Why Hong Kong Should Be Your Next F&B and Retail Business Destination

You may know Hong Kong for its top three industries: financial services, trading and logistics, and professional services. However, Hong Kong’s residents and visitors also know it for its fourth biggest industry — tourism — which is intimately linked with its food and beverage (F&B) and retail industry.

A bustling metropolis known for its vibrant F&B sector, Hong Kong presents a wealth of opportunities for investors. With a thriving consumer culture, strategic geographical location, and a pro-business environment, it’s no wonder that the city is a magnet for international businesses.

Let’s take a comprehensive overview of why Hong Kong should be your next destination for F&B and retail business ventures. We will delve into the intricacies of the city’s geographical advantages, its thriving tourism and consumer culture, the encouraging business environment, and the innovation and growth opportunities that abound.

Overview of The Hong Kong F&B Industry

According to Statista, In 2023, the revenue in the food market in Hong Kong is projected to reach US$31.11 billion, with an annual growth rate of 5.02% (CAGR 2023-2028). This impressive growth rate, even amidst global challenges, is a testament to the city’s robust economy and the resilience of its F&B sector.

The Strategic Advantage of Hong Kong’s Location

Hong Kong’s geographical location is a strategic advantage for businesses. Situated at the heart of Asia, it serves as a gateway to other lucrative markets in the region. Its excellent connectivity, through a robust network of air, sea, and land routes, ensures seamless logistics and supply chain management for businesses. This strategic location allows businesses to easily import and export goods, thereby reducing operational costs and increasing efficiency.

The Power of Connectivity and Access to Asian Markets

Hong Kong’s proximity to Mainland China offers businesses a unique advantage. This close access to the world’s second-largest economy provides businesses with a vast consumer base, thereby increasing their potential for growth and profitability. The Food market volume (according to Statista) is expected to reach 7,216 million kg by 2028, with volume growth of 3.5% expected in 2024, indicating the efficient movement of goods in the city.

The Strength of International Ties and Cross-Border Business Opportunities

Hong Kong’s strong international ties make it an ideal location for cross-border businesses. The city’s ‘one country, two systems’ framework ensures operational and legal protection for foreign companies. This unique system allows businesses to operate under a legal framework that is familiar to them, while also providing them with access to the vast Chinese market.

Further emphasis should be put on this connection with China, as in comparison to global figures, the most food revenue is generated in China (US$1,492 billion in 2023, according to Statista), indicating the potential of the Hong Kong-China relationship.

The Impact of Tourism on F&B and Retail

Hong Kong’s vibrant tourism sector contributes significantly to the demand for F&B and retail products. Tourists, both local and international, are keen explorers of the city’s diverse culinary scene and shopping districts. This constant influx of tourists ensures a steady demand for F&B and retail products, thereby providing businesses with a reliable consumer base.

The Richness of Hong Kong’s Diverse Consumer Culture

The city’s consumer culture is a melting pot of local and international influences. This diversity creates a market that appreciates a wide range of F&B and retail offerings, providing ample opportunities for businesses to thrive. Whether it’s local delicacies or international brands, businesses can cater to a wide range of consumer preferences, thereby increasing their potential for success.

To emphasise this point, Hong Kong households, regardless of economic cycles, consistently allocate around 10-15% of their income to eating out. This unwavering spending habit helps to protect the F&B sector from economic fluctuations, which can be harmful to other sectors.

The Advantage of Pro-Business Policies in Hong Kong

Hong Kong’s government policies are designed to foster business growth. The city boasts low tax rates and an easy business setup process, making it an attractive destination for investors. These policies not only reduce the financial burden on businesses but also simplify the process of setting up and operating a business in the city.

As a result, Hong Kong was ranked by the World Bank as the third easiest place in the world to do business, which is a testament to its strong economy, efficient government, and pro-business environment.

The Strength of Infrastructure and Skilled Workforce

Hong Kong’s robust infrastructure supports businesses in establishing and expanding their operations. The city also boasts a highly skilled and diverse workforce, providing businesses with the human resources necessary for success. Crucially, the number of licensed restaurants in Hong Kong has grown by 3.9% since 2020, slightly faster than the growth rate from 2017 to 2019, indicating the city’s supportive environment for F&B businesses.

Boosting Morale and Consumption

The Happy Hong Kong campaign, launched by the Hong Kong government, aims to boost public morale and consumption. The campaign features a series of thrilling events for the public to partake in, such as carnivals and discounted movie tickets. These events not only stimulate the local economy but also create a vibrant atmosphere that attracts tourists and locals alike. Here are a few of the events on offer:

The Harbour Chill Carnival

The Harbour Chill Carnival is a land and sea festival in Wan Chai with live music, performing arts, and A Symphony of Lights. It showcases Hong Kong’s culture and ability to host large events.

The Happy Hong Kong Bazaar @ Science Park

The Happy Hong Kong Bazaar at the Science Park showcases innovative technological products and culinary experiences. The bazaar features locally-made tech products, food, supplements, and more, demonstrating the city’s commitment to promoting local businesses and innovation.

The A and F Carnivals

The A and F Carnivals, held by the Agriculture, Fisheries, and Conservation Department, promote local fisheries and agricultural products. These carnivals showcase fresh produce harvested by local farmers and fishermen, further highlighting the city’s commitment to supporting local businesses and sustainable practices.

Opportunities for Innovation in F&B and Retail Sectors

Hong Kong’s tech-savvy population and digital infrastructure offer numerous opportunities for innovation within the F&B and retail sectors. Businesses can leverage these opportunities to introduce new concepts, enhance customer experiences, and drive growth.

Most notably, by 2023, Statista projects that 11.8% of total revenue in the Food market will be generated through online sales, indicating the growing trend of online food ordering and the digital transformation of the F&B industry.

Where to Next for Finding the Right F&B Opportunities in Hong Kong

Hong Kong’s strategic location, robust business environment, and vibrant consumer culture make it an ideal destination for F&B and retail ventures. The city’s thriving tourism sector and tech-savvy population offer a wealth of opportunities for businesses looking to innovate and grow.

Whether you’re a startup looking to make your mark or an established business aiming to expand your footprint, Hong Kong offers a fertile ground for your F&B and retail venture. With its pro-business policies, world-class infrastructure, and diverse consumer culture, the city provides all the ingredients necessary for your business to thrive.

Don’t miss out on the opportunity to tap into this vibrant market. Our team of experts is ready to guide you through every step of the process, from understanding the market dynamics to navigating the business setup process. With InCorp, your business is set for success in Hong Kong. Reach out to us now to start your exciting journey in the world of F&B and retail in Hong Kong.