We usually say time flies when there has been a lot going on. This best describes the past year filled with many excitements and challenges. The recent global financial turmoil owes largely to the debt crises in Europe and the America’s controversial monetary policy plus its first-ever credit rating downgrade have initiated spontaneous reactions in Asia. It has caused economic unrest, sudden plunge of a number of financial markets, and worry about an economic bubble burst.

For Hong Kong retailers, being supported by some regional and local advantages, we still remain resilient and have been enjoying good double-digit growth for months, with consistently high overall sales value reaching 29% in August compared to same period last year. Individual categories especially those driven by mainland tourists such as jewellery, watches and clocks have leaped by over 50%.

However, we foresee that the number of transit visitors entering HK would very likely be affected due to the increasing direct flights between China and Taiwan, plus the new individual travel program since June 2011 which allows Mainlanders to visit Taiwan as individual tourists.

Figures also showed alarming signs as growth of volume consumption has been unsatisfactory, particularly for daily necessities such as food which registered consecutive months of decrease since February. This indicates that inflation has been increasingly dampening local consumer confidence, causing shrinkage in volume consumption.

The trade would likely face the heat of rising inflation in the forthcoming months. In addition, retailers have to continuously face a number of operating challenges such as surging rental, escalating raw material costs, high staff bills, as well as the falling value of the Hong Kong dollar due to its currency peg.

The Chief Executive’s consultation on the Policy Address and Budget for the coming year already expressed the Government’s serious concerns on a few focused areas namely housing, ageing population and wealth gap. The situation boiled down to a number of structural challenges leading to poverty, high property price, salary increase lagging behind inflation and so on. We are worried as all these caused damage to the unity and harmony in our community.

As 2012 is an election year, we anticipate our new leaders would come up with solutions to resolve the problems and advance Hong Kong as a more stable and prosperous city. While for the Association, we remain committed to devoting continuous efforts to enhance members’ interest and the development of the retail trade in this dynamic market. Now, I would like to walk you through some milestones we strive to achieve in the past year.

Advancing Advocacy Work and Representation

As the Voice of Retail in Hong Kong, we have been proactively engaged in discussion with the Government and policy makers to communicate the concerns of the trade and our members. A lot has been done for the Statutory Minimum Wage (SMW) which took effect on 1 May this year.

Through industry surveys, strategic collaborations with stakeholders and relevant associations, and in-depth discussions with the Labour Department, we kept on pressing the Government to take heed of our serious concerns about the implementation details of SMW as well as its far-reaching business impacts.

We are glad to report that the Government is receptive to our suggestion on the parameters to be used in its business impact studies and ways to improve the methodology of Annual Earnings and Hours Survey (AEHS) which serves as a key reference for the review of the minimum wage rate. We have also lobbied on details of the legislation guidelines and fought for positive changes to the retail industry specific guidelines. To allow our members to stay ahead of the regulatory changes, several briefing sessions were organised with officials and HR experts sharing practical coping tips. These briefing sessions benefited 276 participants from 126 companies.

We have been staying steadfast in urging the Government to extend the Levy Scheme of Plastic Shopping Bags (PSBs), which was imposed on only 4% of retailers since 2007, to all retailers on the grounds that environmental protection is everyone’s responsibility. Our perseverance and members’ efforts in taking the lead to cut PSB usage in a substantial manner had yielded fruition. It is encouraging to learn that the Government finally introduced a proposal in line with our stance. We sincerely hope legislators would finally vote for this visionary plan which aims to build a greener Hong Kong.

Throughout the year, we also advised the Government on a number of legislative issues including the Competition Bill, Legislation to Enhance Protection for Consumers Against unfair Trade Practices, just to name a few. Our work expands substantially across a broad spectrum of policies and regulations that affect not only our members but also the well being of the economy at large.

We believe the betterment of Hong Kong would ensure a business friendly environment and bring prosperity to the economy and our trade. This calls on the Association’s continued effort to increase our representation in the political arena so as to channel views and advance member interests. For instance, we have repeatedly urged the Government to appropriately increase our representation in the Functional Constituency and Election Committee Subsector elections. We think it is logical to have greater representation through these political platforms as our trade grows and prospers, in terms of its contribution and influence in society. Equally important, we encourage our members to register as voters and uphold their voting rights for the upcoming elections.

These attempts enabled us to see deepening relations with policy makers, opinion leaders, influencers and stakeholders, as well as Principal Government Officials whom we held close dialogues through year-round gatherings. Our visibility in the community continued to rise alongside with frequent communication with media editors on different topics of concerns. This is well demonstrated by a good total of 267 media interviews handled in the past year.

On international front, we are keen on supporting a wide array of worldwide and regional industry events. As a key member of the Federation of Asia-Pacific Retailers Associations (FAPRA), we lent support to its 15^th Asia Pacific Retailers Convention & Exhibition to be held in Singapore in October this year.

Stepping up Support to SME Retailers

SME retailers are the backbone of our trade in Hong Kong. Our first-ever SME development project funded by the Trade and Industry Department was successfully completed in the end of 2010 well exceeding our targets. Through a broad array of free services, the programme effectively assisted over 500 SMEs and some 1,000 practitioners, improving their customer service levels and store operation standards.

Recognising our success, the Government approved our new funding application amidst keen competition to support the second phase of the programme which aims at offering progressive and in-depth services, e.g. one-on-one business consultation and advance workshops on diversified topics to meet the practical needs of SMEs identified in the first phase.

A new round of this 12-month programme was launched in May 2011 with overwhelming response. Its kick-off event, the SME Retail Conference, recorded a full-house attendance of about 200 participants. SME Retail Workshops already attracted over 250 participants and we expect hundreds more to come. The Mystery Shoppers Programme was so popular that the 100 company quota has been filled fast. In the coming months, we will roll out more activities to help SMEs enhance their business know-how.

The popularity of our SME projects is a testament that retailers are stronger when they work together and share experience unreservedly. To propagate best practices among the retail trade, the Association will devote itself to developing SME services as a long-term priority. In this way, we can help to uplift the overall competitiveness of the trade and the well being of the economy.

Laying Foundation for Sustaining Retail Growth

Enhancing overall retail professionalism through education and training will certainly remain at the top of our agenda. Our initiative to embark on retail Qualifications Framework (QF) in late 2010 is making good progress. Currently, there are two working groups formed under the Retail Industry Training Advisory Committee (ITAC) which I serve as Chairman. They are tasked to set out the industry’s Specification of Competency Standards (SCS) required at different levels under the QF. The Association is glad to have the support of 20 retail representatives participating in the ITAC and the working groups.

With our concerted efforts, we expect the draft of SCS to be ready in the second half of 2012. By then, we would be having another great leap forward to achieving our ultimate goals of helping our workforce to stay competitive with quality-assured qualifications, as well as working with educational and vocational training bodies to provide diversified learning opportunities and useful work-related skills to students and employees.

The Professional Diploma in Retail Management (PDRM) jointly offered by the Association and the Chinese University of Hong Kong – Tung Wah Group of Hospitals Community College (CUTW) has been progressing smoothly into its second year. Through this course, frontline practitioners can attain the required qualifications for a brighter career path.

Apart from formal education, our many topical seminars and workshops have been helping retail practitioners in specific areas. During the reporting period, we have organized a total of 12 seminars and 24 workshops and received enthusiastic responses from a total of 3,000 participants from over 1,200 companies. Moreover, the participants of this year’s Study Tour to Singapore would have found it a rewarding experience on aspects of customer services tailored for multicultural consumers and team building strategies.

With long-term commitments in manpower training and employment growth, we continued to play a pivotal role in supporting workplace attachment programmes and having representations at the Employees Retraining Board, Vocational Training Council and other advisory bodies. A very noticeable support of the recognition of new 3-3-4 academic qualifications is my involvement in the Education Bureau’s Announcement of Public Information (API) on the Diploma of Secondary Education. By working with all levels of the Government and other stakeholders, we advocate education and life-long learning and at the same time promote career opportunities in retail.

Flourishing Flagship Programmes and Signature Events

Our three renowned award programmes namely Service & Courtesy Award (S&C Award), Mystery Shoppers Programme (MSP) and Hong Kong Awards for Industries (HKAI): Customer Service have gained increased prominence in the trade throughout the years.

The 2011 S&C Award reached a record high participation of 787 nominees, a breakthrough from an already outstanding level surging 25% compared to last year. This Award programme is so popular that new retail categories have been created to cater for different extensions of participating brands, which rose by 17% to 135 brands.

To meet with the market dynamics alongside rapid retail development and in recognition of those outstanding players, the 2011 Service Retailers of the Year under the MSP has introduced some new awards. This year, the situation remains highly competitive, hitting a new high with 168 brands, representing a year-on-year increase of over 18%, and covering a total of 5,558 visits to 4,774 outlets.

As a leading organizer of the Customer Service category of HKAI for years, we have injected new elements into the Award and introduced a wider spectrum of retail categories. As the Award is evolving towards its ultimate goal of attaining service excellence, we are pleased that the participation this year registers an increase of 8% in comparison to last year.

While we applaud the sound results, we feel most exciting about the tremendous influence of our award programmes which have initiated substantial commitment and effort of Hong Kong retailers in enhancing customer service level.

The HKRMA Retail Conference, which marked its third year, has become a signature annual trade forum highly regarded by the retailers. Seeing the encouraging results with prominent speakers, a good turnout of over 600 participations and the many corporate and media sponsors, this conference is surely worth our dedication and hard work.

Our signature event, the Annual Ball, gathers retailers together to share the trade’s success. This year we will use the Grand Hall of the Hong Kong Convention and Exhibition Centre as a larger venue for the first time. I am sure it will be a memorable time with more than a thousand retailer practitioners gathering together and sharing the evening.

On membership, our recruitment programme had been particularly effective in attracting new members from expanded categories. As of 30 September 2011, our membership number reaches a historic record high of 416 companies, covering close to 6,700 outlets and a workforce of over 130,000 people in Hong Kong.

At the end of my reporting, I would like to thank members for your support and participation. Without your commitment, we might not be able to realize our goals for the betterment of the trade and the community. I would also like to thank Mr. Vincent Fang for representing the trade at the legislature and supporting our Association all along.

My grateful thanks also go to our Board of Directors, the two Vice Chairmen and the Executive Committee members for their visionary leadership and devotion, as well as to those who lend their hands in different functional Sub-Committees, Work Parties and Task Forces.

Last but not least, I wish to extend my most sincere appreciation to our Executive Office for their highly efficient and hard work throughout the year.

The future looks both exciting and challenging. The Association will continue our long-standing role as the Voice of Retail and stay committed to unite retailers to drive retail professionalism in Hong Kong.

Thank you.

Caroline Mak