Date
28 May 2017
China's consumer market is huge but Hong Kong companies often find it hard to penetrate it because they don’t understand local shopping habits well enough. Photo: Internet
China's consumer market is huge but Hong Kong companies often find it hard to penetrate it because they don’t understand local shopping habits well enough. Photo: Internet

Why Hong Kong manufacturers are not gaining traction in China

Hong Kong-funded factories across the border have been trying to open up the mainland market since the 2008 global financial crisis, partly because overseas demand has not quite fully recovered.

China’s policy shift to encourage domestic consumption is also a factor.

The problem is Hong Kong manufacturers have not had much luck with the China market.

Compared with their local rivals, Hong Kong manufacturers are much less willing to invest in branding and marketing, according to a report by the Federation of Hong Kong Industries.

Picking the wrong distribution platform is another challenge.

Initially, some Hong Kong manufacturers spent quite a bit of resources building up their retail presence only to face a drastic change in consumption patterns as e-commerce suddenly became the shopping vehicle of choice.

Failing to set up e-shops early enough, these manufacturers are finding it hard and expensive to catch up.

To boost traffic, an e-commerce site in China needs extensive marketing during the startup phase.

It often takes at least six months before there is any chance to see some notable results.

Many Hong Kong manufacturers simply do not have the time or money.

At the same time, the mainland is quite different from Hong Kong and other foreign markets.

Local manufacturers often don’t have enough marketing talent who understands the preferences and buying habits of Chinese shoppers well enough to succeed in e-commerce.

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RA

EJ Insight writer

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