New Technologies Enhance Franchise Management

10 December 2018 – The fourth HKTDC Hong Kong International Franchising Show and the second edition of the HKTDC SmartBiz Expo, both organised by the Hong Kong Trade Development Council (HKTDC), were held last week (5-7 Dec). This year’s Franchising Show featured more than 130 exhibitors from 13 countries and regions. In addition to showcasing franchising opportunities across different industries, a series of seminars provided practical information to entrepreneurs interested in becoming franchisors or franchisees to help them succeed. A seminar titled “How Technology is Leveraging Franchise Management?” featured industry experts to share how franchised convenience stores, restaurants and vending machines can leverage technology to enhance their management and improve profitability.

Product Variety is Key for Small Convenience Stores
Stories shared by seminar speakers showed how technology can help Hong Kong retailers address one of their biggest challenges – rental cost. Dallas Cheung, Franchise Director, 7-Eleven Hong Kong & Macau, said research has shown that 85% of people in Hong Kong shop at 7-Eleven, which has 959 stores across the city, including 373 are franchisees. This massive group of consumers consists of a wide variety of consumer segments, including retirees, working men and women, and students. Stores in different locations have different target customers.

Mr Cheung shared that the average number of consumers that each 7-Eleven store in Hong Kong services is more than 7,000, “yet the average size of each shop is only about 500 square feet, which makes selecting the right products very important.” He said his company handles more than one million customers in Hong Kong every day, and for the 900-plus shops to serve such an enormous number of consumers, the use of technology to manage inventory is crucial.

All the shops transmit their sales data to a data centre, which then compiles the data for various departments to analyse and help the shops formulate their product strategies, Mr Cheung said. This means that even when the shops are limited in size, they can still accurately match their products with the needs of consumers in different districts and avoid wasting precious space stocking slow-moving items. This will help to improve sales and profitability.

Restaurant Cash Registers Hold Big Business Opportunities
Franchising is a common business model in the food and beverage (F&B) industry, yet operating a restaurant can be a daunting task, and restaurateurs do not always have the time to review their sales data and adjust their strategies. Michael Yung, co-founder of Everyware Limited, said that information technology can be used to resolve this pain point and lead the future development of the F&B and retail industries. He said that, for the F&B industry, the “cash register” is one of the most important tools for conducting business. “Today’s cash registers are no longer limited to calculating transactions. In fact, they can help a company achieve higher returns,” Mr Yung said. “Take an F&B group with multiple franchisees as an example. It used to be difficult to get the latest status of each franchisee, such as turnover, customer traffic and product sales, but with today’s cloud computing, restaurateurs can easily keep track of the data for all franchisees in real time and monitor each restaurant remotely.”

In addition to helping to assess the health of a business, smart technologies can also be used to enhance the consumer experience. Yung anticipates that self-ordering will become a bigger trend in the F&B industry. At present, many restaurants have tablet computers at tables for diners to self-order, while some have set up self-ordering and self-payment kiosks. Yet these business models invariably involve hardware investments. Yung expects that in the future, diners will use chatbots on their phones to place orders and settle payments by scanning the bills with their phones. Throughout this process, from the placing of orders to the settling of bills, all data will be recorded in the cloud to provide restaurateurs with real-time information. Yung described this revolutionary model as the “last mile” for restaurant operations.

Smart Vending Machines Offer New Opportunities for Operators
Sophisticated technologies are also behind the new generation of smart vending machines. Kong Yiu-chi, Product Evangelist of Gritus Technology Limited, pointed out that vending machines are no longer the simple soda machines of the past. His company’s smart vending consoles can support different products, such as snacks and beverages, lifestyle products, toys, and skincare and beauty products. More important than offering product diversity, these smart vending consoles are connecting businesses and consumers digitally. The vending consoles can become mobile billboards that show advertisements and generate additional income for console franchisees. In addition, brands can access data through the cloud to quickly update product pricing and promotions and optimise marketing strategies. They can also analyse the data collected to formulate targeted promotional campaigns.

Kong added that cloud computing can help businesses to get instant market feedback. “Cloud technology makes it easy to monitor the status, inventory and turnover of smart vending consoles. Operations teams can monitor the consoles in real-time and arrange restocking or after-sales services accordingly.” Mr Kong explained that these new technologies will help brands meet customers’ needs by providing personalised services and more engaging experiences. This approach is set to become a new direction in the marketing strategy for vending machine operators.

The fourth Hong Kong International Franchising Show featured four key zones, including the Hong Kong Food and Beverage zone, the Hong Kong Non-Food and Beverage zone, the Chinese Mainland zone and the International zone, displaying franchising opportunities across different sectors. The second edition of the SmartBiz Expo, which was held concurrently with the Franchising Show, attracted more than 520 exhibitors from 40 countries and regions to offer a variety of business solutions and innovative business ideas.

Fair Websites
SmartBiz Expo: www.hktdc.com/smartbizexpo
Hong Kong International Franchising Show: www.hktdc.com/hkifs

Media Enquiries
Please contact the HKTDC's Communications & Public Affairs Department:

Billy Ng         Tel: (852) 2584 4393                   Email: billy.km.ng@hktdc.org

About the HKTDC
Established in 1966, the Hong Kong Trade Development Council (HKTDC) is a statutory body dedicated to creating opportunities for Hong Kong's businesses. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a platform for doing business with the mainland, Asia and the world. With more than 50 years of experience, the HKTDC organises international exhibitions, conferences and business missions to provide companies, particularly SMEs, with business opportunities in the mainland and in international markets, while providing business insights and information via trade publications, research reports and digital channels including the media room. For more information, please visit: www.hktdc.com/aboutus.