Considered the gateway to mainland China, Hong Kong has always provided plenty of opportunities for British Food & Drink brands looking to gain market share in Asia. With low taxes and no import tariffs, plus fluency in English throughout business, it is inevitable Hong Kong will continue to grow as a desired export market for British suppliers.
An hour ferry-ride across to Macao and opportunities are just as widespread, fuelled by casino-resorts that attract wealthy visitors from across the globe.
UK’s Finest had a chat with Arthur Yu from the British Embassy in Hong Kong to gain insight into one of the world’s easiest places to do business.
- Hong Kong is one of the easiest countries to do business in. Minimal trade barriers make it an attractive option for re-exporting products to China.
- Healthy food products are in demand. This includes 0% beer, dried fruit crisps and keto biscuits.
- Make sure your marketing showcases your product is from the UK, as British products are highly regarded in the market.
Hi Arthur. Thank you for taking the time to speak with us about Hong Kong and Macao.
Can you give our members some background on yourself and how the British Embassy in-market supports UK businesses looking to export to both markets?
A big hello from Hong Kong! I am Arthur, Head of Consumer & Retail at the Department for International Trade, Hong Kong.
Having spent half of my childhood in the UK, my taste buds were developed in English taverns and farmers’ markets, enjoying many styles of cuisines around the country. I feel privileged to have the opportunity to help introduce these familiar flavours into Hong Kong.
The Department for International Trade (DIT) in Hong Kong supports UK companies looking to export here by providing market briefings, access to tradeshows and government-to-government liaison. While the first 2 duties are quite visible to exporters, the third is often a fun part of the job. Previously I have been deployed to ‘rescue’ containers of milk or tonnes of chicken wings that are stuck at customs!
Firstly, focussing on Hong Kong, why should our UK’s Finest members think about exporting to the market?
Hong Kong is one of the easiest places to do business for almost every sector. The World Bank ranked Hong Kong as 3rd out of 190 countries for the ease of doing business, with the market just losing out to New Zealand (3rd) and Singapore (2nd). It has a population that does not need much convincing to appreciate the UK’s lifestyle and products.
Trade barriers are almost non-existent when importing British products. We have world-class infrastructure to the rest of the world and into mainland China, which also makes it attractive for re-exporting.
Exciting things are taking place in Hong Kong, from dawn to dusk!
How has COVID impacted the market in Hong Kong?
Before COVID-19, the city hosted 55.01 million visitors (2019), a majority of which are from mainland China. Hong Kong’s vast assortment of international brands, zero sales tax, lower retail prices (relative to mainland China), a broad diversity of authentic products and proximity means mainland Chinese tourists are one of the largest contributors to the sale of fashion, cosmetics and personal care products in Hong Kong.
In face of the global pandemic, the border remains closed to a large extent. Yet domestic consumption seems to have absorbed the impact and achieved a bounce-back in February 2021.
“Trade barriers are almost non-existent when importing British products. We have world-class infrastructure to the rest of the world and into mainland China, which also makes it attractive for re-exporting.”
Are there any particular opportunities that you’ve seen as a result of the bounce-back?
Although food services have been clouded with uncertainties as public health control has been changing constantly, this has paved the way for the growth and popularity of e-grocery. The e-commerce market is growing very fast in Hong Kong and an online survey in 2021 showed that 84% of respondents did their grocery shopping online. Although only a small survey, it shows that habits are changing!
What other Food & Drink trends should our members know about?
Hong Kong is a ‘city of foodies’ known for its broad range of dining options. Whilst it is easy to export to Hong Kong, the city has a rigorous checking system for high-risk items e.g. meat, dairy, seafood. The food safety regulations are separate from China. Worth noting too that spirits (i.e. at or above 30% abv) are subject to 100% excise duty. It is one of the few items with a significant fiscal entry barrier. My colleagues and I can advise you on the food regulations and licensing requirements you need to be aware of when exporting here.
Opportunities for UK food & drink producers include:
- Innovative meat-free protein products
- Functional / good-for-you / free-from
- Natural & organic
- Meat & poultry
Recently vegan and plant-based food has become popular thanks to a successful campaign by Green Monday, encouraging the population to eat meat-free 1 day a week. But conversion cannot be compared to Western countries. Instead, Hong Kong consumers prefer to try conventional food items with innovative and healthy twists such as zero-alcohol beer, dried fruit crisps and keto biscuits.
Some of our members may not know much about the market of Macao. What can you tell us about its business environment?
Macao is an hour ferry ride from Hong Kong (as well as linked by bridge). Although Macao’s total land area only amounts to 30.5km2 and has a population of 667,400 – the Special Administrative Region is awash with opportunities for British companies.
Macao is often cited as the world’s gaming hub: in 2018 casino revenues amounted to £25bn. The International Monetary Fund expects Macao to overtake Qatar as the richest place in the world very soon.
Macao is limited in resources, and imports almost all goods and services to support its 35.8 million visitors and 36,000 hotel rooms. Similar to Hong Kong, mainland Chinese tourists make up a large proportion of visitors. In fact, approximately 70% of tourists were from China in 2017, with the remaining 30% consisting of Hong Kong (18%), Taiwan (3%) and the rest of the world (9%).
For the past few years, all six of Macao’s major casino-resort operators have been investing in expansion programmes to diversify their revenues – retail, restaurants, hotels and the experience economy play a large role in this expansion, offering lots of opportunities for companies.
“The Special Administrative Region [in Macao] is awash with opportunities for British companies.”
How does conducting business in Hong Kong and Macao compare to the UK, either when meeting in person or communicating digitally via email/video calls.
Hong Kong’s business community is predominantly proficient in English. Despite being under the umbrella of the Chinese language, be aware that the mother tongue of the city is Cantonese. We write in traditional Chinese, as opposed to Mandarin and simplified Chinese in mainland China.
It is standard to keep in touch with each other via e-mails, phone calls and video meeting platforms such as Zoom or Teams. Some might find instant messengers such as Whatsapp a handy tool, but it’s always regarded as an appropriate tool for business communications.
When dealing with Hong Kong contacts you might be amazed by their ‘can-do’ spirit and efficiency. However on the flip-side, we can sometimes speak in an undecorated tone, so don’t take it personally, we always mean well!
How does re-exporting to China work? Is this easy to do?
Almost every trader would more or less have a footprint in re-exporting products from Hong Kong to mainland China. The advice from me would be to protect your IP, be aware of any payable tariffs & regulations and develop tailored messaging for the market. DIT has a strong team in China that stands ready to support your expansion to the market.
If companies are supplying Food and Drink products, entry can be complicated. While Hong Kong is very much aligned with international food safety standards, mainland China operates in a different way. Products will need to be registered and importable items are very much limited to an approved list.
So for Food & Drink brands, without going through the time-consuming procedures, you could consider using Hong Kong as a base for cross-border trading. It is one form of e-commerce that might allow suppliers to get around some regulations by supplying from abroad.
Don’t forget that some UK brands gain their first China exposure through Chinese tourists visiting Hong Kong and trying your products here.
Thank you, Arthur.
One UK business who has seen success in Hong Kong is East of England popcorn company, Joe & Seph’s. We caught up with Adam Sopher from Joe & Seph’s to discuss how the company broke into the Hong Kong market.
Hi Adam, thanks for speaking to us. How did you end up exporting your popcorn to Hong Kong?
The order is a result of an introduction at a Meet the Buyer event organised by the Department for International Trade. The buyer was purchasing for a premium chain of 40 grocery stores, and we’d previously met them when exhibiting at Anuga Food & Drink fair. It just shows that, whether it’s physically promoting your brand at exhibitions and events or registering on an online marketplace and attending virtual Meet the Buyers, brand exposure does lead to future sales.
Would you agree with Arthur that Hong Kong is an easy market to do business in?
Yes, compared to other countries Joe & Seph’s has exported to, Hong Kong was very easy. The amount of paperwork needed was low, which made the process very smooth. For companies that are newer to exporting, Hong Kong would be a great market to take your first step.
Have you got any tips for doing business in Hong Kong that would be useful to share with other UK’s Finest members?
Hong Kong consumers highly regard British products, so I’d recommend that your marketing and messaging showcases the fact that your brand is from the UK. Your DIT Trade Adviser can always put you in touch with in-market experts like Arthur, who would be able to offer the best advice on a market entry strategy.
Thank you both Arthur and Adam for taking the time to speak with us about the Hong Kong and Macao markets. It sounds like there are plenty of exciting opportunities for ambitious UK’s Finest members supplying innovative Food & Drink products.
Interested in exporting to Hong Kong or Macao? We are pleased to announce we have three buyers on UK’s Finest, ready to connect with. Check them out below.
Man Seng Food & Beverage Supply Limited (Macao)
Man Seng belongs to a group of companies whose main activity is selling food products to casinos, restaurants, hotels, restaurants, and retail shops in Macau. Their company would like to source and promote different meat products from the UK.
Man Seng Food & Beverages are interested in purchasing Chilled & Frozen Prepared Foods, Frozen Food, Meats/Poultry and Seafood & Fish.
Xport Foods (Hong Kong)
Xport Foods has 20 years of experienced export management and specialise in the sourcing, development of brands, supply of chilled, ambient and frozen food & drink brands from all over Europe directly to supermarkets large and small.
Xport Foods are interested in suppliers of Confectionery, Chilled & Frozen Prepared Foods, Dairy, Frozen Food, Ingredients, Sweet Preserves (Jams, Honey, Jellies) and Snacks.
759 Store (Hong Kong)
759 Store is a major snacks and grocery chain, with approximately 180 outlets, selling mostly imported products in Hong Kong.
Xport Foods are interested in suppliers of Cakes/Baked, Alcoholic & Non-Alcoholic Drinks, Confectionery, Chilled & Frozen Prepared Foods, Meat/Poultry and much more.
Not registered on UK’s Finest?
In order for you to connect with these buyers, you’ll need to be registered to UK’s Finest as a UK Seller (eligibility criteria applies). Please register via the link below, using our online step-by-step guide to help you craft a profile that stands out from the crowd.