Critical Success Factors of Beauty Industry in Hong Kong: the case of Modern Beauty Salon Holdings Ltd.


 


 


Chapter I


Introduction


 


Today’s definition of beauty is relative. Beauty in its traditional notion refers to the attribute of being physically attractive. However, this does not seem to be enough as it seems to be an essential yet insufficient condition. Langmeyer and Shank (1994) wrote that substantial indication has been collected, apart from cultural changes in its meaning; beauty is an effective trading commodity. Beauty has been an active part of consumer lifestyle. Lifestyle is the outward expression of a consumer’s needs, desires and values, reflected through patterns of demographics, purchasing behaviors, activities, interests and opinions (Mercer 1996). Consumer lifestyle can be practically referred to as the manner on how people live, how they spend their economic resources, and how they allocate their time. On this case, beauty products and services are purchased for personal consumption and the relative importance of social factors is reflected to consumer approval or final decision. Consumer lifestyle can change dynamically under social environmental influences and are also derived from the individual’s personal value system and personality (Greco, Mazze and Michman 2003). This fact is among the reasons why beauty industry continuously innovate products and services that cater to the changing needs of the beauty and lifestyle conscious consumers.


 


Background of the Study


Hong Kong Special Administrative Region (HKSAR) is known to be one of the most exceptional and vibrant tourist destinations in the world because of its aura of magnificence, efficiency, and state-of-the-art competence (Kwong and Miscevic 2002). Hong Kong, as it is popularly referred by most visitors, is also recognised for maintaining its continuing competitive advantage especially in Asia’s hotel and restaurant into the bargain of the entire tourism and hospitality industries (Weidenfeld 2006; Pun and Ho, 2001). With a booming tourism and hospitality industry, Hong Kong’s beauty industry can be presumed as similarly booming due mainly to the fact that some beauty related businesses are covered by said industry. Beauty salons, spas, and other establishments are linked with modern hotels and beauty products and services are included in their accommodation packages.


            Hong Kong is a free economy that allows international economic enterprise. This market promises a lucrative and rich land for international business operators. Hong Kong claims to be the world’s freest and most service-oriented economy, the Asia’s best city for business, second least corrupted government, the world’s 11th largest trading economy, and 10th largest exporter of services. According to facts presented by the Hong Kong Trade Development Council in the tdctrade.com webpage (2007), Hong Kong affirms its position as the world’s second highest per capita holding of foreign exchange and Asia’s 2nd source of foreign direct investment. The table below presents the major economic indicators of the region:


 


Hong Kong Major Economic Indicators


Source: HK Trade Development Council in tdctrade.com (2007)


-


2003


2004


2005


Latest


Population, Mid-year (million)


6.80


6.88


6.94


6.99a


Gross Domestic Products (US$ billion)


158.2


165.6


177.2


188.7b


Real GDP Growth (%)


+3.2


+8.6


+7.3


+6.8c


GDP Per Capita (US$)


23,300


24,100


25,500


27,000b


Inflation (% Change in Composite CPI)


-2.6


-0.4


+1.0


+2.0d


Unemployment Rate (%)


7.9


6.8


5.6


4.8d


*** a Mid 2006; b Government forecast for 2006; c First three quarters of 2006; d 2006.


 


 


Meanwhile, the coming out of Korea in the 1990s as one of the largest capital exporters in the global market, particularly in the Asian region (i.e., Indonesia, Vietnam, and China) is a new and noteworthy phenomenon (Lee 1999, p. 462). South Korea action to business expansion in Hong Kong will be a significant leap for both territories. Hong Kong as a reputable and economic viable region is a potent target market. The following are the reasons on why Hong Kong is chosen to be the prospective target market.


 


 Market characteristics


In the first quarter of the year 2005, the economy of Hong Kong proved its firm and stable hold as its real GDP rose to 6% following the progress of the recorded 8.1% from the previous year. With the given instance, the market of Hong Kong is dynamic and it caters to a large range of economic activities and consumers that it can generate such economic ability. The second phase of Mainland–Hong Kong Closer Economic Partnership Arrangement (CEPA II) in August 2004 extended the liberalization enjoyed by the city in the trades of goods and services as consumer prices rose since July of 2004 from its five years of decline. The unemployment rate fell to 4.8% in 2006, from the peak of almost 9% in 2003. The first five months of the year 2006 recorded an increase of 11.6% while exports grew by 9.4%. Arrivals of tourists for visits and vacation as well as business deals continued to increase with a total of 23.4 million or 3.4 times the size of the local population in 2005. The increase was noted as 7.1% from a year earlier. Thus, the tourism sector recorded tourist’s growth of 8.7% first and third quarter of 2006 (tdctrade.com 2007). Hong Kong market is composed of various elements ranging to cultures, races, and types of industries, people, and the like. Since it is a melting pot and considered to be world’s freest economy, doing any relevant business is very promising.


 


 


Hong Kong’s Competitive Environment, Cost and Tax, and Demand


 


The foremost competitive edge for Hong Kong’s financial sector lies in its reputation of being a hub for financial services and having achieved global prominence in these financial businesses. Its competitive position in the market is influenced by several factors. The regional shift of the growth patterns to and the strong and growing domestic spending in the mainland China puts Hong Kong at the heart of the fastest-growing markets in the Asia-Pacific. Many believe that Hong Kong is the key to gain entrance to China’s vast market and Asia’s economic recovery that a number of overseas companies will be interested in participating strengthened by the CEPA as a result of the successful integration of Hong Kong to China’s economy (tdctrade.com 2007).


Further, the earning power of the Hong Kong economy is rooted from the higher returns of investment due to the low, simple and predictable tax system that operates in the locality wherein corporate tax rate is 17.5%, maximum salaries tax is 15.5% and the lack of tax on any kind of foreign-sourced income. There are no capital gains taxes and sales tax or VAT. Hong Kong also does not tax personal tax dividends or bank interests (tdctrade.com 2007). Accordingly, active multinational business organizations are represented in the Hong Kong market where business partners and competitors meet bringing together thought-leaders from all over the world. There are currently 3, 119 regional headquarters and offices of foreign business firms based in Hong Kong. International conferences are also popularly held in the city which amounts to 200 meetings and seminars including the Fortune Global Forum. The economy is characterized with vibrancy with the visibility and dynamics of overseas companies that fuels the entrepreneurial and transnational skills and knowledge of business individuals (tdctrade.com 2007).  


With the political, social and legal stability is maintained within the bounds of the territory, Hong Kong has the reputation of one of the world’s best and most productive business centre. It has a corrupt-free economy; it protects the individual freedom of the people stationed; it has transparent, predictable and enforceable legal set up and offers security and protection to investments.  The laws that govern the local citizens do not recognize the difference of foreign dwellers in the city as they are not subjected to any special regulatory policies (tdctrade.com 2007). Also, the international management quality and international management experience ranks Hong Kong high in terms of professionalism as according to the reports of the World Economic Forum. This is evident in the low cases of incidence regarding disputes between the management and the labor force of the companies operating in the city (tdctrade.com 2007).


Beauty industry undeniably shares a significant portion in Hong Kong’s economic growth. As tourists flock their ways to the city, there is a high probability of using at least one or more beauty products and services that are offered in various leading beauty related establishments like salons and spas. For example, Modern Beauty, according to its corporate domain, is a leading beauty salon group in Hong Kong that offers a comprehensive range of beauty and wellness services to mid- and high-income customer groups who pursue quality living. It offers eight (8) services that are categorized into the following main lines: Beauty and Facial Services, Spa and Massage Services, Deluxe Spa and Massage Services, Slimming Services, Fitness Services, Men Salon Services, Men’s Products, Healthcare Centre, Beauty Expert International College, and Distribution of Beauty Products and Equipment. These beauty products and services are offered to all lifestyle consumers, both local and foreign in nature. It has been identified that Modern Beauty has grown over the years of its operations using its multi-brand strategy to capture diverse market segments. It expanded its 18 large-scale service centres that feature state-of-the-art equipment with modern and luxurious flair design that aim to leave an aura of relaxation and comfortable ambience for all its customers. For this year, Modern Beauty recorded HK$ 227 million and 28% growth in its annual profit. Using the net profit margin, the Group is remains stable. The Group has competitors in spas products and services such as Elle Spa Repulse Bay, The Firm, Indulgence, Landmark Mandarin Oriental Spa, Plateau Spa, The Spa at the Four Seasons, and other salons and spas operating within its specific locations. Other competitors are first-class hotels that offer same beauty products and services that the Group is offering. With the clear success that Modern Beauty is showing, it is apt to identify its critical success factors that reflect the condition of the overall beauty industry in the city. This study is conducted to explore the beauty industry of Hong Kong and point out its current trends and developments using Modern Beauty as case example. Also, because of the growing importance of beauty in lifestyle of modern consumers, it is very important to know the trends and development in the beauty industry that, in one way or the other, can affect marketing and management practices of people working in this industry.


 


Objectives of the Study


            This study generally provides a background of the beauty industry in Hong Kong. It primarily focuses on the identification of the critical success factors of the industry using the case of Modern Beauty Salon Holdings Ltd as example. It also elaborates on the role of beauty industry, including salons, spas, and other lifestyle and beauty related businesses, in enhancing the economic condition and the marketing strength of Hong Kong as among the world’s top tourist destination.


 


Statement of the Problem


            The following problems are answered in this study:


  • What are the critical success factors of the beauty industry of Hong Kong as shown on the case of Modern Beauty Salon Holdings Ltd?

  • What are the strengths, weaknesses, opportunities, and threats of the beauty industry?

  • What is the role of beauty industry in enhancing the economic condition and the marketing strength of Hong Kong as among the world’s top tourist destination?

  •  


    Significance of the Study


                A case study is an extensive evaluation or examination of a single instance of a phenomenon of interest. Given this fact, this case study has many functions in which it will primarily serve. This study was conducted with the intention to provide information and details to the critical success factors of the beauty industry of Hong Kong using the case of Modern Beauty Salon Holdings Ltd as example. Generally, this research case study is for knowledge acquisition and awareness. The importance of this study lies to the eventual presentation of data that seek to answer the question on the critical success factors of the beauty industry in the city.


    Theoretically, this study is intended for marketing management practitioners, academicians, and business or managerial personnel and students in providing body of knowledge that they may use in the performance of their own individual duties. It is also an attempt to contribute on the literature focusing on the said subject. Moreover, this study seeks to give information on issues ranging from the critical success factors of the beauty industry and its role in enhancing the economic condition and the marketing strength of Hong Kong as among the world’s top tourist destination. Empirically, this study is intended as a theoretical basis that can be used in problem-solving and decision making and taking situations in the academic setting.


    By being aware of these factors that affect the success (or failure) of the beauty industry in Hong Kong, the readers of this research will be able to validate their existing preconceptions by linking such with the results and findings of the study. Also, this study would benefit future researchers in the field of marketing and management in general. Finally, to the researcher, this study will increase the knowledge that is innate to herself. The interests that she posses in relation to marketing, management, and its applications will flourish as she continue to explore the adventurous and challenging world of marketing and management. From this research study, the researcher will be able to contribute to the existing body of knowledge within the limits of her academic environment through the study’s results and findings. Additionally, the development in her personality in relation to professionalism and work ethics will also be cultivated throughout the duration of the research. All in all, this endeavor will make the researcher a better person and an able professional in her chosen profession in the future.          


     


    Current Beauty Industry Situation in Hong Kong: the case of Modern Beauty Salon Holdings Ltd


     


    In a recent online newspaper article published in The Star Online and written by Dong (2008), the trend in beauty industry today is medical beauty. It is a term that was coined to characterize any beauty services that are rendered using specialized medical principles. This includes cosmetic surgery and other treatments that use lasers, light-based technologies, radio frequency devices, Botox, placenta injections as well as non invasive treatments. Nelson Ip, Chairman of the Federation of Beauty Industry, Hong Kong, and editor-in-chief of Les Nouvelles Esthetiques, a beauty magazine in Hong Kong sees a growing market in this area, as there are more and more people looking for a quick fix. Medical beauty offers solutions much faster than traditional beauty treatments. He added that the service will attract a niche group of clientele, especially those willing to pay a premium for instant results. However, the challenge of this promising field of medical beauty industry lies on the proposition of legal policies and regulations that will serve as general guide for all practitioners and related individuals.


     


    CHAPTER III


    Research Design and Procedures


     


    This chapter presents the methods and procedures utilized by the researcher in pursuing answers to the questions raised in the study. It also provides information on the description of the methods and procedures that were conceptualized and constructed in order to obtain the needed data and information that will be most useful to the study. Details on how the accumulated data were analyzed and interpreted as well as how the conclusion was drawn is discussed in full extent in this section.  This provides justification of the means in which the study was accomplished and at the same time helps in giving purpose and strength to the validity and reliability of the collected information that makes this particular research practice truthful and analytic.


     


    Research Design and Instrument


                In order to come up with the most suitable research approaches and strategies for this study, the research process “onion” is undertaken. This is because conducting a research is like peeling the back layers of an onion – in order to come to the central issue of how to collect the necessary data needed to answer the research questions and objectives, important layers should be first peeled away. With the said process, the researcher was able to create an outline on what measures are most appropriate to be applied in the study.


    The researcher uses the qualitative research design utilizing the descriptive research method, which is primarily concerned with describing the nature or conditions of the current situation in detail (Creswell, 1994). According to Mays and Pope (2000), the qualitative research approach is most appropriate when conducting descriptive and exploratory study in order to quantify data that seem immeasurable, such as feelings, beliefs, and thoughts. Qualitative research is defined by Collis and Hussey (2003) as “a subjective approach which includes examining and reflecting on perceptions in order to gain an understanding of social and human activities” (p. 353). The emphasis is on describing rather than on judging. This study employs qualitative research method, since it intends to find and build theories that would explain the relationship of one variable with another variable through qualitative elements. These qualitative elements does not have standard measures, rather they are behavior, attitudes, opinions, and beliefs. So, the goals of qualitative research are primarily to advance new theory, interpret the significance of individual events and giving voice to particular groups.


                So, the goals of qualitative research are primarily to advance new theory, interpret the significance of individual events and giving voice to particular groups. In contrast quantitative research is primarily about testing theory, identifying broad patterns and making predictions. Quantitative researchers are interested in how variables co-vary across cases. Therefore, they seek a limited amount of information about many cases. Qualitative research, on the other hand, seeks a lot of information about a limited number of cases. In this case, the choice of research strategy depends at least in which part and what the researcher wants to achieve.


                This type of research will utilize case study.  When a person make a detailed study about one person or unit over a considerable period of time, he/she is engaging in what is known as a case study. Punch (1998, p. 150) states that case studies involve looking one or more cases, which are “studied n detail, using whatever (research) method seems appropriate”. It aims to develop full understanding of the case as possible and is not linked with any particular research technique. This method involves the researcher to inquire deeper and examine thorough behaviors of a person or a circumstance. It is also noted how these behaviors change as the individual or circumstance adapts and reacts to the environment. Furthermore, it includes the discovery and identification of all the important variables which have contributed to the history or development of the chosen subject. This means that the researcher is going to gather data which include the past experiences and present condition of the subject as well as the environment. It will attempt to find out how these factors relate to one another and how they have affected the subject.


    Case studies may sometimes involve small social units such as clubs, a family, a school, or any group of individual who shares common interest. The researcher who uses the case study research design needs such respondents as he/she searches for solutions of some important problems. Researches in the field of guidance illustrate the use of case studies to solve some of the most important problems and queries. Accounts of respondents’ thoughts, dreams, and actions are noted down to provide an insight into human behavior which may lead to the discovery of new findings not known before.


    The case study method refers several advantages. The greatest advantage a researcher can derive in this method is its depth. By digging deeper into the whole personality of an individual or group or a certain situation, the researcher can probably tell some imperative knowledge or explanation such as on the kind of behavior or attitudes. Another advantage that can be derived from case studies is the opportunity of the researcher to gain insights into the basic concepts of human behavior or any given body of knowledge. Through intensive investigation, it is possible that the researcher may come across previous unsuspected relationships of variables.


    On the contrary, case studies also have few disadvantages. Its depth can mean its lack of breadth. Generally, it is difficult to generalize findings to include other people when these findings have been drawn only from a certain fragment of a given population. In short, it is not really a representative of the entire population. Hence, it lacks of extent. As a researcher, the possibility of subjectivity or even prejudiced is high. This is because there might be preconceived events, things, and people or any other condition that may affect the flow of the research. Such preconceptions may also affect the insight and the bias might determine what behaviors to be studied or to be ignored. It will likewise affect the procedures of interpreting the observation, which will not be scientific. But in the long run, these situations can be avoided and solved by being objective at all times. The researcher opted to use this kind of research purpose considering the desire of the researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.


     


    Subject of the Study


    Population, or the subject of this study, is defined as a set of categorized group that can be people, objects or any items from which the selection can be made to be used in statistical treatment such as a group of young individuals, manager and literary books. Herein, the researcher will used the sampling method which is defined as a strategic way of choosing the most appropriate sample or the most suitable part of the population for determination of the characteristics or restriction. 


    The researcher, in choosing subjects or respondents for the topic at hand, is usually thought of to have the power over who the respondents of the study will be. Such a task would have been easier, except a researcher cannot simply choose out of urge; the subjects must be selected carefully with the intention of having subjects who each posses characteristics that, when put together, will represent a community. It is not only themselves, whom these subjects will represent, but the bigger whole or the whole population. The characteristics which the researcher has chosen them for will determine which part of the community they belong and what part of the community they are representing.


                This study is mainly focused among 200 respondents from Modern Beauty – both employees and customers. Demography or respondent’s profile is not considered as important factor.


     


    Sampling Procedure


                In this research paper, it is important to distinguish and determines the respondents of the study. In this manner, the researcher will have the respondents through a sample. Sample is known as a predetermined element of a statistical population that undergoes specific study. In conducting a research this population is called a set of respondents that has been selected from a greater number of populations for survey purposes.


                This research study used the random sampling method. Random sampling is the selection of respondents in a casual condition provided that it mainly caters to the key characteristics needed for a population, which is on this case are the employees and customers of Modern Beauty. Thus, this study includes 200 respondents who are randomly selected.


     


    Data Collection Procedure


    Primary data are gathered with the aid of the predetermined questionnaire consistently distributed to the respondents. The researcher used a checklist. This type of survey questionnaire is categorically considered as close-ended questionnaire. Close-ended survey questionnaire are also used in obtaining the information relevant to this study in order to draw out substantial amount of information yet limited in number. In administering the tool, respondents gathered self-reported information through self-administration of questions in a paper-pencil format. This method is useful in collecting data for the following reasons: subjects were asked to respond to the same set of questions in the same order, they had the same set of options for their responses, and it is economical. In a questionnaire using closed-ended questions, the researcher offered a list of answers that will be checked or chosen by the respondent. Close-ended questionnaires are not limited two alternative replies of true or false from which the subjects choose the one that matched the appropriate answer. Further, close-ended questionnaires facilitate easy tabulation and orderly treatment of data. The questionnaires are more convenient and provide fairly straightforward information relatively useful for the solutions of the problem posed. It also served as an aid for deliberate and immediate tallying because of the limitation of time for the prescribed duration of the research investigation.


    The researcher opted to use the questionnaire as a tool since it is easy to construct having the rules and principles of construction are easy to follow. Moreover, copies of the questionnaire could reach a considerable number of respondents either by mail or by personal distribution. Generally, responses to a questionnaire are objectified and standardized and these make tabulation easy. But more importantly, the respondents’ replies are of their own free will because there is no interviewer to influence them. This is one way to avoid biases, particularly the interviewers’ bias. The researcher will also use graph and charts for data presentation.


    Data analysis employed in the study will be carried out in steps. Every data form will be carefully read in order to have an idea of the whole results concept. The text will then be read again and divided into meaningful units as the researcher see fit. Data will be condensed and formed into syntheses which will be integrated to form the address the research questions. Once the data has been collected and collated, the final task is to interpret the results. It is important to exercise caution when interpreting results and drawing conclusions from data, since it relates only to a sample. The more carefully the sample size and make-up has been selected, the more value the final data will have. However, the results can only ever be a guide and will never predict totally accurately. There will be a certain amount of statistical error in any results and the conclusions drawn from those results.


    For this study, the researcher, after gathering the relevant data needed, it will be collated together with published studies from different local and foreign universities and articles from educational and social science journals. Afterwards, a critical analysis will be rendered on the collected documents and materials. A summary of all the information gathered would also be provided by the researcher, as well as a conclusion and insightful recommendations.


     


    Statistical Instrument


    When the entire survey questionnaires have been collected, the researcher used statistics to analyze all the data. This research will utilize the frequency, percentage, weighted mean, and correlation statistics in order to determine the differences and relationship of the responses of the respondents regarding their perception on the variables of the study. It is important to note that these statistical instruments are to be used on the survey method alone.


    In detail, the following statistical instruments will be used.


    Frequency – This is the total of similar responses acquired per item and asked in the survey questionnaire.


    Percentage – The percentage is used to compare and present the findings on the frequency of responses obtained from the questionnaire. The formula is:


     


                            P = _n   x 100


             N


     


                Where;           P – Percentage


                                        n – Number of responses falling under a particular category


                                        N – Total number of respondents


     


     


     


     


     


     


    Chapter 3


    Findings


     


    Considering that the socio-demographic profiles of the respondents is among the affecting variables of the study, this section presents, interprets, and analyses the role of gender, age, educational background, occupation, and income level.      


    Table 1. Gender of Respondents


    Gender


    Frequency


    Percentage


     


    Male


    9


    30


    Female


    20


    67


    Unidentified


    1


    3


    TOTAL


    30


    100


     


    Figure 1.


     


     


     


     


     


     


     


     


                The table and figure above presents that twenty (20) out of 30 respondents belongs to the females while nine (9) are males. One (1) of the respondents is unable to identify his/her gender. However, it did not affect the results significantly.


    Table 2. Age Group of Respondents


    Age Group


    Frequency


    Percentage


     


    18-22


    0


    0


    23-27


    1


    3


    28-32


    8


    27


    33-37


    9


    30


    28-42


    6


    20


    43-above


    6


    20


    TOTAL


    30


    100


     


    Figure 2.


     


     


     


     


     


     


     


     


                Nine (9) respondents who belong to 33-37 age group said that they have access to the internet. One (1) from 23-27, eight (8) from 28-32, six (6) for both 28-42 and 43-above age groups comprised the rest.


     


     


     


    Table 3. Highest Educational Attainment of Respondents


    Highest Educational Level


     


    Frequency


    Percentage


     


    Completed Primary


    0


    0


    Completed Secondary


    4


    13


    Undergraduate


    10


    33


    Postgraduate


    16


    54


    Others


    0


    0


    TOTAL


    30


    100


     


    Figure 3.


     


     


     


     


     


     


                In terms of highest educational attainment, the following results are obtained from the 30 total respondents: sixteen (16) are postgraduate, ten (10) are undergraduate, and four (4) completed secondary.


     


    Table 4. Occupation of the Respondents


    Occupation


    Frequency


    Percentage


     


    Salaried-employed


    22


    74


    Self-employed


    7


    23


    Households


    0


    0


    Unemployed


    1


    3


    TOTAL


    30


    100


     


    According to the table above and the graph below, twenty-two (22) of the total respondents are salaried-employed while seven (7) are self-employed and one (1) is unemployed.


     


    Figure 4.


     


     


     


     


     


     


     


               


    Table 5. Average Monthly Income of the Respondents


    Average Monthly Income


    Frequency


    Percentage


    Under HKD8,000


    1


    3


    HKD8,001-10,000


    1


    3


    HKD10,001-20,000


    16


    54


    HKD20,001-40,000


    11


    37


    Over HKD40,000


    1


    3


    TOTAL


    30


    100


     


     


     


     


     


    Figure 5.


     


     


     


     


     


     


     


                The table and graph reports that sixteen (16) respondents have HKD10,001-20,000 average monthly income. The others are as follows: eleven (11) earn HKD20,001-40,000, one (1) for each remaining brackets – under HKD8,000, HKD8,001-10,000 and over HKD40,000.


    The following section discusses the results of the survey questionnaire. Also, analysis using applied concepts and theories found in literatures is utilised.


  • Twenty-eight (28) respondents have access to the internet or the WWW in the past six (6) months while two (2) says otherwise.

  • Table 6. Do you access the internet or the WWW in the past six (6) months?


     


     


    Frequency


    Percentage


     


    Yes


    28


    93


    No


    2


    7


    TOTAL


    30


    100


     


     


     


     


     


     


    Figure 6.



     


     


     


     


     


     


     


     


     


     


     


     


     


     


     


     


     


     


     



     


    Due to the popularity of the medium for the past decades, people are already accustomed with the usability of this technological innovation. Accordingly, the internet or the World Wide Web is synonymously referred as the cyberspace (Sterling, 1992). It now touches all lives (Jordan, 1999, 1). True enough, the cyberspace and its related mechanisms are rapidly transforming and enhancing many aspects of contemporary society and living. It is primarily and quickly becoming the mainstream media because of the many positive effects that it has on the way that users communicate, receive and disseminate information, or how people use it to gratify their needs. With the perceived efficiency of cyberspace, there are also existent drawbacks that deviates its potential goodness. Because of its powerful prospective, the cyberspace certainly changes how people live people and views the society (Turkle, 1995).


    Today, the cyberspace, particularly the Internet was used extensively for communications, information gathering, and dissemination. There are four important factors applicable to the Internet that do not overlap with traditional mass media such as television, radio and print, and which bear on the Internet’s potential for democracy. These include: the anarchic nature of the Internet, its interactive features which allow direct feedback to individual articles and opinions, the possibility for web sites to create content primarily through the contributions of its readers, and longevity of materials (NUA, 2001). Early users have continuing excitement about the Internet and saw it as stimulating positive change in people’s lives by creating new forms of interaction and enhancing relationship. According to Baym (1997) and Wellman (2001) the Internet would restore community by providing a meeting space for people with common interest, overcoming limitations of space and time. Also, the Internet has rapidly transformed the financial markets by revolutionizing the way financial services are created, managed and delivered. There have been many claims in recent years that the Internet offers new opportunities to engage in politics as it brings new opportunities for direct access to politically relevant information.   


    With the perceived benefits of the internet, it is not surprising to know that most Hong Kong individuals are already exposed with the processes brought about by internet technology. Besides, Hong Kong is recognized as one of the world’s technology hub. As started in the previous chapter, Hong Kong is now among the countries in Asia with the highest rates of internet penetration and information infrastructure. The country’s local administration has in fact shown active participation in encouraging Hong Kong citizen to be pro-active in becoming a more digitally inclusive society.


    In relation to this research, the internet served as the main channel in the procurement and acquisition of online merchandise. This is called electronic commerce (e-commerce) or online marketing. The term e-commerce is simply defined as transacting through electronic means. Gathering, relaying and exchanging information electronically are all covered by e-commerce. Electronic media used for e-commerce can be through the internet, telephone or fax machines (Dunt & Harper, 2002). Through e-commerce, the traditional shopping is replaced by click-of-the-button process and people are able to purchase their needs at the most convenient location and most immediate time possible.


     


  • The 28 respondents who have access to the internet for the past six (6) months stated that they are using the internet or WWW for more than two (2) years.

  • Similarly, people are frequently visiting the cyberspace because of its variety of functions. The property of the web which makes users go back is the ability to adjust sites to the different needs, wants, desires and, even personalities of each individual customer (Abbate, 1999; Castells, 2001). Sproull and Kiesler (1991) observed the importance of understanding internet’s social impact. One reason to expect significant social impact is the internet’s role in communication. For instance in the business and economic sectors, the increasing competition worldwide, escalating demands made by customers and the rapid pace of change in technology are forcing companies to review the way they do business, what kinds of products and services they offer, and the speed with which they release products to market using the internet. The basis of e-business is on the processing and transmission of digitized information such as sound, text and images from one computer to another electronic instrument or device (Hecker, 2001). According to the Organization for Economic Cooperation and Development (OECD) (Wyckoff & Colecchia, 1999), businesses have various reasons for introducing e-commerce into their operations. With the commercialism of the internet and the already wide acceptance and use of Information and Communications Technologies (ICT) hardware and software, tasks that are difficult and stressful to perform before are now as easy as 1-2-3 or even A-B-C.  Proponents of the new technologies boast that these new systems will enable work to become faster and more accurate. Politically speaking, experts believe that the internet may have considerable potential to reach and engage opinion leaders who influence the thinking and behavior of others (Schwartz, 1996; Davis, Elin & Reeher, 2002). There are other uses of the internet that attracts people and allows them to continue their frequent visit such as its potentiality in as a medium of education and learning, entertainment, and information dissemination. For many people who have access to web sites, it opened a whole world of discovery for them.


     


  • With the 28 respondents who have access over the internet in the past six (6) months, nineteen (19) respondents reported that they do it everyday, three (3) for 1-3 times per week, and six (6) for 4-6 times per week.

  • As directly related with the above discussion, people visit the internet to do their individual thing such as searching information, e-commerce, and the likes. Considering the benefits that they derived from it, people are more likely to be dependent in the internet. The people of Hong Kong, in particular display a high degree of interest and comfort in using technology-based products and services. It has been observed that the high affiliation of the people on using the internet technology for different purposes (e.g. making purchases) is mainly due to convenience, availability, and other factors. In particular, the Internet’s speed, interactivity and connectivity greatly facilitate the acquisition and absorption of knowledge, offering developing countries and its people unprecedented opportunities to enhance and improve the ways of living (Cairncross, 1997; Ohmae, 1990). Speed may be considered as one of internet’s feature in the e-commerce. Through the fast speed, it enables business to automate many operations and create worldwide products, 24-hours per day at low cost (Guttman, 2002).


    Among the consumers, they need not visit nearby local stores to buy their needs. Through the internet, needed goods can be viewed, order and paid by online means while sitting down in front of a computer. Foucault and Scheufele (2002) also noted that consumers are interested in making purchases online due to the high availability of the goods offered. Thus, with the beneficial outcomes of the internet to its regular users, it is apparent in that indeed the internet is already an essential element of contemporary life.


     


     


    References


     


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