance right.

When we look at each retailer’s Share of Wallet results, we see clear evidence that shoppers spend more with those who have a strong price:quality ratio. Share of Wallet falls a little for those with a good price:quality ratio, and considerably for those with a poor one. What does this tell us? Your value proposition isn’t just a matter of perception; it has a clear impact on how much your customers will spend with you, too.

Online grocery is a huge growth opportunity

Hong Kong’s ecommerce industry is already well developed, particularly so when compared to many Western markets; 74% of respondents say that they’ve bought goods online. At the same time, we still see clear room for growth – particularly for those retailers who can step up to deliver more of what customers really want.

When compared to neighbouring markets like Thailand and Singapore, ecommerce penetration in Hong Kong is relatively low. That, combined with the fact that no single retailer seems to give online grocery shoppers everything they need just yet, suggests that there’s still room for a real market leader to emerge.

Hong Kong’s loyalty programmes warrant additional scrutiny

In line with their name, loyalty schemes are meant to help retailers develop a deeper bond with their customers – typically through greater insights and personalised rewards. Looking specifically at Hong Kong’s Moneyback and Yuu Rewards programmes though, something seems to be preventing that connection from taking place.

Emotional Connection – one of the key metrics in our RPI programme – measures the strength of feeling that customers have towards a retailer. For A.S. Watson and Dairy Farm-owned retailers like Fusion, PARKnSHOP, and Wellcome, Emotional Connection scores for cardholders are actually much lower than for non-cardholders – a highly unusual result.

Read the full Hong Kong RPI report if you want to find more in-depth insight into the issues above, as well as:

• A breakdown of the region’s highest ranked retailers, as measured by Share of Wallet, Market Share, and Emotional Connection.
• Analysis of the key “Preference Pillars” – overarching issues that influence where customers decide to shop.
• Comparisons between the RPI results for Hong Kong and neighbouring markets including Korea, Thailand, Singapore, and Japan.
• A discussion of the impact of Covid-19, and the long-term implications for Hong Kong’s grocery retailers.