Cosmetics and Beauty Sector

An Expert's View about Medical, Health and Cosmetics Products in Hong Kong SAR

Posted on: 24 Aug 2012

Hong Kong is a duty free port, and import and export procedures requirements are minimal. Import duties do not apply to cosmetics or beauty products.

Cosmetics and Beauty Sector in Hong Kong Hong Kong is a wealthy, cosmopolitan city. There is a growing demand for quality products from outside Asia. Macao has a thriving hospitality industry. Both Hong Kong and Macao have no sales tax and attract millions of visitors each. Market overview Hong Kong has one of the highest GDPs in Asia and Hong Kong consumers are amongst the most discerning and wealthy in the world. Hong Kong is a very cosmopolitan centre, with many upmarket spas, hair salons, cosmetics and beauty retail operations. Hong Kong & Macao have no sales tax which keeps prices competitive compared to elsewhere in the region. However, prices in Hong Kong tend to be slightly higher than in Europe. This is to compensate for high rents due to retail space being at a premium. Due to its geographical location at the heart of Asia Pacific, Hong Kong also serves as a re- export hub for China and other Asian markets. This allows potential to reach far beyond Hong Kong’s 7 million consumers and 42 million visitors a year (2011 figures). Shopping is the main attraction for many of these visitors. 67% of visitors to Hong Kong in 2011 came from Mainland China, an increase of 24% from 2010. Just under half of Hong Kong’s visitors from Mainland China stayed at least one night. The total spent by visitors to Hong Kong is estimated to have increased 20% from 2010. Mainland visitors accounted for 20% of all retail sales in Hong Kong in 2010 (2011 figures not available), and 50% of all luxury goods sales. Spending on luxury goods in market by Hong Kong locals is forecast to double over the 10 years from 2010 to 2020, whereas spending in Hong Kong by Mainland visitors on luxury goods is forecast to increase by 800%. Cosmetics and beauty products from the UK are well regarded in Hong Kong and are considered to be superior in quality to local products. This applies not just to the luxury end, but also mid end and basic ranges. There are opportunities in Hong Kong in all segments of the market for products with the right branding and USP. Popular UK brands in Hong Kong include Jo Malone London, Lush and Body Shop, which have standalone stores, Molton Brown, which has concessions within department stores and Elemis, which is widely found in upmarket spas. No 7 is sold in a local drug store chain. Men’s spa chain Gentlemen’s Tonic opened a branch in Hong Kong in 2011. Macao is a much smaller market than Hong Kong, but has been developing rapidly for a number of years. Since the liberalisation of the gaming industry and the opening of several new resort hotels the gaming and spa industry have grown rapidly. Gaming revenue now exceeds that of Las Vegas, and Macao’s GDP per head now exceeds that of Hong Kong. Key opportunities ξ Big name luxury brands ξ Organic ranges and natural products ξ Innovative beauty products ξ Everyday products with a USP ξ High end spa products Latest export opportunities – Clothing, Footwear & Fashion Latest export opportunities Hong Kong Getting into the market Hong Kong is a duty free port, and import and export procedures requirements are minimal. Import duties do not apply to cosmetics or beauty products. There are no specific labelling regulations for cosmetics or beauty products and no requirement to obtain licences or certification. Although not a requirement, products having approval from the US FDA are given preference by many of those operating in the beauty and cosmetics sector in Hong Kong. For big names, a standalone store is an option. Most brands work with a local brand operator, typically on a joint venture or franchise basis, but this is not mandatory. A common route to market is to appoint a distributor based in Hong Kong. Some retailers such as the Lane Crawford Joyce Group (for luxury brands) and the main drugs stores, Watsons and Mannings (for mid and basic ranges) buy direct from the UK, as do some spas and salons. More about doing business in Hong Kong Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists based overseas - or contact your local international trade team Caroline Sprod, Assistant Trade Commissioner, British Consulate-General Hong Kong. Tel: +852 2901 3360 or email: Kate Strutt, Senior Trade Adviser, British Consulate-General Hong Kong Tel: +852 2901 3464 or email: UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events – Clothing, Footwear and Fashion Major Events Cosmoprof Asia 2012 Date: 14 – 16 November 2012 Website address: Useful links More about OMIS and other UKTI services for exporters
Posted: 24 August 2012

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