Hong Kong In-Market UpdateIn partnership with Austrade and

Wilson Foods Group

Supporting your business. Advice. Know-how. Connections.

The webinar will begin at 11:00am

Department for Trade and Investment

Overseas Update Webinar SeriesHong Kong

Alice JimSenior Business Development Manager – South AustraliaHong Kong, Macau and South China Australian Trade and Investment Commission

23 April 2020

Welcome to Hong Kong

HK – a substantial trade & investment partner for Australia in its own right• Important entrepôt for Mainland China with global markets

• Approx. 65 % of mainland outbound investment flows through HK

• Presence of mainland investment offices & MNCs with regional headquarters

• 12th largest FDI in Australia and 5th largest (total stock investment)

• Commercial interests - premium food and agriculture, renewable energy, health & medical, aged care, tourism infrastructure, major infrastructure, disruptive technologies, smart cities, international education

• Crucial role in Beijing’s Greater Bay Area plan • International finance, transport, trade, aviation, inno & tech hub

South Australia & Hong Kong HK investments in SA

• Utilities, aviation & training, mining & energy, hi-tech, education, freight & logistics, tourism infrastructure, retail /trading, agribusiness, real estate, construction & engineering, financial services, health & medical

HK is 7th biggest destination for SA investments by no. of projects (2019)• SA businesses present in HK operate across wine, education, professional services,

freight & logistics, Hi-tech, cosmetics

• South Australia to HK – Merchandise Trade A$261 mil 2018-19 (3.6% yoy growth)Biggest exports - wine, petroleum, seafood

• Top 3rd source of international students2,040 HK intl student enrolments in SA (2018-2019)

• 18,000 HK tourist visitors into South Australia7% of Australia ( 2018- 2019)

Current Market Conditions – Hong Kong• 21 Jan 2020: 1st imported case

• 21 Apr 2020: 1029 cases (4 fatalities, 629 recovered). 2nd wave transmission easing

• Outbound global travel - Red alert (except Mainland & Taiwan)• International Freight Assistance Mechanism (IFAM) • International Aviation Network- Qantas & Virgin Australia operating commercial

passenger flights to repatriate Australians back home from London, Los Angeles, Hong Kong and Auckland

• Cathay Pacific – 3% flight schedule in April 2020

• Inbound Travel restrictions• Denied entry to HK by plane for non-HK residents & those from Mainland, Macao

&Taiwan who have visited overseas in past 14 days, extended indefinitely• All transits HKIA suspended & extended indefinitely • All inbound travelers require virus test & 14-day compulsory quarantine

Current Market Conditions – Hong Kong• Cross-border crossings to the Mainland

• Mainland authorities have suspended processing of business visit endorsements

• All land boundary control points closed exceptShenzhen Bay & Hong Kong-Zhuhai-Macao Bridge open

• Temp suspensions of public transport to Macau & high-speed rail train to Mainland

• HK flights to Beijing, Shanghai, Chengdu & Xiamen

• No complete lockdown so far• Temp closures of pubs, bars, clubs, leisure & entertainment venues, beauty salons till 7 May Public

gatherings restriction to 4 people indoors & outdoors till 7 May • Restaurant diners limit to 4 per table, 1.5 m distance apart between tables • All Schools & education institutions remain closed • Most conferences / tradeshows/larger-scale promotional events cancelled /postponed • HK Govt and private enterprises adopting WFH & shifts

Impact on Hong Kong economy • Coupled affects by Sino US – China war, social unrest, Covid-19 pandemic

• Worse than that of SARS epidemic in 2003

• HK Air traffic dropped 90%,Cargo remain busy • Aviation sector - 10.2 % to the city’s GDP

330,000 jobs , 146,000 jobs at risks

• Tourism hardest hit• 3.49m visitors Q1 2020, down 80.9 % YoY• Arrivals plummeting 99% in March, unprecedented historical low

• Retail sales - record decline 44 %( Feb 2020)• Luxury Segment most battered. Supermarket sales ose 11.1% YoY (Jan & Feb 2020)

• Unemployment rate 4.2 % (Jan to Mar 2020), a nine-year high from 4% then• Consumer & tourism related 6.8%, Food & Bev 8.6%, Construction 8.5%

• Financial system in good order & anticipates growth average 2.8 % per annum 2021 to 2024• HK’s institutional strengths & core competitiveness are unscathed

Hong Kong Gov Relief Programs

• The pandemic is now affecting almost all sectors in the economy

• Government’s relief programs cover all enterprises & address their critical pain points

• Total of HKD287.5 billion (USD36.9 billion) about 10% GDP • HKD120 billion relief package in 2020-21 Budget • HKD30 billion Anti-epidemic Fund• Further HKD137.5 billion relief package

Food & Beverages - Hong Kong • Top SA food & wines export to HK 2018-2019 by value:

1st Wine - Red 91.5%, White 7%, Fortified 0.6%, Rose 0.15%,Sparkling 0.8%

2nd Seafood - Abalone 63%, Other shellfish/molluscs 17.5%, Lobster 14.4%, Oysters 3%

3rd Fruit - Citrus 74%, Stonefruits s11%, Table grapes 10%, Cherries 3.5%

Processed food - Lamb 24%, Chicken meat 16%, Mutton 11.6%, Beef 10.6%

• Food supply heavy reliant on imports (over 95%)• Imported fresh food prices surged & continue amid the significant

disruptions in passenger commercial flights, space in cargo flights very competitive & expensive

Food & Beverages - Hong Kong • Foodservices

• People stay away from restaurants & public places (except supermarket & pharmacies!)• Visitor arrivals record 65.1 mil in 2018. 99% drop in Feb 2020 YoY• 1,000 restaurants have closed since June 2019, 1,000 to close in coming 2 months• Unemployment rate Food & Bev 8.6%• Michelin-starred/Hotel restaurants –dine-in discounts, takeaway menu, home delivery• Importers lost up to 90% foodservice business

Food & Beverages - Hong Kong • Retail & Online/e-commerce

• Supermarket sales rose 11.1% YoY (Jan & Feb 2020)• Prices surged • Home dining mode (retail packaged)

• Bare essentials & mass price (rice/pasta, meat, fruits& vegs, dairy, seafood )• Healthy/functional foods• Frozen/more durable foods • immune boosting, supplements

• Home delivery channels • Deliveroo, Foodpanda, Uber Eats surged in orders• Deliveroo - Q1 2020, 1500 eateries signed up., orders doubled• Invested HKD10mil (US$1.29mil) to set up a common kitchen where restaurants cook their

takeaway meals (“ghost kitchen”)

Food & Beverages - Hong Kong Upcoming key food tradeshows:

• HKTDC Food Expo 13-15 Aug 2020

• Natural & Organic Asia 1-3 Sept 2020

• Restaurant & Bar Show & Gourmet Asia 1-3 Sept 2020

• Asian Seafood Expo 1-3 Sept 2020

• Asia Fruit Logistics Sept 2020 (SG)

• Hong Kong Wine & Dine Festival 29 Oct - 1 Nov 2020

• Hofex 18-21 May 2021

Wines - Hong Kong • SA‘s 4th largest export destinations – total value

(1st China , 2nd UK, 3rd Singapore, 4th HK)

• SA wine exports to HK Mar 2019-Mar 2020 :-Vol down 15%, Value down 13% - No. 1 in Average A$/Litre FOB –A$29.21

(Red A$31.41, white A$11.37)

• SA wine exports to HK 2018-2019 /value:Total A$92,540,922• Red (91.5%)• White (7%) • Fortified (0.6%)• Rose (0.15%)• Sparkling (0.8%)

Wines - Hong Kong • Bars, pubs offering discounts when reopen

• coupons, home canned cocktail serving kits• 90% drop in foodservice & corporate clients, move inventory

to private customer (discounts, delivery platforms,1/2 bottles)• No change in wine prices observed in retail • Tastings, corporate events cancelled • Locals @ Homebound – daily drinking wines up (HKD200-600/bottle)• Fine wine market shrinking • Channels : Retail, private customers, online, home deliveries • Virtual wine tastings/dinners/masterclass – B to C

• Upcoming events• SA & HK Virtual Wine Forum (Jun 2020) • Vinexpo HK 8 to 10 July 2020 (B2B)• Restaurant & Bar Show 1 to 3 Sept 2020 (B2B)• HK Intl Wines & Spirits Fair Nov 2020 (B2B, B2C)• HK Wine & Dine Festival late 29 Oct to 1 Nov 2020 (B2C)• Pro Wine 18-21 May 2021 (B2B)

Vinexpo HK 2018

Education Hong Kong • HK University admission exam HKDSE commencing on 24 April,

results announcement in July 2020

• Intl exams such as IB & IGCSE cancelled Concerns on new admission requirements IETLS papers cancelled

• Education agents concerns:• Border restrictions (Foundation bridging programs in-take Oct & Nov 2020)• Parents concerns safety and discrimination in Australia• Home Affairs advice - overseas student to reconsider applying for student visa –

online education only require “condition of offer” from institutions ) • Virtual tours/online seminars for students/parents - Not always effective,

physical events highly preferred

• Australian institutions needs to upgrade online delivery systems and consider virtual student recruitment initiatives. New mode of imparting education in future.

Hi-Tech Hong Kong • Locally developed smart wrist band for home quarantine surveillance

• Researches using e-payment to study transmission patterns of the coronavirus & movements of residents to identify the risk of infection in districts ( big data analytics)

• Robots & new technologies become mainstays in malls & offices reduce human contact & cost living in long run (robot cleaning machines, Nano-fotocide Photocatalytic Oxidation Technology, thermal-cameras, smart washroom system, automatic ultraviolet handrail steriliser for escalators)

• Soaring demand for Digital Health, Telemedicine/E-consultation

• Fintech /e wallets -PayMe, Wechat Pay, AlipayHK, PayMe,Tap & Go,TNG Wallet, O!ePay, Apple Pay, Google Pay, UnionPay / QuickPass-Usage increase but lacking security confidence

• Rise of remote working software ,e-learning, telemedicine, social media expose to whole new risk in cybercriminals (Phishing , DDoS attacks ) Over 131% increase in viruses detected YoY in March 2020

What you need to do• Maintaining sufficient liquidity & protect your employees

• Monitor leading indicators of how and where the pandemic is evolving and conduct scenario planning domestically and in your overseas markets of interests

• Establish preparedness strategies (e.g. business continuity, workplace technology advancement, digital transformation, crisis & emergency response)

• Time for survival, staying competitive and not profit-making

• Leverage financial relief programs offered by federal and state government and private entities

• Potential cross – industry partnerships with complementary product offerings

What you need to do• Maintain ongoing communications with in-market partners & stakeholders

• Exchange latest in supply chain capability & challenges, market insights, industry and end-customer trends, freight & logistics

• Collectively devise new win-win promotional campaigns, product offerings, pricing and distribution strategies

• Support your local partners • Be responsive and delivery on time amid remote working & reduced manpower • Enhance brand positioning, maintain & expand market share

• Organize interim digital/social media promotional campaigns(e.g. online store, digital catalogues, products & service marketing via livestreaming )

• Seek support from South Australian Department of Trade and Investment (DTI) and its overseas in-market representatives for latest market intelligence & business opportunities, export services support, upcoming promotions and business missions

Preparing for Recovery• Monitor schedules of local key conferences, events and tradeshows, plan for participation

• Digital transformation – business operation, marketing & communications, product/services

• Deepening pandemic across the globe suggests an economy recovery may not come in near term. Plan for series of in-market promotions / activities upon signs of market recovery to stay competitive and win over market share

• Continued monitoring of all relief and assistive programs and financial funding available on federal, state and industry levels

How DTI can helpDTI Greater China Office

Shanghai Ms Xiao-Ya WEI E: Xiaoya.Wei@austrade.gov.auMr Javen LI E: Javen.Li@austrade.gov.au

Jinan Ms Fion JIA E: fion.jia@sagov.orgMs Jing LIU E: jing.liu@sagov.org

Guangzhou Ms Joie LIANG E: Joie.Liang@austrade.gov.au

Hong Kong Ms Alice JIM E: Alice.Jim@austrade.gov.au

DTI Adelaide China Desk

Ms Junfeng ZHU Manager – Greater China Operations Department for Trade and Investment, South Australia T: +61 (8) 8303 2458 E: Junfeng.Zhu@sa.gov.au

Mr James SUNMarket Development Officer - Greater China Department for Trade and Investment, South Australia T: +61 (8) 8303 2302 E: James.Sun@sa.gov.au

Hong KongFood and Beverage Sector Overview23rd April 2020Presented by Timmy Lau

Business Development Manager

Austrade Hong Kong and Macau

• Open and dynamic economy

• GDP decreased by 2.9%, the fourth quarter of 2019. Decrease of 2.8% in the third quarter of 2019

• Unemployment rate increase by 0.5% to 4.2%. 8.6% in catering industry

• Tourist arrivals plunged by 96.4% year-on-year in February to 199,123 visitors, compared with a 52.7% drop in January 2020

Economic Data for Hong Kong

22Hong Kong Food and Beverage Sector Overview – April 2020

• (I) Requirements on all Premisesa. Service area must not exceed 50% of normal seating capacityb. Tables 1.5m apart or effectively partitionedc. No more than 4 persons each tabled. Must wear mask except when eating/drinkinge. Screen body temperaturef. Provide hand sanitizer

• (II) Other requirementsg. Suspend karaoke and mahjong-tin kau activitiesh. Any premises (commonly known as bar or pub) that is exclusively or mainly usedfor the sale or supply of intoxicating liquors for consumption in that premises mustbe closedi. Any part of a catering business premise that is exclusively or mainly used for thesale or supply of intoxicating liquors for consumption in that part must be closed

Prevention and Control of Disease (Requirement and Directions) (Business and Premises) Regulation

23Hong Kong Food and Beverage Sector Overview – April 2020

Impacts on Foodservice Industry

24Hong Kong Food and Beverage Sector Overview – April 2020

• Value of sales of commodities in supermarkets increased by 12.2% in February

• Stay-at-home economy

• Eating and cooking at home

• E-commerce

• Online shopping

• Food delivery platforms

• Spike in demand for staple food: rice, noodles and cooking oil, instant food, egg, tinned food, and meat/poultry/seafood in retail pack

New Trends in Hong Kong

25Hong Kong Food and Beverage Sector Overview – April 2020

• International Freight Assistance Mechanism (IFAM) - to help restore critical global supply chains for premium Australian agricultural and fisheries producers, who have been heavily impacted by COVID-19 containment measures around the world

• Key export focus sectors are seafood, dairy, red meat and horticultural goods

• Four departure hubs in Australia: Sydney, Melbourne, Brisbane and Perth

• Deliver to markets such as China, Japan, Hong Kong, Singapore, Taiwan, The Middle East

• International Aviation Network - additional freight capacity

• Air freight capacity provided by Qantas, Virgin Australia and others

• Current flight destinations available include Auckland, Hong Kong, Los Angeles and London

• For further details:

https://www.austrade.gov.au/news/news/international-freight-assistance-mechanism

https://www.austrade.gov.au/news/news/novel-coronavirus

Air Freight Arrangements

26Hong Kong Food and Beverage Sector Overview – April 2020

• Domestic network flights – get produce to air freight departure points

https://minister.infrastructure.gov.au/mccormack/media-release/federal-government-guarantees-domestic-aviation-network

Along with some internal SA flights (Kangaroo Island, Port Lincoln, Whyalla), there are the following flights for the next 8 weeks:

• 7 Qantas flights from Adelaide to Melbourne

• 7 Qantas flights from Adelaide to Sydney

• 3 Virgin Australia flights from Adelaide to Melbourne

• For additional Government support visit business.gov.au

• For market insights and latest updates visit Austrade’s Covid-19 page

Air Freight Arrangements

27Hong Kong Food and Beverage Sector Overview – April 2020

Department for Trade and Investment

Overseas Update Webinar SeriesHong Kong – Food & Beverages

Industry Guest Speaker

Ringo Wong DirectorWilson Foods Group

23 April 2020

Founded in 1977 by Mr. Banyon Wong

100% Family Owned

Market Leading Brand Builder and Marketer

Diverse Food Solution Provider

Worldwide Sourcing Capabilities

Key Facts

GROUP MISSION

Provide Food Solutions in a

cost-effective way Innovative Food

Products and

Solutions Provider in Asia

Provide

personalisedfood servicesand build

lifelong partnerships

WILSON CORE VALUES

TIMELINE

2017Wilson Foods Solution

1977 1990 1991 2000 2006 2008 2009 2011 2013 2014 2017

1977Wilson International Frozen Foods (H.K.) Limited

1991Wilson Foods Intertrade Limited

1990Glee Foods Industries Limited

2000Well Ocean Foods (Shanghai) -(Formerly Shanghai Representative Office)

2006 - Wei Sheng Co., Ltd (Chengdu)- Gourmet Online Limited

2008Wai Shing Co., Ltd(Chongqing)

2009Sens Wine Cellar

2011 Wilson Fine Foods

2013Xport Foods International

2014 Xport Foods Europe

WILSON FOODS GROUP

Purchase directly from

farm & factories

WHY WILSON ?

Value Add From Wilson

Sales Distribution

Logistics Food Processing

Product Re-engineering

Research and Development

Marketing Local Knowledge

Cultural Understanding

Rich Experience Established Network

Quick Decision Making

Quality Control Cross Merchandising

Customer Relationship Management

Foodservice

Retailers

Sub-distributors

Consumers

WILSONdistributes to

AGENCY BRANDS

• Sub-distributors • Hotels • Clubhouses • Restaurants • Café & Kiosks • Fast Food Chains • Airlines • Caterers & Canteens • Supermarkets • Gourmet Shops & Online ShopsOUR CUSTOMERS

Ladies' Recreation Club

OUR CUSTOMERS

LOGISTICS & STORAGE

Our own

refrigerated trucks: 17

WILSON LOGISTICS

PLUS our partnership with

Kerry logistics to meet the vast demand from our customers

Cold store capacity:

260,000 cartons/ 10,000MT

Location:

Kwai Chung

LOGISTICS PARTNERSHIP

MARKETING & EVENTS

First International Launch

of Hoengseong Korean Beef

Press Conference

HOENGSEONG HANWOOLAUNCHING CELEBRATION DINNER

Korean Abalone Chungsan Bada

EVENTS KOREAN WANDO COUNTY EXCLUSIVE VIP DINNER

Korean Celebrity ChefMr. Nam Sung Yul

&

EXHIBITIONSHong Kong HOFEX

EXHIBITIONSShanghai FHC 20192019 Restaurant & Bar Hong Kong

USMEF & WILSON FOODS

SPONSORSHIPSThe 243rd Anniversary Of U.S. Independence In 2019 The Great American Texas BBQ 2019

2019 Quanlligraphy Exhibition Organised By Legacy Academy

SPONSORSHIPS & EVENTSTVB Hong Kong Supporting Concert Supermarket Event Korean Hoengseong Hanwoo

SUPERMARKET DEMONSTRATION

TV BROADCAST

Big Boys Club

Big City Shop Scoop

Eat Well MomFun Abroad

SOCIAL MEDIAUK Iceland Supermarket Online Store In HKTV mall

SOCIAL MEDIABig Big Shop Online Shopping Partner Gourmet Online Food Store

THANK YOU

• www.wilsonfoods.com.hk

• www.wilsonfoods.com.cn

• www.gourmet.com.hk

• www.sens.com.hk

• www.sens.coffee

Q & As

Alice JimSenior Business Development Manager – South AustraliaHong Kong, Macau and South China Australian Trade and Investment Commission

Department for Trade and Investment

Thank you for attending.

We hope you can join our next Webinar on 24 April at 2:00pm for the India in-market update, featuring guest presenters from Austrade and Amazon India.

Visit https://dti.sa.gov.au/webinar-series soon to view the video recording and summary of questions.

Further enquiries:Ashleigh RidleyDepartment for Trade and Investment Ashleigh.ridley@sa.gov.audti.sa.gov.au