Mr. Feng HONG, Co-founder and Senior Vice President of Xiaomi, the world’s fourth-biggest smartphone company, addressed graduates from class of 2019 at the EMBA-Global Asia Recognition Ceremony held on 22 June.

After graduating from Shanghai Jiao Tong University with a degree in computer science and engineering, Mr. Hong received a Master’s Degree in computer science from Purdue University. After a career in Google, Mr. Hong initially spearheaded the development of Xiaomi’s MIUI platform, the smartphone’s operating system. He now oversees Xiaomi Finance, the firm’s financial services arms.

Mr. Hong congratulated the new graduates and noted that the EMBA-Global Asia is a very respected programme before sharing some lessons from his nine years at Xiaomi.

While the retail price of most products is usually six times the manufacturing cost, and 8 to 10 times for clothing, Xiaomi’s mark-up is typically just 10 percent. The company’s logic is to look to the bigger picture and the longer term, explained Mr. Hong. Selling at a lower price enables the company to sell more products, which further reduces material costs, creating a positive cycle.

“However, we do have a lot of arguments on the pricing part, especially when we enter some areas with traditionally very high margins,” he admitted.

Setting the price for the company’s air purifiers a few years ago was one such occasion. These products typically retail for about 3-4000 RMB and they cost about 900 RMB to produce.  “So how to price them? We thought about half the price was already good enough, [but] our CEO decided to set the price at 899 RMB,” Mr. Hong recalls.

The production team was not happy, with one member complaining that the target price was an insult to his work. Mr. Hong tried to convince the CEO to increase the price at least to 999 RMB, but the CEO told him: “We need to be disciplined at making just a small, reasonable profit on everything we do, and we need to do it religiously. I want to build trust with our customers so one day when they go to our store, they don’t need to look at the price tags, they just know they’re getting a pure product at the best price in town. Control your greed.” The discussion was over.

Over time, as sales revenues have multiplied, Mr. Hong has come to understand and appreciate the CEO’s strategy.

Xiaomi has also pursued innovative product development strategies to produce its many smart devices. Most of these products are built by the firm’s eco-system companies, explains Mr. Hong.

In 2014, the firm saw a great opportunity with smart devices, “We believed all those devices would be upgraded with connecting capabilities and they would be connected all together in the years to come. The problem was how to capture this trend.”

The company eventually decided to invest in incubation.

“We identified teams with good product engineering skills and provided all the other support,” he says. That support included providing all the start-up funds, sharing sales and marketing support, and providing supply chain support connections to allow these companies to get volume discounts very quickly.

The model has been a great success and Xiaomi now counts more than 100 companies in its eco-system. Between them, the companies are now launching almost one product every four days.

“Sometimes, it may be the right decision to step back, to take less, and do so willingly,” Mr. Hong advised the graduates. “After all, good companies make profits, but great companies win the hearts and minds.”

The HKU-Lingnan-Florida Platform Competition Conference co-organised by HKU Faculty of Business and Economics and ICGD Industrial Economics and Competition Policy Programme, Lingnan University Centre for Competition Policy and Regulation, and University of Florida Fredric G. Levin College of Law was held on June 20 and 21, 2019. Over 90 participants from across the globe, including seasoned legal practitioners, industry professionals and academics attended the two-day conference.

Dean Hongbin Cai

Professor Hongbin Cai, Dean of HKU Faculty of Business and Economics kick-started the two-day event with a warm welcome to our international speakers and participants. He highlights the importance of fair competition amongst firms, which is instrumental to economic development. Given the topic of competition law and policy as well as anti-monopoly is increasingly relevant in China including Hong Kong, the conference is an excellent opportunity to bridge the minds of world-class academic researchers and professional practitioners to discuss these business and law disciplines.

Mr. Xuan Wang
Mr. Brent Snyder

The first keynote speaker, Mr. Xuan Wang, Principal Staff Member of Anti-monopoly Bureau, State Administration for Market Regulation, talked about the anti-monopoly scene in China and its future outlook in his keynote speech titled “Digital Platform and Competition Policy”, whereas our second keynote speaker, Mr. Brent Snyder, Chief Executive Officer from the Hong Kong Competition Commission shared his insights on the enforcement of Hong Kong’s Competition Ordinance.

Panel one: Enforcement in Multi-sided Platforms

Four panel sessions were also presented. Panel one discussed “Enforcement in Multi-sided Platforms”. Speakers include Ms. Na Dawson (Analysis Group Inc.), Dr. Youngjin Jung (Kim & Chang), Mr. Alexander Okuliar (Orrick, Herrington & Sutcliffe) and Mr. Sadaaki Suwazono (Japan Faire Trade Commission). The panel was moderated by Professor Wing Suen from HKU Faculty of Business and Economics and Ms. Auraellia Wang from Google.

Panel two: Mergers in the Digital Economy

Panel two explored “Mergers in the Digital Economy”. Speakers include Mr. Herbert Fung (Competition and Consumer Commission of Singapore), Mr. Wayne Leach (King & Wood Mallesons), Dr. Wesley Wang (T&D Associates) and Dr. Jason Wu (Compass Lexecon). The panel was moderated by Mr. Andrew Foster from Skadden, Arps, Slate, Meagher & Flom.

The third panel is titled “Big Data and AI”. Mr. John Choi (Shin & Kim), Ms. Patricia Galvan (US Federal Trade Commission) and Mr. Atsushi Yamada (Anderson Mori & Tomotsune) were speakers of the panel, and was moderated by Ms. Ruth Chen (Facebook),

Ms. Patricia Galvan
Ms. Ruth Chen

Panel four: Platforms in e-Commerce and Fintech. Ms. Karen Leung (left), Professor Chen Lin (second left), Mr. Knut Fournier (third left) and Professor Daniel Sokol (right)

The final panel focused on “Platforms in e-Commerce and Fintech”. Panel moderator Mr. Knut Fournier was joined by three speakers including Ms. Karen Leung (Uber), Professor Chen Lin (HKU Faculty of Business and Economics) and Professor Daniel Sokol (University of Florida Fredric G. Levin College of Law).

Day two of the conference focused primarily on bridging the understanding of online platforms across academic disciplines. Conference co-organiser Professor Daniel Sokol, University of Florida Research Foundation Professor and University Term Professor from University of Florida Fredric G. Levin College of Law began the day with a lively and interactive opening and chaired the first paper session. With four speakers, the session covered a dynamic range of research papers. Professor Kenneth Cheng from University of Florida explored optimal pricing models, Dr. Ruomeng Cui from Emory University examined the value of high-quality logistics, Dr. Sunny Huang from The Hong Kong University of Science and Technology compared agency models and wholesale models, and Dr. Angela Zhang, Associate Professor from HKU Faculty of Law discussed crowd-judging.

Professor Lin Ping, conference co-organiser from Lingnan University chaired the second paper session with three speakers. Professor Hung-Hao Chang from National Taiwan University explored the impact of Airbnb on the hotel industry and its implications to antitrust enforcement. Professor Guofu Tan from University of Southern California focused on price competition in multi-sided markets and Dr. Chiara Farronato from Harvard Business School discussed the consumer protection in an online world.

In the third paper session chaired by Professor Jin Li from HKU Faculty of Business and Economics, three speakers presented their papers. Dr. Wesley Koo from INSEAD talked about platform rules and government regulations, Dr. Kelvin Kwok from HKU Faculty of Law discussed television platform competition: the TVB case and Dr. Steven Xu from HKU Faculty of Business and Economics presented his paper on online reviews.

Dr. Steven Xu

The final session chaired by conference co-orgnaniser Professor Yuk-fai Fong of HKU Faculty of Business and Economics also had three speakers. Professor Ramnath Chellappa from Emory University focused on platform preannouncement strategies, Professor Jay Choi from Michigan State University and Yonsei University reviewed competition on platform markets with ‘zero price’ products and Mr. Richard Xu, Ph.D Studence in Economics at the University of Southern California examined the impact of ad-avoidance technologies in the market for video streaming.

On both days of the conference, practitioners and academics from different sectors and multi-disciplines alike engaged in fruitful, dynamic and thought-provoking discussions in the field of online platforms and competition analysis.

We would like to extend our thanks to the following organisations and companies for sponsoring the conference:

Analysis Group Inc.
Compass Lexecon
Kim & Chang
King & Wood Mallesons
Orrick, Herrington & Sutcliffe
Shin & Kim
Skadden, Arps, Slate, Meagher & Flom
T&D Associates
University of Florida Fredic G. Levin College of Law

The Faculty of Business and Economics has successfully organised its first PhD Recruitment Camp from 30 April to 2 May 2019. We are delighted that 51 high-calibre participants with diverse academic background coming from China, USA, Australia and Singapore, have joined the event to learn more about our PhD programme.

To kick off the event, Professor Hongbin Cai, Dean of Faculty of Business and Economics, gave his welcome speech to the prospective students at the opening ceremony. Participants then took part in the three-day programme filled with a series of interactive activities including welcome dinner, thematic talks, campus tour, sample lectures, workshops, student and alumni sharing and individual assessment. Through these engaging and informative sessions, participants have experienced our vibrant research community and explored their passion in pursuing a PhD programme in our Faculty.

We would also like to express our gratitude to our faculty members and PhD students, for their support and hard work to make the camp a successful event.

At a time when nine out of 10 start-ups fail, it is increasingly important to identify the actions and behaviours that are most likely to lead to successful entrepreneurship.

Recently awarded the Ian Davies Professorship in Ethics, Professor Simon S.K. LAM has been conducting research into ethical leadership and entrepreneurship as well as teaching the subject for many years. He believes that the study of business ethics is crucial to understanding what lies behind the poor management decisions that often result in company failures. His research has shown that ethical behaviour is a key foundation stone for a successful business. Ethical behaviour leads to customer buy-in, resulting in higher sales and more profits, stronger employee loyalty, an increase in the company’s appeal as an employer, enhanced appeal to investors who know their money will be wisely spent, and a stronger company reputation.

There is a Chinese saying that goes: “become rich, then be a paragon of virtue (發財立品)”. Professor Lam, however, thinks the opposite. “My research provides strong and clear evidence showing that the ethical behaviour of entrepreneurs can bring substantial and significant benefits to their companies. Start-ups will have a higher survival rate when the management philosophy of the founders is based on ethical practices and behaviour,” he says.

Professor Lam has published 17 A-grade management journal papers in his research areas as well as a best-selling book, “Entrepreneurial Quotient”, published in 2018. “Having conducted years of in-depth research of these cases, I have created a highly practical ‘Entrepreneurial Quotient’ system which has become a pocket guide manual that readers can carry with them for reference on their entrepreneurial journey,” he explains.

Professor Lam is Professor of Management at FBE, as well as Director of the Centre of Asian Entrepreneurship and Business Values, and Head of the Faculty’s Management and Strategy Area. He is also a senior editor of the Asia Pacific Journal of Management.

The Ian Davies Professorship in Ethics espouses the qualities of integrity, the spirit and principles of ethics and the sharing of knowledge gained for the betterment of society.

For centuries, China had a strong economy and a vibrant civilization, yet it was overtaken by Europe in the 18th century. The possible causes of China’s decline during this period have been the focus of Professor James K.S. KUNG’s work.

Professor Kung of HKU’s Faculty of Business and Economics was recently awarded the Sein and Isaac Souede Professorship in support of his academic and research activities in the economic history of China, its institutions and its political economy of development. His research helps generate insights into understanding Chinese society today. His recent research examines the origins of the country’s meritocratic civil exam system and its long-term effects on human capital development, as well as political exchanges and corruption in contemporary China.

He finds that China’s civil exam system and the prestige and higher earnings of those who succeeded in it probably deeply inspired the Confucian culture of greatly valuing education. As a descendant of the Kungs from Suzhou where nine jinshis (進士) were produced in the Ming-Qing period with his family surname, Professor Kung said “I would surely be strongly motivated to sit for the keju exam and probably would stand a fair chance — compared to the extremely low 0.016% for those with no forebears in the family — of achieving some level of exam qualifications if I had lived in late imperial times.”

His research has also shown how China’s political institutions and policies can influence the economy, and how relying on regional officials to drive growth can result in rampant corruption. He studied data on over a million land transactions between 2004 and 2016 where local government was the sole seller, and found that firms associated with members of China’s supreme political elites — the Politburo — obtained a price discount compared to those without the same connections. The provincial party officials who provided the discount to these “princeling” firms were subsequently more likely to get promotions. However, since President Xi Jinping launched his anti-graft campaign, the number of fraudulent land dealings has significantly dropped.

Professor Kung’s research emphasises the importance of causal relationships between events and is based on intensive data collection from archives coupled with the latest econometric techniques for assessing causation. “What we hope to have demonstrated, as empirical economists, is the importance of asking the right question in the right setting, and of coming up with a novel design of research methodology, both of which determine what kind of data would be required for conducting the analysis,” he explains.

“Sometimes, it may take years to assemble enough data to enable us to conduct a meaningful analysis,” says Professor Kung. “You may say that the kind of work that we do is analogous to what investigative journalists typically do, except we go beyond sheer case studies to demonstrate causal relationships as well.”

The Sein and Isaac Souede Professorship in Economic History supports fact-based thought leadership that allows new knowledge to be freely shared and give new insights into understanding society.

Increasing digitalisation and connectivity in the world have resulted in the creation of huge quantities of data. Used correctly, big data can transform and improve businesses and sectors such as public healthcare through innovation and new technology.

Professor Haipeng SHEN, Professor of Innovation and Information Management and Associate Dean (Executive Education) at HKU Business School, is the recent recipient of the Patrick S C Poon Professorship in Analytics and Innovation. The Professorship will support his academic and research activities in data-driven decision-making in the face of uncertainty, including fundamental methodological research about the challenges imposed by big data as well as interdisciplinary analytical research in business analytics and precision medicine. Professor Shen uses analytics to extract the most useful and actionable information to help organisations increase their competitive edge and efficiency through better decision-making.

He is also working with medical professionals to enhance treatments for patients at a lower cost and enable hospitals to run more efficiently. His research into strokes has led to better quality of care for stroke patients. He works with neurologists and cardiologists to use analytics to build innovative data-driven support systems that will improve clinical decision-making, leading to better management of chronic diseases.

The Patrick S C Poon Professorship in Analytics and Innovation builds on HKU’s leading role in researching and teaching these drivers of sustainable progress to create a better world. “Dr. Patrick Poon is one of the earliest graduates from HKU’s Department of Statistics and Actuarial Science, he knows data science well. He is also a successful entrepreneur and a long-time supporter of HKU and the community,” Professor Shen said. “I feel extremely fortunate and greatly honoured to be associated with him through this endowed professorship”.

“Data creates connectivity. It connects me with extraordinary people like Dr. Poon,” Professor Shen added. “I intend to use this generous support to deepen and broaden my research and knowledge exchange activities in business analytics and healthcare management. I am also dedicated to further pursuing inter-faculty and inter-institution initiatives to continue to generate real impacts through data science”.

Professor Shen was the inaugural winner of the Faculty Special Contribution Teaching Award in 2018. He founded the Master of Science of Business Analytics programme and the Executive Master of Business Administration programme (in collaboration with Peking University Guanghua School of Management).

To cheer up final-year students before their last exam period at HKU and to celebrate them joining the FBE alumni family in advance, the Faculty organized a #FBEalumni pop-up event at K.K. Leung Building Concourse on April 24, 2019.

As millennials, students love to share, inspire, and express who we are on social media. So we set up a trendy Instagram photo-booth, together with eye-catching backdrops and props, especially a replica of the famous HKU East Gate, where students can strike a pose, snap a shot, and have their photos printed by the hashtag #FBEalumni via their Instagram accounts. Tasty handmade and picture-worthy cookies were exclusively distributed to those graduates-to-be. Hot and fresh popcorn was also passed to HKU community members who followed our FBE social media accounts.

This event captured the wonderful moments our final year students spent on campus. The Faculty is excited to stay connected with our new FBE alumni and support them throughout their endeavour beyond HKU.

     

     

     

The winning team members (2nd from left) Rachel Cha, Gary Ngai, Irving Teh and Kony Kwong, with representatives from Hong Kong Maxim’s Group and JTH Group.

The HKU team consisting of four BBA in International Business and Global Management students, CHA Lok Yiu Rachel, NGAI Tai Ki Gary, TEH Irving and KWONG Hing Tim Kony, is named as one of the four winning teams in the JOS Innovation Awards 2018-19. In this year competition, participants were asked to suggest ideas on improving the customer experience in different sectors, including technology, insurance, food & beverage services and property.

Partnering with Hong Kong Maxim’s Group, the HKU team Finnovate has suggested a proposal on expanding features of Maxim’s mobile application which focuses on customer health, including a personalised health tracking portal that provides key insights based on consumer behavior, and a one-click smart ordering function. By utilising big data and technologies, the team believes that customers can gain valuable insights on their eating habits, intelligent and adaptive food recommendations, and facilitate a healthier diet and lifestyle.

The JOS Innovation Awards 2018-19 this year attracted over 50 teams. The shortlisted teams attended an interactive sharing session and received guidance from business leaders. Following a final contest, four winning teams each won HK$30,000 and further mentorship sessions.

Organised by the Ivey Business School, the Scotiabank International Case Competition took place from 20 – 23 March.

A team of four undergraduate students (photo from left), consisting of BBA(Law)&LLB student AU-YEUNG Yau Man and BBA(IBGM) students NGAI Siu Chung, CHEUNG Ming Yan and WONG Yat Nam, was named the finalist and 2nd Runner-up in the competition. The team was coached by the Faculty Advisor Mr. Albert Fung.

Presented and sponsored by the Scotiabank Digital Banking Lab at Ivey and Scotiabank, the four-day packed case competition gathered a total of 13 teams from 11 countries. The business case of this year focused on challenges and opportunities of the evolving consumer automobile industry. In addition to the vigorous case preparation and presentations, the team got the opportunity to tour the Mercedes-Benz London dealership, and had better understanding about the car buying and servicing process in Canada.

The competition also provides an excellent platform for students to experience different cultures and international networking, and get real experience with international business.

Student feedback about the competition:

Throughout the contest, we were thoroughly humbled by the breadth and importance of the industry insights, in particular how major stakeholders connect with each other. The scale of the competition speaks for itself. Participants are all endowed with versatile backgrounds and unique talents. We met tons of great minds through social events and the final presentation.

The feedback from judges are valuable. Their experience in the banking and consulting industries facilitates our reflection on case management, and benefits our future career. Professionalism aside, we were able to have better cultural sensitivity, which is often considered indispensable for a global leader.