AmEx entices small businesses in Hong Kong with Facebook ad credits

Small merchants in Hong Kong represent the last piece of the pie for the credit card company, which wants as many as possible to accept their plastic to increase its transaction volume. Visa and Mastercard already enjoy mass acceptance, but American Express is less popular among small businesses due to high administration fees they must pay each time a customer swipes a card.

Hong Kong's small businesses are being targeted in a promotional initiative unveiled by American Express in collaboration with Facebook and the Hong Kong Tourism Board (HKTB).

There are approximately 280,000 small and medium enterprises (SMEs) in Hong Kong, constituting more than 98 per cent of the territory’s business establishments. In the wake of the financial tsunami, local businesses have been facing challenges including rocketing operating costs and fierce competition as foreign retail brands enter Hong Kong.

The 'Shop Small Big Rewards' campaign, launched yesterday, starts by incentivising AmEx cardmembers to shop at a wide variety of small merchants to receive double rewards points or Asia Miles on their spending. 

Facebook will offer advertising credits on the social network to selected small merchants who participate in the campaign. When merchants hit a certain target of AmEx card transactions (spending by shoppers), they can redeem Facebook advertisements for free. "We're hopeful that small businesses will be able to leverage Facebook as a marketing platform," said Erik Johnson, vice president, Asia-Pacific, Facebook. This is, of course, a push factor for them to set up AmEx payment platforms.

Small businesses typically do not have the infrastructure, resources or people to undertake any aggressive marketing outreach. Facebook now has 4.4 million users in Hong Kong—a penetration of 60 per cent of the population, according to the company. "By being part of this program, they can promote their business beyond what they'd be able to do on their own," Johnson added.

In addition, AmEx will organise a series of seminars to help small businesses broaden customer reach through social media. Seminar content will discuss the influence of the internet on sales, various forms of viral, search engine and mobile marketing, case studies for retailers and restaurants, cloud computing services, The seminars will be supported by the HKTB's strategic partner, the Quality Tourism Services Association (QTSA), with the first to be held on 29 June.

The seminars are funded by a "small business fund” that will grow based on the number of “likes” of the American Express Hong Kong Facebook page, as well as the number of cardmember transactions. Consumers can make claims on special offers using Facebook's "Offers" product, launched in February, based on merchants they have "liked."

“The campaign brings demonstrable value to Hong Kong’s small businesses,” said Y C Koh, American Express's Asia president for international consumer and small business services.

It is also an extension of AmEx’s Small Business Saturday initiative in the US, which encourages shoppers to support independent retailers on the Saturday after Thanksgiving last year.