AMI-Partners Survey Shows Huge Surge in Internet Spending by Hong Kong Based SMBs; Hong Kong SMBs are on Track to Spend US $360 Million by 2009 -- up Substantially from US $215 Million in 2004 - to Reap the Benefits of the Internet.

NEW YORK -- Small and Medium Businesses (SMBs) in the Hong Kong Special Administrative Region (SAR) are likely to spend more than US $360 million by 2009 to beef up on Internet-related technologies to gain competitive advantage. That level of spending on online technologies compares with US $215 million that was spent in 2004 in Hong Kong and translates to a compound annual growth rate (CAGR) of 11% percent between 2004 and 2009.

The above findings were released today by New York-based Access Markets International (AMI) Partners, Inc., a leading consulting firm that specializes in IT, Internet, telecommunications and business services market intelligence -- with a strong focus on global SMB enterprises. AMI-Partners conducts the industry's most comprehensive annual tracking surveys of SMBs in more than 20 countries, including North America (U.S. and Canada); Europe (U.K., France, Germany, Czech Republic, Poland and Russia); Asia-Pacific (Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam); and Latin America (Brazil and Mexico).

Hong Kong SMBs Riding On the Internet

"SMBs in Hong Kong have invested a total of US$1.25 billion in 2004 on IT alone, and up to 17 percent of this figure went into Internet-related spending," said Jackie Chan, New York based senior analyst at AMI-Partners. "Their investment priorities in the next 12 months will center on further leveraging the Internet."

As it stands now, Greater South China (GSC) is one of the most economically dynamic regions in the world. It offers significant potential for integrating the Internet in ways that will revolutionize production and distribution. Hong Kong is one of the leading economies of GSC. More than 98 percent of all businesses in Hong Kong are SMBs and together employ 60 percent of the Hong Kong's workforce. These SMBs have significant investments in IT to be able to enhance their global competitiveness. "Hong Kong faces limitations in that its domestic market is small and buyers are reluctant to spend on the Internet,'' Ms Chan said. "However, Hong Kong's long-valued role as a middleman and its dynamic business community are its two biggest assets in overcoming these constraints."

Hong Kong plays a pivotal role as the central intermediary between China and the West, and to some extent between Taiwan and China's southern provinces. "It remains to be seen whether this role will become less important over time,'' Ms Chan noted. "That's because the Internet can enable China's provinces to participate directly in the global economy."

Almost all of Hong Kong's small businesses (SBs) are family-owned and have a relatively small scale of operations. As such, it is even more critical for these SBs to be better equipped in competing in the global economy using the Internet as a key leverage. "In our survey, we found that more than 60 percent of SMBs in Hong Kong expressed an intent to use the Internet to strengthen their customer relationships, and over 50 percent sought to automate various business processes via the Internet,'' Ms Chan added. "The power of Hong Kong businesses as packagers and retailers depends on the establishment of flexible business networks that extend throughout Asia and the world."

About the Studies

AMI's 2005-2006 Hong Kong Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2005-2006 Hong Kong Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SMBs across Hong Kong, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications or multimedia.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last nine years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 20 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.