HONG KONG BUYER

Consumer Profile

The population of Hong Kong enjoys the world’s longest life expectancy, with men
living on average 81.3 years and women 87.3 years. However, Hong Kong also has one
of the world's lowest birth rates (0.24% in 2020, with the median age of the population
being 46.5 years (CIA). 21.6% of the population is below 25 years of age, 42.6% is
between 25 and 54, 17.2% is between 55-64 and 18.5 is 65 or older. Additionally, there
are 86 male every 100 female. The population is mainly ethnically Chinese (93.6%), and
non-Chinese ethnic groups representing less than 7% of the population. Of these
minorities, Filipinos are the biggest group (2.5%), followed by Indonesians (2.1%).
According to the Census and Statistics Department of Hong Kong, households tend to be
small with 20.1% of households made up of one person, 28.5% of two people, and 22.9%
of three people. On the other hand, households with four people only represent 17.8% of
all households, while those with 5 people represent 7.4%, and houses with over 6 people
account for a mere 3.2%. While Hong Kong has the third highest literacy rate in the
world, only 30.8% of women and 35.1% men have post-secondary education. Public
administration, social and personal services accounts for 30.3% of the workforce. They
are followed by financing, insurance, and real estate (12.1%); professional and business
services (10%); construction (8.3%); retail (7.5%); and accommodation and food services
(6.5%).
Purchasing Power

GDP per capita in Hong Kong has been rising in recent years, reaching USD 62,375
(PPP) in 2019 (World Bank). The median monthly salary of employed persons is HKD
17,500 as of the second quarter of 2020 (Census and Statistics Department). Hong
Kong’s disparity between rich and poor is currently the greatest it has been in 45 years,
with a Gini coefficient of 0.539 in 2017 (Census and Statistics Department, latest data
available). Lately, soaring property prices have pushed up rents and had a knock-on
effect as businesses raise prices on goods and services, which made a big part of the
population seek extra work. As the property market squeezes the city’s most vulnerable
people, risks fuelling social tensions arise. Additionally, the wealthiest 10% of
households earn nearly 44 times more than the poorest 10%. Women under the age of 20
earn slightly more than men of the same age group. However, women between 25-34
years earn 20% less on average than their male counterparts, and women between 45-54
earn 35% less than men do. Overall women are paid around 18% less than men. The
gender pay gap widens with age because fewer women take up senior positions as more
women leave the job market earlier than their male counterparts to take care of family.
Ethnic minorities, particularly Pakistanis, have the lowest standard of living, given that
they have the highest poverty rate in Hong Kong.
Consumer Behaviour

Hong Kong has the world’s most connected consumers. As such, e-commerce has been
growing exponentially, and further growth is expected in the coming years. Not only does
technology change how products are being sold, but also influencing and changing how
products are researched, manufactured and marketed - affecting how consumers in Hong
 Kong shop and chose what they are buying. Additionally, e-commerce represents a
notable facet of the overall consumer experience, especially among Millennials.
Empowered by rising disposable incomes, consumers have become increasingly savvy
and expect higher quality and first-rate customer service. Purchases are usually
determined by the price, quality and technical specifications of the product, as well as
after-sales service. Consumers look for high-quality products and competitive prices.
Hong Kong consumers tend to prefer foreign products to domestic ones, given that they
are highly influenced by Western trends. The Hong Kong market is particularly
favourable to brands that are endorsed by Western celebrities, as well as Asian fashion
icons. Consumers tend to be price sensitive but brand conscious, and they are particularly
fond of luxury brands. In Hong Kong, face and social status are important, so brands that
signal a high social and economic status are extremely popular, and consumers are happy
to pay a premium. However, the retail and consumer products sectors are changing.
Whereas previously flagship luxury stores dominated the shopping landscape in Hong
Kong, fast fashion and lifestyle stores are increasingly prevalent. Additionally, the
economic slowdown in China is rippling through the region causing a change in
consumers’ choices and expectations, emphasising value and functionality of products.
The purchasing power of millennial shoppers is increasing, shifting demand to new
products that promote life experiences and healthy lifestyles, as well as shopping
experiences that are more convenient. Rising health awareness is increasingly informing
consumers’ shopping habits, particularly among the younger generations, so there is an
increased demand for healthy and organic food. Hong Kong receives huge numbers of
visitors from China every day, many of whom spend large amounts of money on the
Island's many luxury stores. However, lately, the number of mainland tourists that go to
Hong Kong to shop has been decreasing. For that reason, Hong Kong loosened its ‘one-
trip-per-week’ cap on individual visits by Chinese tourists, invested on new tourist
attractions, with the intention of drawing more visitors, and subsequently boost retail
sales.
Google is the search engine of choice in HK, whereas Mainlanders are on Baidu and
Qihoo.  In Hong Kong, Facebook, Instagram, WhatsApp and YouTube outrank WeChat,
Weibo and Youku by a country mile.   
In many ways, Hong Kong consumers have greater similarities with Americans than
Mainlanders, so it’s surprising how many businesses still lump them into one generic
Greater China strategy

With an overall economic freedom score of 89.1, Hong Kong remains one of the freest
economies in the world, placing 2nd in 2020 behind Singapore. The US-based Heritage
Foundation explains that countries with high economic freedom have business-friendly
tax codes and governments that encourage innovation and entrepreneurship. The
liberty granted in the business sector of Hong Kong creates more opportunities for
companies to develop in the country. Additionally, foreign brands have a high chance of
penetrating the local market.

Heritage Foundation studies also show that people of top-ranking countries live longer,
have better health, are more educated, and have better ecological protectors.
Considering these attributes for Hong Kongese consumers would indicate which
businesses have the potential to flourish in this market. To set up shop in Hong Kong,
marketers would have to identify what these economically free people need.

Hong Kongese Consumers

There are 7.47 million consumers in Hong Kong. Of this total population by mid-
2020, 11.5% are Millennials or belong to the 20-29 age group, while 26.2% are Silver
consumers aged 60 and older. Nielsen research suggests that marketing opportunities
in Hong Kong lie in these two groups as they appear to be the most active among local
consumers. To properly market to these specific demographics, brands would need to
identify which products and services are most popular among their members. Here is a
look into some Hong Kongese consumer habits to help determine where their priorities
lie:
Dining out
According to Nielsen, before 2020’s global pandemic, Hong Kongese ate outside of
their homes at least 3.70 times per week. This figure is the highest in the world and 2.6
times higher than the Asian average. Hong Kongese are also health-conscious when it
comes to their food consumption. 8 out of 10 consumers between the ages of 50 and 64
cite health and fitness as key priorities in their lifestyle. These consumers purchase
more organic breakfast cereal products, sugar-free juices, and nutritional supplements.
This behavior suggests that food businesses, especially those that promote healthy
diets, could potentially have opportunities to flourish in Hong Kong.

Video streaming
We Are Social and Hootsuite reported that Hong Kong consumers spend more than 40
hours of weekly Internet usage. At least 27% of internet users watch video-on-demand
(VOD) programming. The South China Morning Post previously reported that US-based
Netflix, mainland China’s LeEco, TVB’s MY Super TV, and PCCW’s ViuTV are among
the major VOD providers in Hong Kong as of 2017. Upon consideration of these
statistics, brands could potentially reach 27% of the Hong Kongese consumer market
through product placement on video streaming platforms.
E-commerce
We Are Social and Hootsuite data states that 7 out of 10 Hong Kong consumers shop
online. It is especially apparent among Millennials between the ages of 20 and 29. Due
to the COVID-19 pandemic, e-commerce spending rose by 13.4% in 2020. Relatedly,
around 36% of Hong Kongese had practiced purchasing groceries online to avoid huge
crowds and observe social distancing. This statistic may be owed to the fact that Hong
Kongese consumers prefer global brands; a study has shown that only 7% of locals are
inclined to purchase homegrown brands.

Additionally, credit cards are widely accessible to Hong Kong consumers. According to
the official press release of the Hong Kong Monetary authority, 19.52 million credit
cards were in circulation by the end of the second quarter of 2020, with a total number
of 203.71 million transactions. As the number of credit cards reaches over 250% of the
total population of Hong Kong, it is apparent that the country has an active consumer
market.

Marketing in Hong Kong

As previously mentioned, Hong Kong consumers favor global brands. The global
advertising agency network McCann Worldgroup conducted a study in 2018 entitled
“Truth about Global Brands 2: Decoding the Shifting Dynamics for Brands in Hong Kong
and Southern China.” Survey results have shown that 64% of people in China trusted
local brands instead of global brands. Meanwhile, only 7% of Hong Kong consumers
trust local brands, indicating their preference for foreign brands.

The study has shown that consumers prefer foreign brands as they offer more options
and have better quality. Hong Kongese are particularly interested in products that are
on par with Japanese and Korean standard qualities. Thus, based on initial perception,
global brands already have an edge in marketing to Hong Kong consumers.

Successful Brands
ouGov BrandIndex regularly ranks brands based on positive feedback. According to its
methodology, YouGov screens 319 brands by asking respondents if they have heard
positive news, advertising, or word of mouth (WOM) about these brands. These brands
would then receive WOM scores when respondents mention which brands they have
talked about with their family or friends within two weeks.

The latest data for brands in Hong Kong that have received the highest WOM scores
contains statistics collected from young adults between the ages of 18-34, from
September 1, 2018 to August 31, 2019. Although classified differently, a couple of these
brands are related to finances, such as the payment services Alipay HK and WeChat
Pay, which rank 1st and 10th, respectively. Another is the life insurance company AIA
which ranked 3rd.

SNS brands such as WeChat, Whatsapp, and Facebook also scored among the top
WOM rankings at 4th, 5th, and 8th, respectively. Other brands with high ranks include
McDonald’s (2nd), Apple (6th), Asia Miles (7th), and Netflix (9th)