Economy

Don't Overlook this Huge Export Market

Canadian sales to Hong Kong are soaring. Here's how to get in on the action

Written by Nora Underwood

Ask any of the nearly 300,000 Canadian citizens living in Hong Kong: it’s a great place to do business. The World Bank’s International Finance Corporation ranks Hong Kong second in the world for ease of doing business. And if there’s one thing they like to do more than business, it’s buy stuff. The former British enclave’s stores are jammed—with local residents, yes, but also millions of shoppers who pour in from the mainland every month.

So, it’s no surprise that in the space of one year, from 2012 to 2013, Canadian exports to Hong Kong increased 99%, reaching $4.9 billion—an historic high in the trade relationship between the two jurisdictions. Hong Kong is now Canada’s sixth-largest export market, according to Gloria Lo, director of the Hong Kong Economic and Trade Office. Last year, 82% of the total Canadian exports to Hong Kong came from Ontario, followed by Quebec, British Columbia and Alberta.

“The main attraction is we don’t impose any tariff for most imported goods,” explains Lo. Even the duty on wine was abolished a few years ago. Duty remains on only a few things, including liquor with a high alcohol content, tobacco and oil.

Lo sees real potential for Canadian food, medical devices, medicine and health products in Hong Kong. “We don’t produce most of our drugs,” she adds. “There’s pretty much lots of potential there.”

Hong Kong is the third-largest export market for Canadian beef and the fourth-largest for seafood. Among the country’s list of other exports are unwrought gold, fur skins, ginseng, aircraft and electrical machinery. Lo sees real potential for Canadian food, medical devices, medicine and health products in Hong Kong. “We don’t produce most of our drugs,” she adds. “There’s pretty much lots of potential there.”

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Lo says another feature is that Canadian small and medium business can re-export through Hong Kong to other places, including mainland China and other parts of Asia. “Port facilities are modern and efficient,” she adds. “You can do it through Hong Kong exporters who know other markets well, and make use of their expertise and knowledge.”

Selling into Hong Kong is relatively easy, and the Canadian Consulate General there does yeoman’s duty helping Canadians set up sales contacts, with regular trade missions and “virtual trade missions,” which are conducting through teleconferencing. Hong Kong has a well-established legal system based on British law, much as Canada’s statutes are. Its courts are reliable and function in English as well as Chinese. Business and public administration has thrown off a notoriety for corruption in past years, and today is unblemished by seedy practices of the past. In

In addition the territory is a marvel of intellectual-property protection and adherence to international standardization. Indeed, the Hong Kong government is fostering a whole industry based on testing and certification. The sector employs 12,610 people who serve the needs of regional manufacturers trying to gain credibility but also overseas buyers on the lookout for substandard purchases.

If you plan to sell to Hong Kong, remember this:

  • Do your homework—the Trade Commissioner Service can help you—and prepare your sales brochures and Web pages in Chinese (traditional written Chinese, not the mainland’s simplified-character system).
  • Have business cards prepared in English and traditional Chinese and expect to give them grasping them with both hands. Be sure to read your counter-party’s business card before putting it away. Set an agenda in both languages and always address the senior person in party you’re selling to.
  • Don’t expect an overnight sale—despite Hong Kong’s go-go reputation the more sophisticated the product or service your want to export the more time it will take to establish a business relationship.
  • If you set up a sales office there, avoid the stratospheric rents in Central district and take a small space in Kowloon or the New Territories. Better still, use the services of a local agent who can hold your inventory locally, at their property.

Have you had success selling to Hong Kong? What advice can you share with your fellow entrepreneurs? Share your tips in the comments below.

    Originally appeared on PROFITguide.com