As a regional trading center and gateway to the Chinese mainland, Hong Kong is an attractive market for many foreign companies. Imported goods, especially alcohol, are well represented in the market. Meanwhile, consumption continues to increase year-by-year as the emerging Hong Kong middle-class demand better quality alcoholic beverages. Imports are also surging as consumers steadily show support for international brands.
Since the elimination of import duties in 2008, Hong Kong presents few challenges for foreign companies compared to most overseas markets. Exporting products is a straight-forward process. Businesses must follow the strict regulations set by Customs and prepare pertinent documents like origin certification, import/export manifest and insurance policy to facilitate Customs clearance. This is to avoid delays in shipment and other setbacks.
Maneuvering in Hong Kong’s Competitive Alcohol Market
Hong Kong’s market, while highly developed, is relatively small and less likely to support a high volume of goods. Because of this, competition is intense among alcohol producers and retailers. Working alongside a local partner helps companies determine the best channels to use to reach out to their target consumer groups.
Hong Kongers have easy access to alcohol through both off-trade and on-trade channels. Supermarkets, specialty and convenience stores account for most of the alcohol sales (e.i. liquor and beer) in the region since they cater to a wider range of wine drinkers. Meanwhile, on-trade sales have been outperforming off-trade sales when it comes to wine.
In recent years, e-commerce has become a significant platform for the retail market in Hong Kong. While brick-and-mortar shops remain the go-to places for the consumers’ purchases, many of them have warmed to online shopping due to convenience. Recent research indicates that Hong Kongers are more impulsive when buying online.
Tariffs, Regulations and Customs
Hong Kong is a free port with no general tariff on imported goods. There is zero per cent duty for wine and beer, while excise duty is applied for certain liquors (those with an alcoholic strength of more than 30% by volume). Exporters also do not have to pay for value-added tax (VAT) or goods and services tax (GST). Meanwhile, products that are to be re-exported and not consumed in the region are likewise not subjected to excise duty.
After shipment of goods, exporters are required to submit an export declaration with the Commissioner of Customs and Excise within 14 days. They must also follow the control importation measures set by the Hong Kong Customs. Some of these regulations include the Preservatives in Food Regulation 2008, Food and Drugs (Composition and Labelling) Regulations and the Food Safety Ordinance.
Hong Kong is a significant market for imported alcohol and an ideal platform for doing business in Asia, especially China. With low trade barriers, the region is highly accessible for many foreign companies. To hasten the exporting process and avoid problems, it is important for businesses to understand and follow the regulations and local standards set by the government.