Tag Archives: hong kong

Hong Kong Agencies: Go Big or Go Small?

From a business perspective, Hong Kong sits in a unique spot in Asia. Traditionally where East meets West, Hong Kong continues to serve as an important regional hub for international companies working across Asia-Pacific . At the same time, Hong Kong itself is a wealthy, cosmopolitan city with ample opportunities for profitable local projects. Marketing agencies in Hong Kong increasingly face a choice: do we cater our offerings to local clients or do we try to build a more regional team?

As we shall see, it’s difficult to staff for both:

The Local Route

  • Lower budget, higher volume work stream focusing on local Hong Kong or limited regional responsibilities (e.g. Hong Kong + Greater China)
  • Higher volume allows for larger employee base, able to absorb work as it cycles in from projects or retainers
  • Clients less willing to pay for strategy, so focus turns to production
  • Agency functions more or less independently, without need of international resources (if the agency is a part of a global agency network)
  • New business can still flow from network hubs (e.g. New York, London) if a local partner is required in Hong Kong
  • Cantonese becomes the dominant office language, which is often helpful for office morale if staff aren’t as comfortable with English
  • Lower budgets and bigger teams typically mean smaller salaries, which is unattractive to Hong Kong’s more ambitious talent
  • Production-oriented service offerings hurt the agency’s ability to build distinctiveness in the market; this can lead to commoditization of services
  • Health of business depends almost entirely on Hong Kong’s economic climate
  • Due to volume, loss of a single account has less of an impact on the overall health of the agency

The Regional Route

  • Higher budget, lower volume work stream focusing on regional or international responsibilities
  • Lower volume typically leads to a lean team structure with higher overall seniority
  • Focus on strategy rather than production
  • Agency usually functions as a hub for global offerings, which means it can receive new business from other global hubs and also distribute production responsibilities to smaller regional offices
  • English becomes office language, which obviously satisfies expat staff, but makes positions less attractive to a significant portion of local talent
  • Big budgets mean higher salaries and potentially the best talent
  • Regional scope allows for flexibility and breadth of offerings; if one market (e.g. Southeast Asia) is performing better than another (e.g. Greater China), business can shift accordingly
  • Loss of a large account can be painful from a revenue perspective

The Right Way Forward?

Put simply, the only wrong way forward is taking both routes at the same time. Given the team compositions local and regional clients require, it is difficult to take on both types of clients at the same time without risking idle or unsatisfied staff. There is merit to both routes, so long as the agencies fully lean into their proposed strategy. Having it “both ways” is a sure path to reducing an agency’s overall effectiveness.

So why not have separate teams? One for local business and one for regional? Here we must think from the staff’s perspective. If you have a regional team that is securing bigger budgets, how is the local team supposed to react? While its own business may very well be important, there is a psychological factor at play when some parts of the agency are working on large accounts, while others are cycling through lower paying accounts. Generally speaking, it is better for any organization to be pursuing the same types of work, and not have a split between high/low volume/budget work.

In order for an agency to reach its potential, it must clearly establish its strategy, and ensure that all relevant internal stakeholders actually follow it. It’s too easy for upper management to state its regional business strategy only to have a business development executive target local opportunities–thus creating a gap between how management envisions staffing the company and where the revenue is actually coming from.

For more information on how to approach strategy (not empty mission statements), I highly recommend reading at least the first half of Good Strategy, Bad Strategy by Richard Rumelt. It serves as a good overview of why good strategy is effective and why bad strategy isn’t worth the paper it’s written on.