16 Sept 2009
Quarterly Export Index Indicates Trade Expansion Near
Mainland Middle-Class Consumers Aspire to Hong Kong Lifestyle
16 September 2009 – The HKTDC Export Index rose to 48.3 in the third quarter of 2009, a signal that trade expansion may be nearing. It is the third straight quarterly improvement and the highest in six quarters. The index for the mainland market rose above 50 for the first time since the third quarter of 2008.
While more local companies are looking for opportunities on the mainland, a survey conducted by the Hong Kong Trade Development Council (HKTDC) showed that mainland middle-class consumers are interested in Hong Kong trends and culture.
The findings of both surveys are published in the new issue of the HKTDC Trade Quarterly.
The latest HKTDC Export Index, which was designed to track changes in Hong Kong’s export confidence, indicates some stabilisation in Hong Kong exports, although a reading below 50 still indicates more pessimists than optimists. “The readings for all major markets struck higher in the third quarter, suggesting a sustained and across-the-board improvement in export confidence,” HKTDC Chief Economist Edward Leung said today at a press conference. “Particularly encouraging, the index for the Chinese mainland rose above 50.”
To better understand the business environment facing Hong Kong companies on the mainland, the HKTDC has been interviewing 500 Hong Kong companies on a quarterly basis, focusing on companies that source, produce or sell across the boundary. In the third quarter, with the export environment improving, the majority of respondents made aggressive plans to expand their businesses, including improving product quality and developing new products.
Mainland Middle-Class Study
The HKTDC’s June survey of the mainland’s middle class targeted lifestyle trends and interests and attitude to such Hong Kong-style products as furniture and fashion. “The information we get from this study can help Hong Kong companies develop new products and devise strategies for opening up the mainland market,” said Mr Leung. The full survey report is now being compiled and is expected to be available at month’s end. Preliminary findings indicate that middle-class consumers on the mainland look to Hong Kong for the latest global products and trends.
Some 73 per cent of respondents said they wanted to reward themselves by having “a rich material life,” while 64 per cent said it was worth paying more for a product or service they liked. In addition, 68 per cent expressed an interest in Hong Kong trends and culture, and 49 per cent said that their clothing, lifestyles and tastes were influenced by Hong Kong.
“Hong Kong is viewed as a city where east meets west, a culture that has a broader vision and international experience, and a place where there is good quality control and design,” said Mr Leung. “That’s why mainland consumers aspire to the Hong Kong lifestyle. For mainland consumers, Hong Kong trends are, indeed, more compatible and accessible than those in the United States or Europe, while Hong Kong celebrities and professionals are universally admired.”
Mr Leung said he believes that these perceptions about Hong Kong products and services can be translated into sales in markets throughout the mainland.
Dressing the Mainland
The findings are in line with earlier HKTDC studies, including last year’s survey on garment sales in 13 mainland cities. The respondents generally considered Hong Kong brands to be trendy and stylish, and were willing to pay a premium – 49 per cent, on average – for Hong Kong brands of equivalent quality to mainland brands.
“Hong Kong companies have considerable advantages in selling garments on the mainland,” said Mr Leung. “As long as they have a clear market positioning and target specific customer groups, it should not be difficult for Hong Kong companies to build brand awareness there.”
He added, however, that they should maintain the high quality of their products, and enhance their sales and after-sales service, since mainland consumers are attaching increasing importance to quality and service.
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About the HKTDC
Established in 1966, the Hong Kong Trade Development Council (HKTDC) is the international marketing arm for Hong Kong-based traders, manufacturers and service providers. With more than 40 offices worldwide, including 11 in the Chinese mainland, the HKTDC promotes Hong Kong as a platform for doing business with China and Asia. The HKTDC also organises trade fairs and business missions to connect companies with opportunities in Hong Kong and the mainland, while providing information via trade publications, research reports and online. For more information, www.hktdc.com