(Last updated: 6 Jan 2012)
Trends and opportunities
With a population of almost 7.1 million and a significant tourism industry (a total of 36 million visitors in 2010), Hong Kong is a substantial market for all kinds of food products.
Hong Kong can be characterised as a food import-dependant market, there is minimal domestic agricultural production and a small food processing industry. Hong Kong is also a trading hub for re-exports into mainland China, Macau and other neighbouring markets in Asia.
While there is increasing demand for various kinds of convenient food items, consumers are becoming more health conscious about what they eat (eg. healthy diet, concerns over GMO, interest in organic food). As a result, we are seeing an increasing trend towards healthy, functional and organic foods which is reflected in the introduction of more of these products in the retail channels.
The food retailing and catering market has been changing in recent years as a result of the changing lifestyle of the local population. Supermarkets, fast food stores and theme restaurants continue to grow and have become an integral part of shopping and dining out habits.
Major supermarket chains are being transformed into one-stop-shop ‘superstore’ outlets enabling business growth through new set-ups of wet market corners, in-store bakery, take-away food services, specialty selections and linked shopping facilities such as personal care stores, wine cellars, banking facilities, books and photo processing.
There has been a trend of retail expansion in the upper-end sector. Oliver’s Delicatessen (part of the Dairy Farm group), Great Food Hall (part of the A.S Watson group) and Citysuper are the three key players in the market who effectively cater to the needs of the upper-end market segments in Hong Kong. ThreeSixty, part of the Dairy Farm group caters to health conscious consumers as a one stop-shop for organic, natural and wholesome foods.
In the absence of meat safety problems such as 'foot and mouth' or 'mad cow' disease, Australian is perceived as one of the top supplying countries for beef, lamb, pork and poultry. Significantly increased demand for various meats and meat products from Australia has been witnessed in the last five years.
Australia and New Zealand are regarded as the two key supplying countries for all types of dairy products in the Hong Kong market. Australia has the leading market share position in fresh/UHT milk, cheese, yoghurt and butter categories.
Fruit and vegetables
Per capita consumption of fresh fruit and vegetables in Hong Kong is thought to be among the highest in the world. However, the openness of the Hong Kong economy contributes to the competitive nature of the fresh produce trade.
Fruit demand is high for oranges, apples and grapes. Pears, mandarins, bananas, mangoes, papaya, melons and plums are other major imported lines.
Vegetables imported from Australia into Hong Kong mainly include: potatoes, onions, tomato, lettuce, celery, broccoli, carrots, Chinese cabbage, cucumbers, leafy and root vegetables. In recent years, pre-packed salad mix is also high in demand.
Based on current market developments, consolidated Australian fruit and vegetable export efforts will lead to greater competitiveness for Australian exporters in the international market places in terms of bargaining power, pricing, quantity and quality consistency, credit management, marketing funding and brand building.
Hong Kong has a very high per capita consumption of seafood. Substantial demand exists for all kinds of seafood, ranging from the low price fin fish (eg. croaker and carp) to the more expensive gourmet delicacies (eg. abalone, lobster and shark fins).
The Hong Kong Chinese population has a strong preference for fresh seafood, resulting in an unusually high demand for live and chilled products. It is estimated that 75 per cent of local requirements for fish and fish products are purchased in live or chilled form. However, as the cost of live seafood increases, industry sources believe consumers will purchase increasing amount of frozen seafood.
Australia is a major source of supply for most gourmet shellfish sold in Hong Kong. The main items imported from Australia include: live, frozen, and canned abalone, frozen scallops, live lobsters, frozen prawns, coral trout, oysters, mussels, king crab, selected fin fish, etc for Western catering.
Hong Kong is a typical import-dependent market for all wines. Traditionally, the expatriate population and a significant number of inbound tourists make up the main consumer segments for wine consumption in Hong Kong. Now, an increasing number of affluent and middle-class local Chinese consumers are considering wine appreciation as part of a healthy and trendy lifestyle, resulting in a steady expansion of the Hong Kong wine market size.
Australian wines have been making healthy inroads in Hong Kong with the wine quality and wine region identity gaining increasing recognition amongst the trade and consumers. The growth of market share for Australian wines has been very much at the expense of French wines in the past decade. Most of the local import agents carry a wide range of wines from Australia. Hong Kong alone is currently the 14th largest market for Australian wine exports to the world, and is a springboard for Australian wines to greater China.
Australia has been the second largest supplier of grape wines to Hong Kong over the past 14 years. Australia was our third largest source of wine imports into Hong Kong in 2010. The total value of imports was HK$418,327,052, representing a year-on-year growth of 26.7 per cent. For the first half of 2011, wine imports amounted to $273,909,914, representing a year-on-year growth of 51.2 per cent.
The Hong Kong Government abolished its wine import tariff in February 2008 with the aim to make Hong Kong a regional wine trading hub in Asia. While competition among the wine trade instantly intensified, demand for higher quality wines, better wine trade services, more wine auctions, wider range of wine education/training/media and storage options has increased significantly year on year.
Currently, the Hong Kong wine market is well-supplied by an existing and increasing number of new-to-market suppliers. Instead of continuously relying on 'value-for-money, quality wine for everyday consumption', it is now time for the Australian wine export industry to position itself upward by brand building, highlighting the Australian wine regional identity, the story behind the labels and to reveal the Australian landmark wines to Asia’s wine market influencers and the regional hub market of Hong Kong.
The signing of a wine MOU between the Australian and Hong Kong Governments in April 2009 has further enhanced the wine trade and related services promotions between the two places. Australia is believed to have a much bigger role to play in working together with counterparts in Hong Kong to further develop Hong Kong as a regional wine trading hub in Asia with Australian expertise and partnership.
From the beginning of 2011, Wine Australia has established its regional office in Hong Kong to cover greater China and major markets in Asia. Austrade network and Wine Australia offices in the region are working closely to promote the exports of Australian wines, services and professional training to key sectors, and to ensure sustainable growth of Australian wine market share in Asia.
Australia has strong market share in packed rice, dried fruit, edible oils, healthy and functional food and drink sectors.
Being one of the freest markets in the world, there is minimal trade barriers for imports. The market is therefore extremely competitive, which means quality products are often competing on price.
The image of Australia’s ‘clean and green’ production environment and high food safety standards helps the promotion of Australian food exports to Hong Kong. Organic productions help sustain and develop the market share for Australian food products in markets like Hong Kong.
Australia is currently the fourth largest food supplying country to Hong Kong after China, Thailand and USA.