Hong Kong as a Gateway for Sourcing of Vendors in China

Hong Kong is a place where ACE Hardware Indonesia (AHI) looks for new vendors and suppliers. “Hong Kong is seen as the gateway to connect suppliers from China to Indonesia,” said William Widjaja, Business Development Manager of AHI.

A modern brick and mortar store network

PT ACE Hardware Indonesia (AHI), Tbk, operates a modern brick and mortar store network with one-stop shopping that provides quality home improvement and lifestyle products. The company has 171 ACE Hardware stores with a total area of more than 371,600 square metres in 39 cities in Indonesia and hires more than 13,600 employees.

AHI’s parent company (PT Kawan Lama Sejahtera) imports 4,000 containers of goods from across the world annually, with more than 85% coming from China. AHI represents around 50% of the parent company’s overall business.

Gaining exposure at Hong Kong trade show

According to William Widjaja, Hong Kong has traditionally been known for its trade shows. AHI has been sending over 20 staff to household, lighting and electronics shows for over 10 years. The Hong Kong trade shows attract numerous businesses worldwide and are an excellent forum for AHI to network, build business partnerships and showcase its products to other countries.

Expanding footprint in Hong Kong

Hong Kong is a place where AHI looks for new vendors and suppliers. In mid-2018, AHI set up an office in Hong Kong focused on sourcing. Hong Kong was chosen because of its strengths in ‘soft side’ or service-oriented side of the business, such as product design, research and development, quality assurance, etc.

Most importantly, Hong Kong is a great platform and gateway to connect suppliers from China to Indonesia through trade shows and other means of establishing business partnerships.

Efficient and faster response rates

William noted that AHI used to perform its own sourcing from Indonesia in the past, but had challenges related to language barriers, access to Chinese vendors, limited ability to meet with business partners in-person, which impacted response and transaction rates.

With the office in Hong Kong now set up, this has helped to divide the load, and has enabled much quicker response rates. The Hong Kong office is able to help with supplier verification and ensure greater quality control.

Creating more impactful services

Looking forward, William believes that Hong Kong should focus more on enhancing key areas such as product design and product development. Having a focus on R&D, quality and greater value-add services will distinguish Hong Kong from price competitive cities.

_{Company interview conducted by Deloitte Advisory (HK) Ltd.}