Mainland China receives most of the attention when exporters talk about eCommerce in Asia nowadays. Hong Kong plays a vital role in China and Asia as a whole as it’s a perfect location to incorporate and manage fulfillment services.
With that said, Hong Kong also has a large eCommerce market with a great appetite for foreign products. The market is mature and wine, baby food, and cosmetics are just a few examples of products that are popular among locals.
Having an e-commerce market that is expected to expand by 40% and reach USD 40 billion by 2023, Hong Kong should definitely be on your radar. In this article, we cover the following topics:
- Which products are in demand in Hong Kong?
- Top eCommerce Platforms
- Trade Fairs for Exporters in Hong Kong
- Shipping & Logistics
Which products are in demand in Hong Kong?
Many foreign brands have successfully launched their products in Hong Kong thanks to consumer’s high purchasing power and a developed eCommerce market.
Here, locals have enjoyed foreign beverages, food, and much more since years back and the market is comparatively developed compared to places like China and Vietnam.
Even if a wide range of products is in high demand in Hong Kong, I have listed some of the most popular below.
Mom & Baby
Mom and baby products are in particularly high demand in Hong Kong, a trend we see in many other Asian countries like mainland China and Vietnam. In as little as ten years, from 2007 – 2017 years, the market tripled and is set to expand even more.
Many foreign companies were also selling baby formula in Hong Kong and channeling the products to mainland China previously. This has changed as the government has imposed stricter regulations and quality inspections on the imports of baby formula.
Hong Kong has no local production of baby formula and the market is affected by large imports of formula into mainland China and where Hong Kong serves as a fulfillment hub. Asia currently has a 53% market share of baby formula and Hong Kong has seen a shortage of products.
Food & Beverages
Hong Kong is a big exporter of processed food and beverages, in 2018, it exported food and beverages for a total value of HKD 69.3 billion where mainland China accounted for 41% and Vietnam for 20%.
With that said, it’s also a large importer of food and beverage products. This tiny financial hub imports as much as 95% of all food and beverage products.
It is a respected and high-value market for all kinds of food products, it’s also worth mentioning that Hong Kong is a stylish ‘shop window’ that attracts 45 million mainland, Chinese tourists, every year.
Australia is a big exporter of food products to Hong Kong and we see a big demand for meat, dairy, fruit & vegetables, seafood, and alcoholic products, particularly wine.
In addition to these food products, we also see a great demand for rice, oil, organic products, and more.
Beauty & Make-up
Hong Kong has a big female population and we see strong demand for beauty and make-up products here. According to Frost & Sullivan, the beauty industry reached HKD 39.9 billion in sales value in 2018 and will reach HKD 56.3 billion by 2023. That’s an increase of almost 30%!
Hong Kong is widely known for having no import or sales taxes, a reason why Chinese shoppers flock here to buy toiletries, perfumes, cosmetics, and skincare products.
Yet, the market is known for being competitive and the top 10 brands account for around 70% of the total market.
Interestingly, this small financial hub is the second-biggest market for Australian beauty products after New Zealand, which speaks for itself. Exports increased by as much as 25.8% in 2017 according to the Australian Trade and Investment Commission and are set to expand further.
Exports have more than doubled in the past five years, which is kind of amazing.
Top eCommerce Platforms
You’ll find plenty of eCommerce platforms available in Hong Kong, including both mainland Chinese and foreign marketplaces. Below I’ve listed the most popular options available among locals at the moment.
Tmall is owned by Alibaba and currently the biggest eCommerce marketplace after Taobao, which is owned by the same company. The website was created for B2C sellers to sell more premium products to Chinese buyers, as Tabao primarily caters to C2C sellers of low-medium range products.
Since its inception in 2014, Tmall has grown to one of the biggest eCommerce websites in the world and it receives hundreds of millions of visitors every month.
By selling on Tmall, you’ll not only get access to the acclaimed and big mainland Chinese market but also to Hong Kong’s.
Tmall is suitable for brands that have established brands, sound finances, and are willing to spend much time and effort to succeed in the Chinese market. Worth mentioning is also that many brands have to work with 3rd party eCommerce agencies, such as Tmall Partners, to penetrate the market.
JD is the second-biggest eCommerce platform in China and the biggest competitor to Tmall. Founded a few years earlier, JD is well-known for its fulfillment capabilities and that it’s widely popular for buyers of electronic products.
That said, you can find many kinds of products here including food and beverages, clothes, furniture, cosmetics, clothes, and more.
It’s comparatively cheap to start selling on JD in general and the entry requirements not as high as Tmall’s. Yet, to start selling here, you also need to set aside tens of thousands of dollars for the first year.
If you want to know more about how you can start selling on JD, just send us an email and we will be back to you in 24 hours!
Taobao is the biggest eCommerce platform in China and was founded by Alibaba. What sets this website apart from marketplaces like Tmall and JD is that it doesn’t have a cross-border eCommerce version, similar to Tmall Global or JD Worldwide.
Taobao is widely used among Chinese sellers that cater to low-medium income earners in second and third-tier cities in China.
As such, you will find many low-priced products here and typically not trendy products, like on Tmall and JD. To sell on Taobao, you have to set up a Chinese company first or work with a Chinese importer.
This is also the case for Tmall Classic (Tmall.com) and JD (JD.com), but not the cross-border versions of the websites. For more information about Taobao, I recommend you to read our separate article.
Trade Fairs for Exporters in Hong Kong
Below I have listed some of the most popular trade fairs available in Hong Kong. If you would like to know more about other trade fairs or give recommendations to other readers, feel free to send us a message or drop a comment below.
HOFEX is Asia’s leading food & hospitality tradeshow that attracts thousands of visitors every year. The next event is scheduled for May 2021 and it’s been around for 34 years, making it one of the oldest trade fairs in the region.
2,800 international brands that come from 70 countries visit the fair. You’ll also find as many as 42,000 visitors.
Examples of products on display are:
- Canned / Processed Food
- Dairy Products
- Dairy Products
- Chilled / Frozen Food
- Fruits / Vegetables
- Ingredients / Essences
- Organic / Health Food
- Soft Drinks
You should definitely visit HOFEX is you want to network, learn more about the market, and promote your brand to local buyers.
HKTDC Food Expo
HKTDC Food Expo is one of the biggest food fairs being held in Hong Kong. It’s been held by the Hong Kong Trade Development Council (HKTDC) at the Hong Kong Convention and Exhibition Centre (HKCEC) in August every year since 1989.
It’s a perfect event for overseas sellers who wish to know more about Hong Kong and mainland China’s food market and to get new connections.
Shipping & Logistics
If you sell in Hong Kong, you generally have two options that we will review today:
- Direct Shipping
- Hong Kong Fulfillment
The direct shipping model is suitable for brands that have just taken on the Hong Kong market and don’t intend to import the products here. Simply put, you use a local courier that helps you to ship your products from your country to Hong Kong.
The drawback of the direct shipping model is that logistics fees can be high as you ship the parcels one by one. Be prepared to pay around USD 10 for a parcel that weighs 100 – 500 grams from the US.
Hong Kong Fulfillment
Hong Kong fulfillment is a perfect option and where you import the products to Hong Kong and let a 3PL company take care of the inbound, storage, pick & pack, and last-mile delivery.
The benefits of this shipping model are that it’s cheaper and customers can also enjoy shorter shipping lead times, as you send the products in bulks to Hong Kong.
There are many reputable companies that offer Hong Kong fulfillment services, including: