Many people approach me about relocating to Hong Kong, China, (or Asia in general) to start or grow their business. I encourage all of them to come and try – life is short! But I do think it makes more sense to come if you’re interested in some of the following industries. I don’t want you to scan the below industries and then see yours not there and make the decision to not come, the idea is that you can succeed in business anywhere these days with creativity and persistence.
So, let’s get to it!
Bridging China and the West
Some may say Shanghai may be better here, but Hong Kong is more international. Some companies split their operations between Hong Kong and Shanghai. Hong Kong is a more open market, including the internet. Also Hong Kong people are more creative and you can find a greater selection for graphic design and “left brain” work here.
So, I would say that Hong Kong is still the best place to be the bridge, but you may have to travel into Mainland China on a weekly or at least monthly basis to really keep in touch with Chinese business and relationships. But as the Western internet is basically unusable in Mainland China, it forces me to vote Hong Kong as the place to really do your “dual culture”-related business.
May Be Difficult to Do Product Sourcing in Hong Kong
I wouldn’t say Hong Kong is currently the best place to have an import / export business. Most factories moved into Mainland China years ago and rents are sky high. To do product sourcing, you will need to constantly travel into Mainland China. I have talked to Hong Kong-based companies dealing with product sourcing, and they need to have people on the ground in Mainland China as it is tiring to constantly travel back and forth, plus travel costs add up.
It’s Not the Bridge – It’s Actually the Cartilage
A fun thing I learned on a recent podcast with Richard Robinson is that he says we aren’t bridges – we are the cartilage. This is because cartilage is between two solid bones and we need to hold them together, but we are constantly having to bend and get crushed. The two bones aren’t able to bend and flex, so it is constantly grinding and being squeezed and stretched. Sounds painful, and for those who are or have ever been the “bridge” between China and the West must be able to relate with this. I will use that term from now on.
The financial industry has been under heavy disruption over the past few years with Bitcoin and more open merchant account options like Stripe. Hong Kong is a financial leader in Asia and the world, and you can get a lot of customer validation from the many bankers on Hong Kong island. I feel like there still isn’t a good merchant account solution in Hong Kong yet, and I am still trying to figure out why.
The Hong Kong government also has been fairly open minded about the developments of Bitcoin, and you can find a few Bitcoin ATMs around. There is a growing group, Hong Kong Bitcoin Association, that hosts events and supports the community. I am also helping with Asia business development for a Hong Kong-based Bitcoin solution for freelancers and consultants called CoinSimple, and Nikos the CEO has mentioned how open and supportive the Hong Kong government groups, such as InvestHK, have been as well as how they’ve been open minded to new business models and concepts.
There are also crowdfunding sites popping up and the regulations seem to be a little easier for building and marketing these kinds of platforms here.
I think it is tempting to get involved with a disruptive financial service startup that is based in Hong Kong; there is a lot of untapped potential here.
Cross Border E-Commerce
Cross border because Hong Kong is so small you can’t really survive as an online retail business serving the local Hong Kong market. We have had a fun podcast with Jennifer Cheng discussing online and offline e-commerce in Hong Kong, and she says how she is leveraging both her online shop as well as her retail shop to grow her business.
We have interviewed Danny Sung who discussed logistics in Hong Kong and China, and I always get excited about being able to sell both in China and internationally from one central warehouse location. Most e-commerce companies are stuck having to buy and warehouse inventory, and the more you split it up into multiple locations, the harder it is to manage and balance. Hong Kong seems to me to be the best spot for keeping everything in one distribution center if you are targeting China and the USA. While I have recently seen news about Amazon USA delivering to China in 3 days, that still doesn’t solve the issue of shipping an ocean container from a Chinese factory to Amazon’s warehouse in the USA. Having a central distribution center near your factory is key in building up JIT (just in time) inventory combined with low cost, quick delivery. I am still convinced Hong Kong is the best for this – of course, China and the USA both have been beefing up their offerings to better serve global distribution; I think there is a lot of opportunity for new companies to base in Hong Kong and set up something like this.
Education (Cross Border)
We discussed this in an interview with Tytus 9999999 and he said education is often an industry that is overlooked by newcomers to Hong Kong. But the education market is a massive industry globally, and Asian parents especially will pay anything to give their children the best education.
Chinese Students Going to University Overseas
I’m sure you’ve heard about Western universities having a flood of Chinese students who pay top dollar to enter their schools. My son wasn’t even born yet and my wife was discussing strategies on getting him to a top US university (she doesn’t even know the names of them, but wants it to be famous). Crazy, right? These top universities are packed with Chinese students, taking up the maximum quota of international students the school can permit. Therefore, it is getting more and more competitive, and Chinese parents need to step up their game in order to get their kids into school. Making it more competitive creates more opportunities for entrepreneurs and business owners.
Education Before College
On top of the obvious college level admissions opportunities, which has gotten pretty saturated and competitive in my opinion, there seems more “blue ocean” (open waters, opportunity) for educational businesses in younger levels of the education food chain. As we just discussed, it is getting more and more difficult for kids to get into top colleges, so that means parents need to push their kids even harder when they’re younger (ever heard the term Tiger Mom? If not, check that out.)
Professional Career Training
I seriously believe Chinese love to learn at all ages of life. That is something they will value and pay for. Even in the workforce, they want to improve their skills and learn, and I, as a consultant, have often been paid to go into a company and train their marketing department in English. And while the “big boss” can’t read, speak, or listen to English very well, he will sit there with a big smile on his face, happy to see his team learning and improving their skills. In Hong Kong there have been a few academies picking up, such as General Assembly which started in New York, and PaperclipHK.
I believe Asia has to be the most diverse place for languages. And Hong Kong is at a crossroads for sure, with a widely trilingual population speaking Cantonese, Mandarin, and English. If you are passionate about learning and teaching languages, Hong Kong as well as China’s Guangdong Province are hot beds for language learning. I have met countless entrepreneurs and business owners trying to crack the language learning market, and while there are plenty of solutions out there, the market seems promising.
It might be cool to combine language learning and hardware. Hong Kong would be a good place for that, with Shenzhen next door as the hardware capital of the world. Also, if you’re really interested in languages, reach out to me so we can discuss collaboration on a project in which I am involved with Written Chinese and see if we can help each other out!
I was recently at the Start Me Up Venture Forum and there were quite a few mobile app companies on stage sharing their success stories. They also mentioned that the mobile app market in Hong Kong is a hot spot and will continue to be for the foreseeable future. AcceleratorHK was (they currently are not actively accepting new applicants) an accelerator in Hong Kong only for hybrid mobile apps. If you read their homepage, they will clearly show why Hong Kong is a great place for mobile apps, the average Hong Kong person has two mobile carrier subscriptions. Honestly, I have three, and if you enter a taxi in HK you’ll see maybe 6 or more on their dashboard! So, you won’t run out of phones to test on.
Hong Kong Apps Are Mostly for Gaming
I attended a Mobilliance Startup Saturday 2013 in Hong Kong and got tons of insights on the mobile market in Hong Kong. Basically, the verdict was that the majority, by a landslide, was mobile games for the Hong Kong market. Maybe that is also true throughout the world, but from the tone of the meeting, it seems gaming is much more dominating in the Hong Kong and Asian markets. Honestly, I’m sad to hear that, thinking of all that brainpower being used to stare at a digital screen sliding your finger back and forth, but alas, it is what it is. So, as a businessperson reading this article, Asia is the place for mobile games.
Learning (Education) Mobile Apps
A light of hope in this mobile world is bringing education mobile. I am excited for my son to be able to grow up and learn off his mobile phone. Earlier we discussed the opportunities in education; well, if you like education and you like mobile apps, games, as well as multi-lingual technology, Hong Kong is calling you.
I have seen even my five-month-old touching the screen, comprehending a bit of what’s happening (I try to not let him stare too much at the screen), but it is amazing. And I have seen my friends’ kids navigate the phone like a pro at a couple years old. So, imagine the apps that could teach them; I feel that even teachers have to keep up with this mobile and internet world. It makes me feel old when I think about the non-internet classrooms I used to have.
As a businessperson looking for new opportunities, the educational mobile app industry has opportunities, and it can add value to the world, and is welcomed in Hong Kong.
Hardware, Internet of Things
Hardware is the new software. With the rise of Kickstarter and other crowdfunding platforms, hardware is something that can now be funded by your customers before you make heavy upfront investments in things such as a manufacturing mould. 3D printing also allows people to make small runs of goods without even making a mould. We interviewed Julian about his crowdfunding success for AmbiClimate product, which is way oversubscribed. More and more hardware accelerator programs are popping up, such as Haxlr8r (I’m an alumnus of their sister accelerator Chinaccelerator) and Highway1, which give you some funds, expertise, and the platform to make your crowdfunding experience run smoothly.
Hopefully you have some better insights on what industries have an advantage in Hong Kong. Cross border, e-commerce, education, finance, mobile apps, and hardware are the ones I covered. And while I like to say location doesn’t matter, even in this online world, being physically in the right place helps tremendously in growing a successful business.
Did I miss any industries? I will try to keep this post fresh with updates. Please leave a comment and tell me if I am right or wrong here!