19 June 2008
Trade Spotlight on the United States and Southeast Asia
HKTDC Regional Directors and Consultants Brief Hong Kong SMEs
19 June 2008 - A series of market briefings yesterday updated Hong Kong SMEs on trade issues and opportunities in the United States, Thailand, Vietnam, Cambodia and India. The briefings, presented by regional directors and senior consultants from the Hong Kong Trade Development Council (HKTDC), were held at the Hong Kong Convention and Exhibition Centre.
US Market Update
Richard Tam, HKTDC Director, Chicago, saw promise in the US, despite the prolonged economic downturn. "A high inflation rate and a slowing economy in the US have weakened the purchasing power of consumers, yet they still need to buy. It's just that they now shop more in hyper-markets, discount stores and other such outlets."
Sales of luxury products, he added, are unlikely to change significantly. "A certain group of consumers in the major cities still prefers high-quality brands, and they are very much influenced by TV, movies and their peers to go after high-end and trendy products," Mr Tam said.
Looking at product trends, Louis Ho, HKTDC Director, New York, noted that the commercialisation of technology has meant new business opportunities. Some Hong Kong companies, he said, are cooperating with US firms to develop innovative products in home electronics and toys.
Thailand Market Update
Loretta Wan, HKTDC Regional Director, South East Asia and India, outlined Thailand's Investment Year, 2008/09, at the Emerging Market Opportunities in South East Asia briefing. The Thai programme includes new measures meant to restore investor confidence and upgrade industry competitiveness. "The Thai government is promoting bio-technology, alternative energy sources and other advanced technology, providing tax incentives for machinery and technology upgrades. Hong Kong companies can set up related business or factories to leverage on the incentives," Ms Wan told the SMEs in attendance.
Among the world's top 10 producers of cars and trucks, Thailand has experienced tremendous growth in the automobile industry in recent years, and its auto exports (vehicles and parts) reached US$14.7 billion in 2007.
"Some Thai companies are sourcing auto parts from the Chinese mainland through Hong Kong, so there is also potential for Hong Kong companies to be part of the supply chain," Ms Wan said.
Vietnam and Cambodia Market Updates
Vietnam has recently been hit hard by soaring food and oil prices, and the government is to trying to rein in inflation, which has climbed to 16 per cent.
"Though costs are rising in Vietnam, many of the fundamental advantages remain, including an inexpensive labour force with a high literacy rate, risk diversification, a base for exports and stable political and social conditions," said Tina Phan, HKTDC Director, Vietnam. "The country's young population has further contributed to its emerging retail market," Ms Phan added.
Turning to Cambodia, Ms Phan said that wages there were much lower than in Vietnam. Cambodia's tax system and investment incentives are also more attractive. Nevertheless, Ms Phan cautioned that Cambodian law, while of international standard, is not uniformly enforced. Both countries, she added, are short of managerial talent and weak in local supporting industries.
"Potential sectors for Hong Kong in these markets include electronics, building and construction materials, machinery and equipment, financial services, telecom service, education and training," Ms Phan said.
India Market Update
India's economy is booming, with foreign direct investment rising dramatically over the last two years. The good-news economy has also boosted consumer demand. Hong Kong exports to India jumped 51 per cent last year.
"With growing manufacturing in the country, design needs in such sectors as electronics, semiconductors, animation, engineering, architecture, automobiles, fashion and textiles are also growing," said Iyer Narayanan, Marketing Manager, Mumbai consultant office. "So there is increasing demand for international design with practical suitability to Indian culture."
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, visit www.hktdc.com