3 March 2014
Marketing Services Industry in Hong Kong
- Hong Kong is the marketing services capital of Asia, where a full range of services can be found. The sophistication of the market has attracted a strong presence of multinational agencies and a critical pool of marketing services talents. The majority of multinational agencies have their regional headquarters set up in Hong Kong to take care of regional business.
- Hong Kong’ advertising spending (adspend) continued to increase in 2013 with mobile media showing the fastest growth. Hong Kong’s exports of marketing services expanded 12.6% to HK$5.7 billion in 2011, much higher growth than 2010.
- According to ZenithOptimedia, adspend of Fast-track Asia (including the Chinese mainland, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam) is estimated to increase by 10.7% in 2013. The mainland was the world's third biggest advertising market in 2013 and is catching up quickly with second-placed Japan.
- The Chinese mainland is widely regarded as having the best growth potential for marketing services companies. Hong Kong is the gateway to this land of opportunities in light of the mainland's World Trade Organisation (WTO) liberalisations and the Closer Economic Partnership Arrangement (CEPA) agreement with the mainland.
Advertising and Market Research
Number of Establishments
Number of Persons Engaged
Sources: Quarterly Report of Employment and Vacancies Statistics, Census and Statistics Department
Range of Services
Hong Kong offers a full range of marketing services (advertising, brand/image consulting, event organising, public relations/corporate communications and market research). Large Hong Kong-based companies are able to provide one-stop solution to clients. Hong Kong has a highly developed consumer market, which offers an excellent testing bed for marketing concepts and techniques. Hong Kong companies are thus sophisticated users of marketing services.
Advertising: Advertising agencies initiate, manage and implement advertising campaigns. In general, advertising agencies provide three major types of services, namely account management, creative services and media planning. Those that provide all three services are traditionally called full-service agencies. Some bigger multinational agencies also provide related services such as sales promotion and public relations, while smaller ones may only provide a more limited range of services. Many advertising agencies spin off their media planning department as specialist companies.
Brand Consultancy: There is growing awareness of the importance of branding and corporate identity by enterprises as an essential component of business success, especially among those that would like to expand beyond home market. Agencies which specialise in brand consultancy have become increasingly high-profile players. Services provided include brand strategy, brand extension and expansion, brand communications and planning and internal branding.
Event Organising: Being the premier trade fair capital in the region, Hong Kong is the host to a wide range of trade fairs and international events. In general, the larger international event organisers tend to provide a one-stop-shop solution by organising conferences, seminars or other side events as a supplement to the exhibitions and have a wide variety of shows. By contrast, the smaller organisers tend to specialise in organising similar shows in different locations.
Market Research: Market research involves studying people as buyers, sellers and consumers, examining their attitudes, preferences, habits, and purchasing power. Market research is also concerned with the channels of distribution, promotion and pricing, and the design of the products and services to be marketed. A large portion of the work performed by most market research firms is commissioned by specific companies for particular purposes. However, some firms also routinely collect a wide spectrum of data and then attempt to sell some or all of it to companies that may benefit from such information. Market research may be quantitative, qualitative, or a combination of both.
Public Relations: PR professionals help clients to develop communication and understanding with the target audiences. Services include media relations, marketing, copy-writing, press office, sponsorship, events and conference management etc.
Hong Kong has a developed marketing services market which is dominated by the multinational agencies. Many multinational marketing services companies have a strong presence in Hong Kong and have their regional headquarters set up here to take care of their regional business. There are also a large number of smaller companies / consultants.
Advertising, Public Relation Services and Market Research
Advertising, market research & public opinion polling services (HK$ mln)
Year on Year Growth %
Contribution to total services exports (%)
Business & management consultancy & public relations services (HK$ mln)
Year on Year Growth %
Contribution to total services exports (%)
Source: Report on Hong Kong Trade in Services Statistics for 2011, Census and Statistics Department
Major services exported include: creative advertising, media buying, direct marketing, graphic design, marketing consultancy, customised market research and sales of research data. Other related exports include Hong Kong-based crew producing advertisements on behalf of overseas clients.
Industry Development and Market Outlook
According to admanGO, a media-monitoring firm, Hong Kong’ advertising spending reported a record high of HK$43.1 billion in 2013, up by 9% from 2012, with advertisers in the banking and investment services sector continually topping the league.
According to ZenithOptimedia, adspend of Fast-track Asia is estimated to have grown rapidly by 10.7% in 2013 due to the adoption of improved technology and practices from developed economies and strong investment inflow to this region.
Markets other than North America, Western Europe and Japan, which are broadly grouped as rising markets, are seen as the growth driver between 2013 and 2016, contributing more than 60% of the world’s adspend growth during the period. In comparison, the share of the global ad market is expected to rise from 35% to 39%. China was the world's third biggest advertising market in 2013, after the US and Japan. It is fast catching up with second-placed Japan. In 2005, China’s advertising market was 23% of Japan’s, and it went up to 77% in 2013 and is estimated to reach 98% by 2016.
Top 10 countries by advertising expenditure, 2013
Advertising spending in China
Source: CTR Media Intelligence
According to CTR Market Research, China’s total adspend saw a growth of 4.5% in 2012, much lower than 13% in 2011. Among all sectors, radio media experienced the fastest growth, up from 8.9% in 2012. In contrast, newspapers advertising contracted by 7.5%, affected by the slower growth in retail sales and the rise of online retailing. With an above-average growth, TV advertising retained the largest market share.
According to admanGO, TV and newspapers were Hong Kong’s most important advertising medium in 2013 with a 30% adspend share each. Traditional media was still dominant, accounting for 91% of total adspend in Hong Kong. The banking and investment community continued to be the biggest advertiser category, led by HSBC, Promise Finance and Citibank.
P&G was the biggest advertiser for the third consecutive year, spending HK$955 million in 2013. On the other hand, Dairy Farm Group increased adspend by 25% to HK$689 million, the biggest growth among other companies.
As mobile devices become more popular in Hong Kong, advertisers are willing to spend more on mobile advertisement. In 2013, adspend in mobile rose drastically by 312% from 2012. The banking & investment services category spending the most on this advertising platform (HK$75 million), growing drastically by 235% from 2012.
The demand for Hong Kong's quality marketing services, from MNCs as well as established companies on the Chinese mainland, has been rising in light of a more competitive post-WTO environment.
- With more foreign companies entering the mainland market, fierce competition drives up the demand for spending on marketing services.
- Hong Kong companies with manufacturing facilities on the mainland focus more on domestic sales and distribution. Hong Kong marketing services companies are old partners to work with.
- More and more mainland companies come to understand the importance of advertising, brand building and corporate identity building. Increasing competition and more sophisticated consumers will necessitate mainland enterprises to pay more attention to market intelligence.
- There is increasing demand for public relations service from mainland companies that are going "global". They will need advice from communications professionals with experience and expertise. Given the language and cultural proximity and the fact that such mainland companies usually have a base in Hong Kong, they are more likely to entrust Hong Kong marketing services firms to advise on achieving a quick and seamless integration with the international community.
Hong Kong's marketing services companies are first-movers in the mainland market. Mainland business has also become an increasing source of income for Hong Kong marketing services companies. The CEPA agreement further facilitates Hong Kong marketing companies' expansion in the mainland market. For instance, Hong Kong companies were permitted to establish wholly-owned advertising firms on the mainland as early as 2004. As of end-January 2014, the Hong Kong government had granted Hong Kong Service Supplier (HKSS) certificates to 128 advertising companies out of 134 applications.
CEPA has also helped Hong Kong companies engaged in trade mark business to enter the Chinese mainland market. Supplement I to CEPA signed in 2005 stipulated that HKSS are permitted to set up limited liability corporations in the form of joint ventures on the mainland, undertaking a range of trademark-related business, including the provision of legal advice, and acting as legal consultants on trademark laws. Under Supplement X to CEPA, contractual service providers employed by HKSS are allowed to provide trademark-related services on the mainland from January 2014. As of end-January 2014, 11 trademark agencies had obtained HKSS certificates.
Supplement I to CEPA also stipulated that Hong Kong residents with Chinese citizenship can take the National Qualification Examination for Patent Agents and practice in a mainland patent agency after passing the examination and completing a year of apprenticeship, handling patent-related business including consultation services.
Supplement IV to CEPA also stipulated that HKSS are allowed to set up joint venture enterprises on the mainland to provide market research services.