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Houseware Industry in Hong Kong

  • Hong Kong is a famous international sourcing centre for houseware products, including tableware, kitchenware, non-electric domestic cooking/heating appliances and sanitary ware made of a vast variety of materials.
  • In response to the intensified competition from indigenous Chinese companies and other Asian suppliers, Hong Kong companies are shifting from original equipment manufacturing (OEM) to original design manufacturing (ODM). A few also develop and market their own brands. They are also moving upmarket by using more advanced technology in production, providing innovative designs and improving product quality.
  • The retail scene in overseas markets is dominated by giant retailers who have bigger bargaining power than suppliers. They push hard for low prices, resulting in an ongoing trend of outsourcing production to low-cost areas, including the Chinese mainland.

Industry Features

Hong Kong is a well-known international sourcing centre for houseware products. The industry itself covers a wide range of products including tableware, kitchenware, non-electric domestic cooking/heating appliances and sanitary ware which are made of an array of materials, such as ceramic, metal, glass, paper, plastic, porcelain and china.

Companies in the field of metal cookware and kitchenware provide a comprehensive selection of products, including saucepans, casseroles, frying pans, Dutch ovens, steamers, egg poachers, double boilers and frying baskets. Stainless steel is the most commonly used material due to its durability. Aluminium-made cookware is also available, with porcelain-enamelled exterior and the interior coated with non-stick material.

Others focus on plastic-ware, including tableware, kitchen utensils, water pots, trash bins and bathroom accessories. The majority of them are small to medium-sized companies since production of plastic houseware, especially the smaller items, requires comparatively less labour input and capital investment. Sophisticated moulding techniques are generally not required for lower-end products. As such, some toy makers also engage in plastic houseware as their sideline business. On the other hand, the production of larger plastic houseware, such as buckets, basins and baskets, is dominated by a few large manufacturers since heavy capital investment is required for installing large machinery.

Hong Kong companies are also noted for producing convincing replicas of artefacts dating from the Tang Dynasty. These imitations are accurate reproductions in every detail, ranging from small ceramic horses to large pieces of Tang Dynasty tomb servants.
Owing to the high production cost in Hong Kong, most Hong Kong manufacturers have relocated their production to the Chinese mainland. Other high value adding functions, such as sourcing, logistics, product development and marketing are maintained by the Hong Kong offices.

Most Hong Kong houseware production is on an OEM basis. Facing intensified competition from indigenous Chinese companies and other Asian suppliers, Hong Kong manufacturers are shifting from OEM to ODM. A few also create and market their own brands (OBM). Some manufacturers apply more advanced technologies in the production process, such as gas-assisted and injection compression moulding in plastic houseware production. More resources are used in product design and maintaining product quality to increase the competitiveness of Hong Kong products.

Performance of Hong Kong Exports of Houseware Products [1]

Hong Kong's total exports of houseware products remained sluggish in recent years, dropping by 17% in 2016, after a decline of 12% in 2015. The EU and the US were our largest markets, which together accounted for 51.5% of the total. In 2016, exports to the US dropped by 17% while sales to EU saw a decrease of 20%. Other major markets included Chinese mainland, Japan, ASEAN and Macau, which in sum made up another 32.8% of the total exports of houseware products. Product-wise, plastic houseware, and metal cookware and kitchenware, were the two largest export categories of the industry, which together accounted for 76.8% of the total in 2016.

Household goods, covering not only most houseware products, but also electrical appliances and electronic products such as radios, shavers, dish cleaning machines, refrigerators, etc, saw a marginal increase of 1% in 2016, after a small decline of 2% in 2015.

Table: Performance of Hong Kong Exports of Houseware Products
Table: Performance of Hong Kong Exports of Houseware Products


Table: Performance of Hong Kong Exports of Houseware Products
Table: Performance of Hong Kong Exports of Houseware Products


Table: Performance of Hong Kong Exports of Houseware Products
Table: Performance of Hong Kong Exports of Houseware Products


Table: Performance of Hong Kong Exports of Houseware Products
Table: Performance of Hong Kong Exports of Houseware Products

Sales Channels

Department stores, retail chains and mass merchants remain the dominant retail channels for houseware products in mature markets like the US, EU and Japan but increasingly, consumers also look for niche products online. Hong Kong manufacturers usually deal directly with overseas retailers or through their buying offices or agents in Hong Kong. Hong Kong companies also enter into licensing agreements for production with some overseas brand holders. This is especially common for kitchenware and cookware. For markets with smaller order sizes, trading firms are often involved as an intermediary. A few well-established manufacturers have their own overseas offices responsible for marketing and other liaison activities.

Many manufacturers attend international trade fairs in order to increase their exposure in overseas markets. Below is the schedule of some major trade fairs:

Table: List of Some Major Houseware Trade Fairs
Table: List of Some Major Houseware Trade Fairs

Industry Trends

In most of the mature markets, the retail industry for houseware is dominated by a few large chain stores or discount giants. These overseas buyers have strong bargaining power as they usually place large-volume and repeated orders from a few suppliers. Over the years, Hong Kong manufacturers have proved themselves reliable and maintained a good market position by providing good-quality products at a competitive price. Yet they are facing fierce competition from other suppliers in the region. To stay competitive, Hong Kong manufacturers are undertaking more ODM and licensing arrangement. Licensing is especially common in the kitchenware sector for US and European brands as consumers in general favour brand-named products as well as other private label items owned by department stores and chain stores.

On the distribution side, internet sales of houseware have continued to grow as consumers increasingly enjoy the ease, convenience and board assortments of online shopping. Besides buying from pure-play online retailers, it is also common to buy online and pick up at the local stores. An efficient logistics system and inventory management hence become more important for both e-tailers and brick-and-mortars. Furthermore, the use of big data analytics enables retailers to be more responsive to consumer preference.

CEPA Provisions

Under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), the mainland has given all products of Hong Kong origin, including houseware, tariff-free treatment starting from 1 January 2006. According to the stipulated procedures, products which have no existing CEPA rules of origin can enjoy tariff-free treatment upon applications by local manufacturers and upon the CEPA rule of origins being agreed and met. Non-Hong Kong made houseware products are subject to tariff rates up to 24.5% when entering the mainland.

The promulgated rules of origin for houseware products to benefit from CEPA's tariff preference are basically similar to the existing rules governing Hong Kong's exports of these products, requiring the performance of specific manufacturing processes in Hong Kong, such as die-casting/blanking, forming and assembling for table articles. Detailed information is available here.

General Trade Measures Affecting Exports of Houseware Products

Houseware exports are subject to certain food sanitation laws and ordinances, especially for kitchenware and other products which have direct contact with food. For example, the Japanese Food Sanitation Law stipulates regulations and standards not only for food, but also for food containers and packaging. In Japan and the US, ceramic and porcelain tableware is subject to lead and cadmium leaching standards.

In the EU, a new regulation called Plastics Implementing Measure (PIM), which comprises of regulations of contents, testing conditions and documentation requirements, has been adopted since May 2011. The regulation applies to materials and articles made entirely of plastic, as well as plastic layers that are used in multi-material articles. The PIM lists all permitted substances and indicates restrictions for individual substances. Substances not included in the lists will not be authorised for use in food contact plastics.

On the other hand, the EU has also tightened importing rules for polyamide and melamine plastic kitchenware from China and Hong Kong since July 2011. Kitchenware from China and Hong Kong now can only be imported into the EU with a declaration certifying their compliance with requirements on primary aromatic amines (PAAs) and formaldehyde.

Product Trends

Bright colours: The use of bright colours has become a key trend in home designs. Green, for instance, from light and pale to rich and neon retro green hues, is often used to create a natural feel of a home. Other bright and modern colours such as pink, purple and orange are also popular for brightening up kitchens and rooms. Responding to the trend, suppliers are keen on creating unique and modern designs of kitchen decor accessories, tableware and decorative fabrics, utensils, lamp shades and kitchenware in vibrant colour palettes for easy mix-and-match.

Smart and innovative designs: Recent years have seen more new products with smart designs, multi-functional and innovative features. Examples of these products include a set of knife blocks with concealed, hygiene-boosting air vents in their base and water jugs with in-built filters that provide a good solution for the provision of quality drinking water. Besides, tech gadgets have started to enter the kitchen space. For example, some kitchen baking scales can now be connected to an iPad app which would provide instructions to make a perfect cake.

Simple and healthy lifestyle: People are getting more health-conscious and prefer eating healthier and simpler. Kitchen tools that help cook healthy meals and craft a simple lifestyle will continue to be popular. For example, consumers prefer cookware and kitchenware with non-stick surface that are easy to clean up. Steamers and pans which require less oil for cooking are appealing. Handy gadgets such as salad choppers and juicers are much sought-after.

Houseware gift sets: Fewer people purchase premium ceramic and porcelain products for their own use. Instead, they would purchase them as gifts. Now, gift sets usually offer several kinds of products, instead of the traditional gift sets which contain a large quantity of the same item. For other kitchen giftware and accessories, opaque and transparent coloured plastics have replaced stainless steel and aluminium as the preferred choice of materials.

Increasing awareness of the environment: Consumers have become more conscious of global warming and other environmental impacts. Consumers are buying more green products while manufacturers have also realized the potential of cost savings from materials and packaging, making pro-environment designs and materials become the hot choice of houseware producers and buyers.

[1] Since offshore trade has not been captured by ordinary trade figures, these numbers do not necessarily reflect the export business managed by Hong Kong companies

Content provided by Picture: Wenda Ma
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