Business Startup Trends in Hong Kong
We’ve all seen a new business or industry seemingly appear out of nowhere, suddenly flourishing into a major player with millions, if not billions of revenue streaming in. Naturally, we all wonder how we could have gotten in at the ground floor.
Hong Kong is a prolific incubator and cultivator for successful startups, largely thanks to its robust and modern infrastructure, skilled workforce, low tax rates, and proximity to Mainland China.
Current figures show there are currently over 3,000 startups in Hong Kong, up 42.8% from 2017. With that in mind, you can see why Hong Kong might just be the perfect place for you to find the next big thing.
We’ve taken a look at trends in global business, and identified 7 types of high demand businesses that will develop and prosper in Hong Kong in 2020 and beyond. Some are small businesses you can start yourself, others are large industrial movements you can become an investor in.
If you want to get a head start on the next big thing, read on.
1. Smart Cities
Don’t be put off by the rather vaguely futuristic nomenclature here — smart cities are very real, and big business right now. In essence, a smart city is a city connected by an ‘Internet of Things’ (IOT). Think of your home tech like smart light bulbs, but on a citywide, civic scale. It’s fundamental goal is to increase efficiency, and reduce waste. So for example, a rubbish truck will know what public trash cans are full and which ones are empty, so it doesn’t waste fuel driving to empty trash cans.
Thanks to Hong Kong’s dense population and already world class infrastructure, many smart city investors see the region as a paradise for testing and development of their technologies.
The Hong Kong Government is very aware of this opportunity, and laid it out accordingly in their 2017 report, the Hong Kong Smart City Blueprint .
2. Artificial Intelligence
Far from the realms of sci-fi, artificial intelligence (AI) is now very much a real player that promises to be the next form of industrial revolution. That may seem like lofty praise, but the world’s smartest investors are heavily involved in its advancement. For some context, Japan’s richest man, and founder of the Softbank group, says he devotes 97% of his time to AI.
Hong Kong is very much invested in the climb towards automation and connectivity, and has been ranked third in the world for field-weighted citation impact on the AI industry. Hong Kong AI companies like SenseTime are leading the way locally, with many startups following in their footsteps in the race to full AI.
Related Read: 9 top benefits of doing business in Hong Kong »
Cryptocurrency, mobile payments, and robo-stock advisors are all examples of the explosion of global fintech in the last few short years. As startups clamber to look for efficiencies and ways to cut out middlemen in financial transactions, Hong Kong has risen to be a major global player in the industry.
There are currently over 550 fintech companies in Hong Kong, with a total value of S$12.5 billion. This all makes sense when you consider that the Hong Kong government actively supports these startups, as well as the banking sector helping with open banking initiatives and virtual bank licences.
All of this adds to a region of just 7.5 million people being the number 11 fintech economy on the planet.
4. Healthcare Products
Mainland China has had its issues with the safety of its health products over the years, so it is unsurprising that Hong Kong has been a trusted destination for Mainland Chinese to purchase safe healthcare products. Anyone who has taken a stroll through Sheung Shui (a short drive from Shenzhen) will have noticed the plethora of pharmacies, and that they all speak Mandarin to accommodate their Mainland Chinese customers.
The image alone of Hong Kong being a more Westernised region compared to Mainland China is a huge drawcard, so setting up an online healthcare product store would be a smart move. You can also of course take advantage of the free trade agreement between Mainland China and Hong Kong.
5. Global Franchises
With Hong Kong essentially being the global hub for the melding of East and West, there are abundant opportunities to bring Western franchises into the local economy. Interestingly, franchise operations are not required to register with the Hong Kong Government or any of the trade associations, so the offer and sale of franchises is only subject to common law, and not franchise contract specifics.
6. Fitness Boot Camp Classes
Hong Kong has not been immune to the global surge in the interests of personal health and wellbeing, and the local fitness industry is booming accordingly. While gym memberships have been the traditional option for most people, their popularity has waned as the boot camp phenomenon has come into vogue.
Hong Kong is obviously notorious for its tight living spaces, and the prospect of getting outside with other like minded people has become very appealing to many Hongkongers. Additionally, bootcamp prices are generally lower for the consumer than gym memberships, and the class can be held in any public outdoor space.
The beauty of it is, most personal trainers generally don’t have a lot of capital to start a Boot Camp business, so if you can find the right trainer, and invest some (minimal) capital for them, you should be able to generate some almost passive income.
7. Housework/Domestic Services
There is no doubt that HongKongers are known for being industrious workers, which often leaves a lot left not done on the domestic front. Herein lies the opportunity to invest in domestic services that can take care of the more menial tasks in domestic life, such as laundry and housekeeping.
Wages are low, capital requirements are not huge, and it should be an easy sell to a large number of customers if your pricing and pitch are on point.
There will always be new business coming forth, growing and capitalizing on the current environment — the question is, can you catch and ride the wave from the beginning? As Hong Kong’s premiere business incorporation service provider, HKCR knows how to maximise your chances of success when you start your new business. If you’d like any advice on transitioning into a new industry, please do contact us, it’s both our job and pleasure to help.
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