Retail in Asia

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Hong Kong as innovation hub. An interview with Lighthouse Capital

Leo Zhang Portrait

Focusing on the topics of technology, industry, and investment in the Greater Bay Area, the GBA Innovation Summit, part of StartmeupHK Festival, focused on how to build a technological innovation ecosystem in the GBA.

Starting from Hong Kong, it explored how to use technological innovation as the driving force to form a strong and resilient Greater Bay Area development path. Gathering China and the world’s top technology, investment and industry leaders to share and talk about how to empower industries through technology and diversified innovative practices, and jointly explore the future of sustainable development in the Greater Bay Area.

Among the speakers, representatives of Lighthouse Capital, a leading Chinese boutique investment bank focusing on the new economy industry, specializing in financial services for the new economy, committed to be a strategic and capital partner of top 1% new economy entrepreneurs.

Based on the industry-business-entrepreneurship network methodology, the excellent professional service ability of investment banking, and the entrepreneurship of sharing weal and woe with entrepreneurs, Lighthouse Capital empowers the new economic enterprises by providing strategic drive, capital empowerment and quality resources, and help them break through shackles to influence and create the future.

In partnership with StartmeupHK Festival, Retail in Asia had the pleasure to interview Leo Zheng, Founder and CEO of Lighthouse Capital, who shared with us his view on emerging industries empowered by the Greater Bay Area.

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RiA: GBA represents a huge opportunity for investment, being an incubator of innovation. How have you seen that evolving in the past few years?

Leo: The Greater Bay Area has developed very rapidly. This area was originally one of the best places for China’s economic development, and the frontier of China’s reform and opening up. In the past ten years, thanks to the rapid development of mobile Internet, huge demographic dividend and the impact of WTO access, new enterprises in the Greater Bay Area had the chance to grow and set the benchmark in their respective sectors. At the same time, the highly sophisticated supply chain in the Greater Bay Area has also become the foundation and the engine for growth of  companies based in in China headquartered in Beijing or Shanghai that have chosen to  establish their manufacturing or research and development in the Greater Bay Area.

We are very optimistic about entrepreneurship and innovation in the Greater Bay Area, and we believe that the new economy in the Greater Bay Area will grow at a faster rate in the future.

Source: StartmeupHK Festival

RiA: What will you define the key themes of new economy for the GBA?

Leo: The new economy in the Greater Bay Area is consistent with the trend of the new economy in China as a whole, but the Greater Bay Area has many characteristics of its own. We feel that the core themes of the Greater Bay Area include corporate digitalization, globalization and opportunities for traditional industries to upgrade.

On one hand, corporate digitization benefits from the large number of companies in the Greater Bay Area. On the other hand, they have higher acceptance of new services and new suppliers. The opportunities for globalization are mainly due to the integration of culture and talents. Chinese companies have advantages in providing services and products overseas; the upgrading of traditional industries is mainly because the manufacturing industry here is very complete. We have seen many companies use this industrial chain to create consumer technology brands that are popular around the world.

smart industry
Source: Shutterstock

RiA: What are the sectors with higher chances of fast development in the area?

Leo: We see that the Greater Bay Area has a very good performance in logistics, smart manufacturing, retail, industrial Internet and other industries.

We have served 12 companies in the Greater Bay Area and completed private equity financing of more than US$2.5 billion. These companies, such as Root Internet in the industrial Internet field, KK Group in the retail field, and QianDaMa, have also grown very rapidly and became unicorns.

This is possible because of the open vision and unique industrial characteristics of the Greater Bay Area entrepreneurs. For example, the active and huge small and medium-sized enterprises here have allowed for the rapid development of corporate services. The complete manufacturing industry chain in the Greater Bay Area makes it suitable for industrial internet to start and develop. The strong consumption power has enabled the rapid growth of new retail brands.

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RiA: How do you choose your investment and what are the main features of the projects you believe?

Leo: We have different and specific standards for different industries, and at the same time, we will incorporate social values into our evaluation system.

Generally speaking, we hope that the company is in a field of continuous growth, and at the same time the company itself can create long-term value for the field and the population. These companies must be able to grasp the key elements of industry development, rather than just gaining growth in data.

Therefore, sometimes we will explore those companies that have captured the key elements of the industry, but seem to be temporarily lagging behind, and help them become the industry’s number one.