7 Oct 2016
E-commerce: Data as the New Currency (Interview with Clix)
The proliferation of e-commerce has created a large volume of business data. Even though companies in Hong Kong increasingly recognise the potential value of such data, attempts to capture that value have thus far only scratched the surface. If companies thought about data on a bigger scale, they might identify whole new business models. The industry calls this "data monetisation".
Established in Hong Kong a few decades ago, Clix currently has a staff of 80, of whom some 30 are based in Hong Kong, with the rest in mainland China and in Manila. The company’s core business is exactly that - data monetisation.
“Our service goes beyond analysing data,” said King Leung, CEO of Clix. “For instance, we have a client which is an e-commerce platform with 600 million registered users. The management knew it was sitting on a gold mine, but had no idea how to utilise such a big chunk of data. In light of a mix of mainstream and out of the box analytics, we applied our decades of industry expertise in the data business as a way of coming up with new revenue models for the client. Some of these models have been piloted and have shown some promise.”
Leung found that being based in Hong Kong is highly beneficial to his business, as nearly every international brand has a regional headquarters in the city. He said: “Utilising big data is a high-level decision which usually involves senior management with regional responsibilities.”
The majority of Clix’s customer base is made up of international fashion and beauty brands, while the rest are retail giants or rapidly growing companies on the mainland. The one thing that these companies have in common is that they all possess huge customer user bases and an enormous volume of transaction data.
“In contrast to Hong Kong, which is a mature market where companies are very risk adverse, mainland business owners are willing to take risks and make decisions very fast,” said Leung. “The mainland market is highly competitive, with many industries undergoing consolidation. Business owners are more receptive to the idea of making use of big data analytics to generate new revenue. In an increasingly complex and connected world, the willingness of a business to manage and analyse data effectively is no longer just about success – for some it is about survival.”
Leung is of the view that Hong Kong has the potential to further develop data analytics and data monetisation, which are neither labour-intensive nor infrastructure-intensive industries as most of the information they rely on is now cloud-based. “Data monetisation requires analysts who possess both numerical skills and sound business acumen,” said Leung. “Proficiency in programming is an asset, but not a pre-requisite.”
Leung is very positive about Hong Kong’s platform role, saying: “Hong Kong companies, with their obvious cultural proximity to the Chinese mainland and their understanding of international market practices, will naturally be the first choice for overseas companies that want to succeed in the China market through big data analytics or data monetisation.”
According to Leung, the integrity of Hong Kong professionals is highly recognised by mainland enterprises. He said: “There are numerous service providers on the mainland who can provide sophisticated data analytics. However, one mainland client chose our company because they are wary of opening up all of their data to local vendors for fear of data leakage. When dealing with highly valuable and highly sensitive data, the trust factor plays an important role.”