Spinning off a startup (2): Hung Hing Printing Group

When running a startup, pay very close attention to the market and be ready to a(Second of three installments)

Startups have been known for their innovative spirit and agility that make them the disruptive force in the digital age. Keen to imbibe the attitude and culture of innovation, established companies have begun setting up their own startups.

Computerworld Hong Kong talked to three established companies in the city – LKK Health Products Group (LKKHPG), Hung Hing Printing Group and the naked Group – who have embarked on this journey to share some thoughts and insights into their experiences. The first installment can be accessed here.

In this second of the three-part series, we put the spotlight on Hung Hing Printing’s foray into the startup world.

Company in transition

Established in 1950, Hung Hing Printing Group is a heavyweight in Hong Kong’s manufacturing industry with expertise in paper printing, corrugated box manufacturing, book and package printing and consumer product packaging.

Headquartered in Hong Kong with four manufacturing plants in China, the company has a workforce of 11,000 employees, including sales representatives in Europe, the US, Canada and South America. It generated total revenues amounting to HK$3 billion in 2015.

But like many traditional businesses, Hung Hing Printing is being threatened by the rampaging tide of digitization sweeping through various industries impacting enterprises of every size. In the company’s case, the printing industry is facing the same challenge as the TV, movie and music industries. Printing is going digital.

Seven years ago, it started on a digital transformation journey that would allow the company to thrive and compete in the market.

“Hung Hing Printing is evolving beyond a traditional printer and developing capabilities to provide customers with digital as well as print products,” said Yee Yu, CIO, Hung Hing Printing Group.

A high-tech startup called Beluga

An important element of the company’s digital transformation is Beluga, a high-tech startup it established in 2012.

Beluga is being run by a 15-member team, which includes experts in design, ideation, product development and technical expertise.

“We are very grateful to have survived this long despite hiccups and setbacks trying to figure out our marketing positioning,” said Yu.

Beluga started out building apps amidst the rush among publishers to digitalize their content from physical books into animated storybook apps. This was fueled by the hype around the business opportunity brought about by the popularity of tablets.

“It did not take long before publishers realized that not every title was going to return a profit as the cost of building an app simply cannot justify it,” Yu recalled.