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Hong Kong as a Food Trading Hub
Alice Tsang, Economist
Research Department
16 October, 2017
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Overview of Hong Kong’s Economy
3
Major Economic Indicators
4
Characteristics of Hong Kong’s Economy
free trade
low taxation
6th largest trading economy of merchandize
15th largest exporter of commercial services
3,731 regional headquarters and regional offices in Hong Kong representing their parent companies located outsides Hong Kong
Among these companies, US accounted for 21%, Japan (18%), UK (9%) and the mainland (8%)
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A Services-oriented Economy
GDP by Economic Activity in 2015 %
Agriculture, fishing, mining and quarrying 0.1
Manufacturing 1.1
Electricity, gas and water supply, and waste management 1.5
Construction 4.6
Services 92.7
Import/export, wholesale and retail trades 22.7
Accommodation and food services 3.4
Transportation, storage, postal and courier services 6.5
Information and communications 3.5
Financing and insurance 17.6
Real estate, professional and business services 10.9
Public administration, social and personal services 17.5
Ownership of premises 10.6
GDP at basic prices 100.0
Source: HKSAR Census and Statistics Department
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Organic Food Market in Hong Kong
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Food Safety Issues
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Hong Kong Food and Beverages Market
Hong Kong area 1,092 Km² with 7 million+ population <1% agriculture land, >95% of food supply relies on imports
57 million tourists in 2016, of which 43 million (~76%)
were from China ~14,000+ restaurants
(37% Chinese, 56% non-Chinese restaurants, 7% fast food outlets) 1,000+ bars, pubs and other eating
and drinking establishments
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Hong Kong Organic Food Market
Hong Kong organic packaged food market reached USD13 million in 2016 (+5%).
Both organic food and non-organic food are governed by: The Public Health and Municipal Services Ordinance (Cap.132) stipulates that all food for sale in Hong Kong must be fit for human consumption and food labels should not be misleading or falsely described the food.
Any person who carries on food importation or food distribution business is required to register with the Director of Food and Environmental Hygiene (DFEH)
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Organic Certifications in Hong Kong
There are two certification bodies in Hong Kong: Hong Kong Organic Resource Center (HKORC) and Hong Kong Organic Certification Center (HKOCC)
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Other Organic Food Labels
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Sales of Organic Packaged Food by Category
Rice, pasta and noodles, 23%
Spreads, 15%
Others, 14%
Biscuits and snacks bars, 12%
Breakfast cereals, 12%
Savory snacks, 10%
Bread, 8%
Soup, 6%
Source: Euromonitor
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Sales Channel: Physical Stores
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Sales Channel: Online Shopping
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Consumption Pattern on Organic Food
HKORC and Hong Kong Baptism University conducted “Local consumer Behaviour Towards Organic Food 2016”.
70% of interviewees had purchased organic products, 38% of them purchased organic products at least once every two weeks.
67% of interviewees relied on the certification label to differentiate organic food from conventional food
Price and certification label are the major considerations
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Hong Kong as Food Trading Hub
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In 2016, Hong Kong Imports USD25 billion (+9%) of Food and Beverages
China,
23%
USA,
16%
Brazil,
8%
Japan, 5%
Thailand, 4%
Others,
35%
Netherlands, 5%
Australia, 4%
Meat, 26%
Vegetables/
Fruits, 22%
Fish, 15%
Beverages, 13%
Seasoning, 8%
Dairy products,
8%
Cereals, 4%
Coffee/Tea,
3%
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Jan-Aug 2017, Hong Kong Imports USD16 billion (-1%) of Food and Beverages
China 23%
USA 15%
Brazil 8%
Australia 5%
Netherlands 5%
Others 34%
Thailand 5%
Japan 5%
Meat 29%
Veg/Fruits 21%
Seafood 14%
Beverages 13%
Seasoning 8%
Dairy products 7%
Cereals 4%
Coffee/tea 4%
Sugar/honey 2%
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Jan-Aug 2017, Hong Kong Imports USD2.4 billion (+5%) from the U.S.A.
Meat 47%
Veg/fruits 34%
Seasoning 8%
Seafood 4%
Beverages 3%
Dairy products 2%
Sugar/honey 1%
Coffee/tea 1%
Cereals 1%
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Hong Kong re-exports of USD 917 million of USA’s Origin Food and Beverages
Meat 49%
Veg/fruits 41%
Others 7%
Seasoning 5%
China 41%
Taiwan 23%
Vietnam 21%
Macau 7%
Others 8%
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Hong Kong: Distribution Centre for Imported Food Destined for China/Asian Countries
Foreign food imported into China is subject to customs duties (10-35%) and value-added tax (17%)
Hong Kong is a free port and does not levy any customs duties on food imports
Importers can first ship the products to Hong Kong then transship the right quantities to different cities in China according to the local demand
Importers can also consolidate the products destined for China, Hong Kong and other Asian countries in FCL, then transship the other markets according to the sales level
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Success Story
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Hong Kong: as a Food Production Base
Amazing Delights Ltd is a natural health food company specailised in black mission figs, founded in USA in 2007 In 2010, set up branch company and factory in Hong Kong
targeting the Asian market R&D in Hong Kong, leveraging Chinese
festive seasons: moon cake and Chinese pudding Besides retail market, it also cooperates
with catering chains in Hong Kong
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Marketing and Sales Channels
www.awellfood.com