LCQ16: Assisting jewellery retail industry in digital transformation
22.2.2023

Following is a question by the Hon Shiu Ka-fai and a written reply by the Secretary for Innovation, Technology and Industry, Professor Sun Dong, in the Legislative Council today (February 22): Question: The jewellery retail industry has recently released a research report on the digital transformation situation of the industry, pointing out that the industry has encountered many difficulties during the implementation of digital transformation, including the lack of relevant professionals, excessively high initial investment costs, the lack of knowledge in applying digital technology and awareness of promoting e-commerce among the management and staff of traditional stores, as well as the lack of incentives for merchants to acquire relevant knowledge due to manpower constraints, etc. In this connection, will the Government inform this Council: (1) as some members of the industry have relayed that while the Technology Voucher Programme (TVP) aims to subsidise local enterprises to upgrade and transform their business processes, the procedures of TVP from application, vetting and approval to disbursement of subsidies, are complicated, whether the authorities have received any such complaints or views; if so, of the details; of the targeted measures in place to enhance TVP; (2) apart from TVP, of the measures in place to assist small and medium enterprises in the industry in conducting digital transformation, including whether additional resources will be allocated to them and relevant information will be consolidated, so as to assist them in fully understanding and mastering digital technology; (3) whether the Government will consider the suggestions made by members of the industry to formulate a "digital talent training programme" for the industry which meets the needs of the industry's mode of operation; if so, of the details; if not, the reasons for that; and (4) given that some members of the industry have relayed that some merchants have applied for setting up electronic payment systems in order to accept payment by electronic consumption vouchers, but they have encountered problems such as complicated application procedures and excessively long vetting and approval time, and some merchants' applications have still not been approved by the end of the relevant phase of the electronic Consumption Voucher Scheme, whether the authorities have reviewed the situation and what improvement measures have been put in place? Reply: President, The Government has been dedicated to supporting enterprises to undergo digital transformation through different channels, and set up the Digital Economy Development Committee (DEDC) last June, chaired by the Financial Secretary, to promote digital transformation across different industries and expedite the development process of digital economy in Hong Kong. Having consulted the Commerce and Economic Development Bureau and the Financial Services and the Treasury Bureau, our reply to various parts of the question is as follows: (1) In order to assist enterprises/organisations in using technologies to improve productivity, or upgrade and transform their business processes, the Innovation and Technology Commission (ITC) launched the Technology Voucher Programme (TVP) under the Innovation and Technology Fund in November 2016 to subsidise local enterprises/organisations in using technological services and solutions. TVP is now a regular funding programme providing subsidies for projects on a 3 (Government):1 (enterprise/organisation) matching basis. For each enterprise/organisation, the cumulative funding ceiling is $600,000 and the maximum number of projects to be approved is six. As at end 2022, a total of 19 462 applications were approved, among which 96 per cent were from small and medium enterprises (SMEs), with around 98 per cent success rate, involving a total funding of around $3.27 billion. The Government attaches great importance to feedbacks on TVP from the industry, and regularly reviews its implementation and introduces enhancement measures to encourage and facilitate the utilisation of TVP by the industry. After introduction of a series of enhancement measures in 2020, the number of applications received increased from 1 574 in 2019 to 4 945 in 2020. To expedite the processing of applications, the ITC appointed the Hong Kong Productivity Council (HKPC) as the implementation partner of TVP in June 2021, utilising its manpower resources and professional experience to increase processing capacity. There was feedback from the industry earlier that there was practical difficulty in fulfilling the TVP requirement to obtain a requisite number of quotations from suppliers or service providers according to the value of project-related equipment or services. In view of this, the ITC and the HKPC introduced the TVP electronic procurement platform in October 2022 to offer an alternative procurement means in addition to the traditional channel, which allowed applicants to obtain quotations of competitive prices in a completely open, fair and transparent manner. At the same time, it provides opportunities for more service providers to participate in TVP projects by way of fair competition. We will continue to monitor the industry's feedback and the implementation of TVP, and introduce timely enhancement measures when necessary. (2) and (3) The DEDC set up four sub-groups in end September 2022, which invited relevant industry representatives and stakeholders to jointly make suggestions on accelerating the development of Hong Kong's digital economy. Among them, the sub-group on digital transformation is understanding through different channels the challenges encountered by SMEs in the process of digital transformation and the support required, so as to formulate concrete recommendations which can cater for the digital transformation of SMEs for the Government's consideration; whereas the sub-group on talent development is studying ways to complement the development of digital economy in terms of human resources. On the other hand, the HKPC will continue to provide consultancy services, online forums and training etc., to expedite efforts in supporting digitalisation of SMEs. A series of services include: introducing a free one-stop digital transformation solutions platform "Digital DIY Portal" that brings together digital transformation solutions, digital and innovation information and successful cases of digital transformation in industries, in order to assist local SMEs to embark on digital transformation; assisting SMEs to streamline work processes, minimise labour-intensive processes and enhance operational efficiency through the adoption of big data consultancy, service robots, Internet of Things, smart operation and system integration, etc.; organising online forums to help enterprises adapt to new modes of business operation through digital technologies and online business, and explore new clientele despite geographic constraints; and holding physical and online HKPC Academy training activities to assist around 30 000 trainees in mastering new technologies and knowledge management. The courses cover digital and management skills under the framework of "future skills". In addition, the Government puts in place various funding schemes to assist enterprises in enhancing their competitiveness, including the use of electronic channels for product promotion. Among the various schemes, the funding scope of the Dedicated Fund on Branding, Upgrading and Domestic Sales covers the support to enterprises in developing e-commerce and integrating online-offline modes of sales and marketing, such as establishing online sales platforms, setting up online shops on third-party online sales platforms, incorporating electronic payment functions into their websites and developing mobile applications, etc. To nurture local innovation and technology talents, the ITC launched the Reindustrialisation and Technology Training Programme (RTTP) in August 2018, which subsidises, on a 2 (government):1 (enterprise) matching basis, local enterprises for training their staff in advanced technologies, including trainings that assist the upgrading and transformation of traditional manufacturing industries. The RTTP imposes no restriction on the industry of the applicant company. As at end-December 2022, the RTTP approved applications from 3 399 local enterprises for their employees to receive 22 754 training sessions, involving a total funding of around $240 million. (4) One of the key objectives of the Consumption Voucher Scheme is to promote the wider adoption of electronic payment in Hong Kong. As a result, when implementing the Scheme in the past, the participating stored value facility (SVF) operators had been required to provide facilitation to local merchants (in particular SMEs) who were new to electronic payment as far as possible, including providing technical support to merchants, waiving fees for installing and using the stored value facilities by merchants and rebating the service fees received from the Government to merchants and consumers by various means. Since the implementation of the first Consumption Voucher Scheme in 2021 to the end of last year, the SVF operators had together acquired more than 180 000 new merchants accepting electronic payment. According to the information provided by the operators, they can usually complete the vetting of an application from new merchant within a few days to about two weeks. However, under circumstances such as the merchant failing to provide the required information and documents when submitting the application, the vetting process may take longer. If any individual merchant encounters difficulties in applying for an account, the operator concerned will provide assistance as far as possible.