Consumer Products to Hong Kong
Trends and opportunities
With virtually no local manufacturing, Hong Kong’s consumer product needs
are overwhelmingly met by imports. Hong Kong has a wealthy local population
of 7.4 million that is keen to try new products and has high consumption
power. With the city’s huge number of consumers from Mainland China, Hong
Kong has become a large, high-value and expanding market for Australian
consumer products, including beauty and health, fashion, clothing and
Hong Kong is the leading regional international shopping hub for North
Asia. The city offers an attractive retail environment for local customers
and overseas visitors due to its zero sales tax and broad diversity of
Hong Kong is also a popular travel destination, with more than 58.4 million
visitors in 2017. This included over 44.4 million Mainland Chinese, who are
significant contributors to the region’s retail market and frequently visit
the city to buy cosmetics, clothing, jewellery, watches, handbags and
electronics. (Source: Tourism Commission,
Tourism Performance 2017)
Hong Kong remains a glamorous shop window for showcasing international
brands. It is a significant market and an excellent testing ground for
international products entering the region. The city offers an ideal
platform for many Australian companies to establish a reputation amongst
enthusiastic mainland buyers, building brand equity before tackling the
mainland’s complex and costly regulations.
Addition to this, Hong Kong is positioned as a strategic trading centre and
sourcing hub for international consumer products in the region. The city
has low trade barriers and is accessible to a variety of international
Hong Kong is a small city and it is still convenient to visit retail shops
and nearby shopping centres. The large number of tourists from China and
the region will continue to support the existence and demand for physical
stores. Additionally, shoppers in Hong Kong are less keen to go online to
buy what they want.
To help Australian exporters better understand how they can enter the Hong Kong market, please see the Hong Kong Beauty and Health Retailers Guide.
Hong Kong has traditionally lagged behind other Asian markets when it comes
to e-commerce and online shopping. However, the retail landscape has
changed in Hong Kong in the last couple of years. E-commerce is
consistently growing. Despite the majority of retail sales are still
happening in stores, internet retail in Hong Kong maintained a healthy
growth in 2017 as sales rose by 10% to HK$15.1 billion (Source: Euromonitor –
Internet Retailing in Hong Kong
Consumer shopping habits have also changed. Today, young customers,
especially the post-90s and post-00 generations (so-called Millennials and
Generation Z), are the major drivers in the retail market. They favor the
convenience, selection, research and price-comparing ability of buying
online. Online research becomes a part of their shopping experience. While
Hong Kong consumers still regularly visit brick-and-mortar stores, they
will continue to research and shop across all channels, both online and
In today’s new digital era, there is a need for O2O (online to offline), as
shopping malls compete for visitors by providing customers with more
improved and interactive shopping experiences. Both traditional and
e-commerce players have actively embraced digital transformation and O2O
concepts. The latest digital consumer trends are:
government support for the development of e-commerce
meeting the needs of customers
enhancing customers experience
using technology to facilitate retail and improve operational
The beauty market in Hong Kong is very strong. Hong Kong is the second
largest export market for Australia’s beauty products after New Zealand,
representing 14 per cent of the total exports. Australian cosmetics exports
to Hong Kong grew by 25.8% percent in 2017 to a value of A$109 million.
Exports are growing and have more than doubled over the last 5 consecutive
years. (Source: Australian Bureau of Statistics on Global Trade Atlas)
Australian cosmetic and skin care products have an international reputation
for being safe, environmentally friendly and of high quality. Australia is
also recognized as a quality, reliable source of cosmetics, skin care and
health products, particularly in the natural and organic skincare
The region’s discerning consumers are becoming more aware of the impact of
chemical ingredients and there is demand for natural, organic and
safe-to-use skin care products amongst local customers and overseas
There is untapped demand in the natural and organic products segment and
great potential in the following areas:
baby and child-specific products
- natural colour cosmetics and mineral make up
- natural or organic functional hair care products
men’s grooming products.
While Australian skincare products are perceived as premium quality, the
market is extremely competitive. In comparison to similar products or major
brand names from other countries, pricing and packaging of Australian
brands are often considered weak points.
Fashion and clothing products
As a fashion capital, Hong Kong is a place for original fashion trends and
is also a trendsetter in its own right. Hong Kong is the top 4 export
market for Australia’s apparel and clothing products, with the total
export of apparel and clothing to Hong Kong reaching A$4.4 million in
2017 and a notable growth of 45% (Source: Australian Bureau of
Statistics on Global Trade Atlas)
In a market dominated by international brands, it remains very competitive.
Local consumers are increasingly concerned with brand image and fashion
trends, especially among the 20 to 30 year old demographic which
preferences fashion over function. However with the recent economic
slowdown, consumption patterns are shifting from premium brands to fast
fashion and standard brands. Consumers are more receptive to international
fashion labels, especially fast fashion brands which are considered trendy
Outside the fashion segment, Hong Kong status and style conscious consumers
continue to demand smart casual clothing, active wear and sportswear.
Australian fashion designers have a growing reputation worldwide for
quality and innovative designs. Australian lingerie, ready-to-wear, evening
wear, menswear, streetwear and accessories are becoming more established
internationally. Australian swimwear and surf wear are often regarded as
world market leaders with many well-known brands.
Awareness of Australian fashion is relatively limited in Hong Kong.
However, the presence of Australian fashion labels and designers in the
city continues to grow. Some well-known Australian high-end fashion labels
such as Sass & Bide, Camila Marc, Ellery and Dion Lee are already
represented by fashion outlets in Hong Kong. Some active wear and
childrenswear brands such as 2XU, Billabong, Quicksilver, Roxy and Seed
Heritage have also opened their retail stores in Hong Kong.
Thanks to the opposing seasonal patterns between Australia and Hong Kong,
collections that are more trans-seasonal than season-specific can help to
increase sales in the Hong Kong market. Additionally, the seasonal
half-year lag can be a good opportunity for Australia to analyse and
capitalise on trends that have worked commercially in the northern
Hong Kong fashion merchandising buyers and consumers in the high-end market
are very brand conscious and require unique and high-quality design with
attention to detail. For the middle to casual wear market consumers
generally opt for items that offer comfort, functionality and value for
Licensing can also be an option in certain markets if suitable partners can
be identified. In addition, private label design could be another
opportunity in Hong Kong, given local companies’ strong ties to the fashion
industry in mainland China.
Retail Technology Products
With the growing digital consumer trend in Hong Kong, retail technology
becomes a fast growing and emerging field in the retail space. Currently,
disruptive technologies are changing the retail industry in the way
retailers and consumers interact, the way consumers’ shopping and brand
experience, and subsequently consumers’ expectations.
The combination of disruptive technologies and retail results in what is
called smart retail: utilising smart technology and data
analytics to give the consumer a greater, faster, safer and
all-encompassing experience when shopping.
Hong Kong is an ideal platform for retail tech companies which are looking
to grow their business and expand in Asia. As the leading shopping paradise
in Asia, and as Hong Kong and Chinese consumers become more tech-savvy with
higher expectations for customer service, many Hong Kong retailers and
shopping malls are looking to explore different ways to enhance customer
To boost in-store foot traffic and sales in physical stores, some
traditional retailers have also created an innovative in-store shopping
experience with the use of digital tools and experiential elements. There
are four key areas of disruptive technology identified that we believe will
have the biggest impact on retail:
Artificial Intelligence (AI)
- the code and algorithms that give machines the ability to mimic human
or cognitive functions. It has been used to identify consumer needs and
inform retailers on ways to tailor the shopping experience to
Augmented Reality & Virtual Reality (AR & VR)
- adopted digital technologies and experiential elements to drive
in-store and offline traffic and to create interactive shopping and
brand experiences such as AI Chatbots.
- used to analyse data to generate actionable business insights and
strategy for inventory management, pricing, marketing and merchandizing
and forecast consumer behaviours and trends.
Internet of Things (IoT)
- integrating new devices and channels into the shopping experience
such as sensors, surveillance video data, mobile apps and websites to
understand consumer behaviour.
Competition is fierce as the Hong Kong market is highly fragmented and
saturated with products from a wide array of supplier countries. The
cosmetics and skincare market in Hong Kong is still dominated by
international and premium brands from France, Japan, Switzerland and the
United States. New and niche brands built on ‘natural’ or plant-based
ingredients are becoming more popular.
In recent years, the pop culture wave of Korean fashion has intensified the
competition in the fashion market. Fast fashion brands from Korea which are
trendy yet affordable are dominating the market.
Tariffs, regulations and customs
There are no tariffs in Hong Kong on imported goods including cosmetics,
skin care, and fashion and clothing products.
Registration and local labelling are not required on general beauty,
cosmetic or cosmeceutical products, unless there are medical or therapeutic
claims on the products.
Product labelling can be in English or English-Chinese (bilingual).
Traditional Chinese is used in Hong Kong while simplified Chinese is the
norm in Mainland China. Traditional Chinese is always recommended in the
Hong Kong market. In many cases, it is acceptable to leave the original
English label unchanged. An expiry date (though not mandatory) is highly
recommended to be printed on the beauty products and/or outer box.
There are also no regulatory requirements for clothing labels. Labels
generally contain three pieces of information pertaining to the garment:
- fiber content
country of origin
details of the manufacturer, importer or dealer
Garments usually include labels that disclose care instructions for the
Marketing your products and services
The most effective way to enter the market is to work with local
distributors or agents who normally contribute not only to the sales and
marketing, but most importantly to brand-building activities and
sustainable development of the brand in the market.
Austrade has launched a
to provide Australian beauty companies with first-hand perspectives from
experts in the market. This video provides advice on the market entry and
marketing tactics to be used in Hong Kong and Mainland China.
For fashion and clothing products, trade fairs and fashion shows remain
commonplace for buyers and suppliers. Buying season in Hong Kong is January
to March for a September (fall/winter) delivery and July to October for a
February (spring/summer) delivery.
Fashion buyers travel to Europe, America and Australia to attend
international fashion shows to explore the latest trends and designer
Mercedes-Benz Fashion Week Australia
Melbourne Fashion Festival
are major Australian fashion shows selected by buyers from Hong Kong.
Australian fashion houses and designers can also seek to distribute their
products through fashion trade events in Hong Kong.
Brand building and PR
Hong Kong is a highly media-influenced market. While traditional television
and print advertising are key marketing tools, social media platforms have
become extremely popular in Hong Kong.
Consumers can freely access to Facebook, Google, Instagram, Yahoo! and
YouTube in Hong Kong. Facebook emerged as the most popular social platform
for Hong Kong consumers.
As social media is increasingly popular, using influencers to promote new
products is very common and effective in Hong Kong. Some brands use online
bloggers, including celebrities and KOLs, who will typically blog about a
product and their personal experience of using it. Consumers usually search
online for immediate purchasing advice from friends, to post product
reviews and to seek product knowledge or advice from influencers.
Australian brands are also advised to appoint a public relations company in
Hong Kong to build media profile and coverage for brand-building and
The pricing structure for exports to the Hong Kong market is different from
the wholesale pricing structure in Australia due to the high overhead costs
and margins required at each level (importer, distributor and retailer).
Hong Kong commercial real estate is amongst the most expensive in the
world. To cover high rental cost and retail margins for beauty and skincare
products, the retail price is normally four to six times the free on board
A typical distribution channel to consumers involves importers,
distributors and finally retailers. However, given the limited size of Hong
Kong in terms of both population and geography, importers may also play the
role of wholesaler/distributor. Retailers may also import products directly
from suppliers, bypassing the need for intermediaries.
In cases where importers pay the equivalent of the Australian ‘wholesale’
price for the goods, the retail price may be double the Australian retail
price, which is not generally competitive in this market.
Australian companies are advised to work with agents in Hong Kong, who will
work on a 30 to 50 per cent margin and with significantly more for the
retailer. As a general rule, imported Australian products are usually sold
at nine to ten times the ex-factory price. Buyers often make purchase
decisions by comparing pricing to other similar brands/products already
sold in the market.
Australian suppliers should take the above structure into consideration
when shaping their price strategy for the competitive Hong Kong market.
They should remain flexible and negotiable on the pricing structure in
order to increase their price competitiveness.
The major retail distribution channels for beauty products include:
- Department stores which normally stock international, high-end and
Beauty specialist retailers (for all price ranges) that are still selling
parallel-imported brand name products, but are progressively seeking new
product lines to reduce their parallel imports
Personal care chain stores (combined with pharmacies) which are mainly
for middle and mass-market products. There are over 400 of these stores and
typically demand high listing fees and a 35 to 50 per cent retail margin
Multi-brand stores that are for middle to high-end ranges. They may also
play the role of importers and distributors to import products directly
Supermarket chains stocking low-end/mass products and have a tendency
towards private labels
Concept shops that are standalone brand stores offering experiential
aspects to consumer (e.g. Australian skincare brands Aesop, Jurlique and
B2C e-commerce platforms and the development of O2O and cross border
e-commerce platforms for imported goods
To help more Australian companies understand the distribution channels in
the cosmetic sector, Austrade has produced a list of
Hong Kong health and beauty retail stores
Fashion and clothing products
Specialty apparel retailers remain the major distribution channel. Medium
to high-priced fashion labels are usually sold in renowned department
stores. Department stores predominantly stock established overseas brands
that have a successful track record in Hong Kong.
Some well-known high-end fashion labels are represented by multi-brand
stores in Hong Kong:
Online and catalogue retailing is becoming more popular due to high
commercial rental costs.
Importers and retailers in Hong Kong will often seek exclusivity to secure
brand/product uniqueness and avoid price competition, given the relatively
small market size.
Links and industry contacts
The Cosmetic & Perfumery Association of Hong Kong
Clothing Industry Training Authority (CITA)
Hong Kong Apparel Society Limited
Hong Kong Fashion Designers Association
Hong Kong Intimate Apparel Industries’ Association (HKIAIA)
Hong Kong Research Institute of Textiles and Apparel (HKRITA)
Government, business and trade
Bilingual Laws Information Service
Census and Statistics Department
Hong Kong Customs
Hong Kong Department of Health
Hong Kong SAR Government
Hong Kong Trade Development Council
Intellectual Property Department
Invest Hong Kong
The Australian Chamber of Commerce in Hong Kong
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
- promote international education
- strengthen Australia's tourism industry
- seek consular and passport services.
Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
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