Ogilvy & Mather has an answer to the economic malaise gripping Hong Kong: positive thinking. At least that's the theory behind its new "Bounceback Hong Kong!" campaign.
Backed by San Miguel Corp, the KFC fast-food chain and other sponsors, the global agency is peppering the city with upbeat ads to counter what it calls "a constant outbreak of bad news." That may be easier said than done as the city faces soaring unemployment, a stalled economy and a growing perception that it's losing its edge as Asia's prime business hub.
"Hong Kong has no high-tech base, no research and development, no software," said Yoon Lai Choo, who helps manage US$1 billion at Comgest (Far East) Ltd. "I don't know where it's going."
Hong Kong's economy may never rebound to the 10 percent growth rate it enjoyed as recently as two years ago, analysts say. China's entry to the WTO has lured companies like Oracle Corp and Cushman & Wakefield Inc, eager for lower costs and faster growth.
Job cuts at companies such as Pacific Century CyberWorks Ltd lifted unemployment to a record 7 percent in March, curbing spending and extending a three-year drop in consumer prices. That may delay a rebound in an economy that grew just 0.1 percent last year and shrank in the fourth quarter.
Though Hong Kong residents could use some good news, an advertising blitz may not be enough to restore confidence.
"People want to see the light at the end of the tunnel -- they've had enough of the gloom," said Lau Siu-kai, chairman of Hong Kong University's sociology department. Yet the Ogilvy campaign "will be greeted with a degree of cynicism."
The reaction wasn't long in coming.
The South China Morning Post, the main English-language newspaper, immediately poked fun at Ogilvy's contention that the 10 minutes a day Hong Kong's 7 million residents spend worrying about the city's future would be better spent eating 600,000 Chinese egg tarts or building 21 more giant statues of Buddha.
"Are you spending too much time worrying about your future, stock portfolio, property price and job?" the paper wrote in its "Lai See" humor column. "Then you could do with an egg tart."
Joseph Wang, Ogilvy's vice chairman for greater China, says cynicism may be Hong Kong's biggest problem. "It's a mindset thing," Wang said. "To me, it's about the cup being three-quarters full, and everyone is focused on it being one-quarter empty."
Wang's slogans aim to be catchy.
"There's a bump in the road. Get over it," reads an ad on local taxis. Another, highlighting the city's nightlife, says, "Don't be down, get down."
While the Ogilvy campaign may brighten the urban landscape, Hong Kong's troubles run deeper. Investors said countries such as South Korea and China are becoming more attractive because their domestic economies are stronger.
Hong Kong lost its ranking as Asia's best place to do business to Singapore last month in a report by the Economist Intelligence Unit, which said Hong Kong is losing trade to cheaper ports in mainland China and its government is becoming less effective, the survey said.
Adding to the negative press, Fortune magazine's May 16 issue carries a cover story titled, "Hong Kong: Who Needs It?" The government issued statements rebutting both reports.
The IMF expects Hong Kong's economy to grow 1.5 percent this year, the slowest in Asia outside Japan.
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