Hong Kong people who live or work in mainland China are called “bei piao”, a derogatory term meaning vagabond.
That doesn’t bother Chow Chun-sang who hopes to grow his Beijing start-up big enough to ride it back to Hong Kong.
Chow grew up in Hong Kong and worked here for eight years before setting out for the mainland where he went into the app business.
The app, called LetsGuang, helps small shops attract customers.
Chow knew from a young age he wanted to be in business.
“I sold animation flash cards when I was in primary school. When I was older, I sold PlayStations.”
However, Chow’s parents wanted him to be a wage earner with a stable income, so he worked in an office for eight years.
But he knew it wasn’t the kind of life he wanted. One day, when his parents were traveling overseas, Chow quietly quit his job and began thinking about a business venture.
Chow says the high cost of living in Hong Kong makes it unsuitable for start-ups.
He chose Beijing for two reasons.
First, Chow had worked for Shui On Group in Beijing for a year, which is why he knows the place very well.
Second, the business environment favors start-ups. “There are always people talking about starting their own business in every cafe, he says.
Chow is now working with shops he had come to know during his Shui On stint, including ECMall.
LetsGuang works in such a way that once users step into the store, they earn points that can be redeemed for some items.
In short, it’s not something someone would expect in a Zara or H&M store.
“I hope the app can help small merchants attract customers”, Chow says.
A shop selling aromatic products in ECMall previously only had 20 customers a day.
When Chow designed a promotion campaign for the store based on his app, customers could get samples after accumulating 150 points.
Daily visitors surged to more than 200 during the promotion period and revenue rose more than 30 percent, Chow says.
However, Chow says monetizing the app is a challenge.
“I always thought that people should pay after trying your service. The reality is that no one is willing to pay at all.”
Chow is not alone. Many online-to-offline businesses are also having trouble making a profit.
“Even red-hot apps such as car-hiring apps and take-away apps are unable to earn a profit. They have to depend on hefty subsidies,” he says.
LetsGuang’s monthly operating cost is about HK$200,000.
At that rate, Chow says there’s only enough money to operate for another year.
“That’s why I have to move fast.”
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