How four Hong Kong SMEs used digital marketing to their advantage

Despite being very different in nature, these four startups' online promotion methods, whether in search marketing or display advertising, have generated enough exposure to overseas customers to guarantee return-on-investment for them to stay afloat.

1. 2-Floor Bookstore

2-Floor Bookstore is an online bookstore, based in Hong Kong, that sells traditional Chinese-language books. Owner Wong Yik Sun did not start online though. For 10 years, he ran two bricks-and-mortar bookstores specialising in secondary-school textbooks. One day, he was searching for a specific book but could not find it. He thought to himself that it would be much easier if there were to be a website to facilitate online book searches.

So, Wong opened his online store and sold his first book in February 2010. Within six months of launching the website, he began using search-engine marketing to promote it. One month after, he saw sales double. Now, for every HK$1 he spends, he gets up to HK$5 in sales, representing a 500 per cent return-on-investment. About half of his sales come from first-timers, and the rest from repeat customers. Ten per cent of them are overseas Chinese looking for books written in traditional Chinese.

Going online has transformed Wong's business in other ways. On the web, he can offer books for 15 per cent less than the going rate in physical bookstores, as well as stock a far wider range of books. As online sales grew, Wong actually decided to close his bricks-and-mortar stores to focus on his booming online business, where overhead costs are lower and not constrained by physical space. To accommodate customer demand, he is even thinking of hiring someone in Taiwan to interface with publishers based there.

AJL Photography is a two-man Hong Kong photo studio, where Andrew Loiterson and Wai Cheng run their business with the help of just two support staff. While their studio may be small, their work spans Asia-Pacific, from international hotel chains to media outlets, airlines and advertising agencies.

The web has changed the way photographers work. In the old days, they had to find work by boarding planes and knocking on doors to pitch their physical portfolios, or by mass-mailing CDs or hard copies of their work. Their business was largely limited by geography: wherever they could afford to fly to.

Now, customers as far away as New York or London come to them via web searches for "Hong Kong photographer". After experimenting with Google AdWords' geographic targeting, the two ran ads online in regions more likely to be looking for photographers while pruning ads in regions with lower levels of demand. They have also stopped advertising in offline mediums entirely.

They have also used the web to streamline business operations. Whereas previously they delivered images to clients by overnighting CDs, they now use file-sharing sites to digitally transmit finished work.

Instead of mailing out physical cards on holidays like Chinese New Year or Christmas, they now maintain a social-media presence and an email list that enable them to communicate with loyal customers without stopping by the post office.

3. Sanwa Pearl & Gems

Sanwa Pearl & Gems is a Hong Kong wholesaler specialising in synthetic opals, corals and pearls. It is a father-son business that markets jewellery supplies to designers overseas. For years, Sanwa used traditional offline channels to promote its products, by sending salespeople to trade shows and placing ads in print publications.

Sanwa’s fortunes began improving when Franco Fung, son of the founder, established an e-commerce website to reach more customers. He also set up a Google AdWords campaign, starting with a budget of just US$100. Now, for every US$50 he spends, he receives one enquiry, which is significant for a wholesaler. Fung uses a tool in AdWords to estimate the volume of searches for his products, then runs small campaigns to judge the response from the market.

Customers used to be mainly located in North America, but the e-commerce and online marketing efforts have expanded the customer base to new markets like Europe, Russia and Saudi Arabia.

This year, Fung is planning to expand beyond wholesale and go direct to the retail market. He has already set up a consumer-facing website, and started advertising on YouTube. The business has ceased all forms of offline advertising.

4. The Tattoo Temple Studio

Tattoo Temple is a custom-design tattoo studio, where each tattoo created is used only once for the commissioning client. Headed by Joey Pang, who grew up in Hong Kong and founded Tattoo Temple in 2006, the business has three artists and two apprentices.

Using the internet to engage customers and to differentiate services from other tattoo studios, Pang's website functions not just as a showcase for tattoo artwork but serves as a personalised concierge service. It enables direct interaction with clientèle who can be business executives, celebrities, lawyers, doctors and other professionals.

Pang also developed an iPhone / iPad app to further engage customers. The app features interactive tattoo portfolios, news, educational articles as well as lifestyle suggestions. Again, search engine optimisation was utilised to promote images of their tattoo designs to people searching for body art.

Thanks to these combined efforts, 70 per cent of clients now come from outside Hong Kong. Clients fly in specially from countries such as Europe, the US, Australia, Singapore, Japan and Russia. Pang herself has a two-year waiting list for newly commissioned tattoos while the studio achieved 300 per cent growth in revenue over the past 24 months.