CURRENT PERFORMANCE INDICATORS

The wholesale and retail sector is one of the largest service sectors in terms of employment.

• In 1995, there were 67?50 wholesale and retail establishments, employing some 275?00 people or 9.3% of Hong Kong's working population.

• In 1994, the sector generated $48.1 billion in terms of value added, accounting for 5% of Hong Kong's Gross Domestic Product.

THE GOVERNMENT'S COMMITMENT

The Government is committed to :

• maintaining the free market framework and a business-friendly environment for the further development of the wholesale and retail sector;
• actively supporting the Hong Kong Productivity Council in formulating strategies for promoting the productivity of the service industries including the wholesale and retail sector; and
• supporting the Consumer Council in its work to challenge unfair practices and monopolistic practices.

POLICY DIRECTIONS

We propose to :

• support an initiative of the Hong Kong Productivity Council to establish a Service Sector Branch in 1996-97 to enhance the promotion of the productivity of the services sector. The initial focus will be on the trading sectors including the wholesale and retail sector;

• establish a Small and Medium Enterprises (SMEs) Committee in 1996-97 to identify issues affecting the development of SMEs in Hong Kong, including those in the wholesale and retail sector, and suggest measures to support and facilitate their development. This Committee will work with major industry and trade organisations to identify ways to provide more support to SMEs in the wholesale and retail sector and improve their economic performance;

• promote the use of electronic commerce and data interchange in conjunction with interested bodies such as the Hong Kong Productivity Council, the Tradelink, the Retail Management Association, the Hong Kong Article Numbering Association and the Hong Kong Information Technology Federation;

• review the ambit of the New Technology Training Scheme to ascertain whether it could be enlarged to cover technologies, skills or other management techniques applicable to the service industry, including the wholesale and retail sector;

• work with the Hong Kong Franchise Association in promoting business format franchising as a means of creating business opportunities; enhancing the efficiency of establishments in the retail sector; and increasing exports of franchising services to neighbouring countries and regions; and

• support the Retail Management Association in promoting their "Service and Courtesy Award".

The relevant industry and trade organisations such as the Hong Kong Productivity Council, the Retail Management Association, the Hong Kong Coalition of Service Industries, the Hong Kong Tourist Association and the Hong Kong Franchise Association make a vital contribution by :

• facilitating the further development of the SMEs in the wholesale and retail sector;

• enhancing the productivity of the wholesale and retail sector, through such measures as human resources development and the use of electronic commerce; and

• promoting the development of a customer or service-oriented culture in the retail sector.

LONG TERM ISSUES

With consumers demanding higher standards of both products and services and their growing awareness of their rights, there is a need for the wholesale and retail sector to enhance its productivity and quality of service. There are encouraging signs that some retailers, particularly the chain stores, are making greater efforts to improve their service standards. At the same time, new technology is making an impact on the wholesale and retail sector. Credit cards, bar-coding and other electronic payment systems have become widespread. Smart cards and home shopping have also entered the market. Traders in this sector will need to keep abreast with these technological changes and market developments if their services and products are to improve in line with the expectations of consumers. This is all the more important given the limited scope of the domestic market and the fact that many neighbouring countries are offering goods and services at very attractive prices to tourists.

Secretary for Trade and Industry

March 1996