International trade has been a cornerstone of humanity almost since inception. It’s allowed ancient civilisations to prosper from local resources, while accessing what they didn’t have the supplies or means to produce themselves. In a modern context, it’s how we’re able to consume goods – food, clothes, furniture etc. – from all over the globe.
Today, a complex web of import and export businesses, small and large, are responsible for the sale and distribution of a variety of products and services. Each business could handle importing, exporting, or both, operating as manufacturer representatives or independent merchants.
It’s big business too – accounting for billions of dollars moving between economies every year. Whether due to availability, reputation or price, countries clamour to import goods that are produced more efficiently elsewhere.
So where do you start? One hotspot you may look to establish an import/export business in is Hong Kong. But what is its status on the international trade market, and what factors should you consider when setting up?
Hong Kong’s status in international trade
Figures released in late 2019 highlighted how Hong Kong’s merchandise trade increased by almost 8% in 2018 to the value of $1,138 billion. The import and export sector accounts for 17.5% of the region’s GDP – employing close to 475,000 people across nearly 100,000 businesses.
Trading firms are active in a variety of profitable markets, including raw materials, machinery, and consumer goods. Products are sourced locally, from around the region for re-exporting, as well as from other countries to be shipped elsewhere without passing through Hong Kong. The region’s offshore trade was estimated at $571 billion in 2017.
Hong Kong’s geostrategic location is a key reason for its popularity with global brands and traders, offering access to both mainland China, a global superpower, as well as the up and coming ASEAN region.
It boasts one of the world’s busiest ports as well as what is widely regarded as the best international airport. It’s also a leading financial center, thanks in part to its low taxation and open economy. In summary, there’s lots to like for manufacturers, importers and exporters.
What to cover before launching your import/export business venture
There are various steps any import/export business will need to take to stand a chance of success in Hong Kong. First things first is to register your business in the region and acquire local licenses.
You’ll then need to pick a product to import or export. Firms in Hong Kong tend to specialise in an industry and represent one or more international brands. Remember, it could be worth monitoring currencies with a trading platform as your transactions will be sensitive to exchange rate fluctuations.
Next is to build relationships and find the suppliers you want to buy from or represent. From here you can price the product itself as well as the value of the services you plan to offer on top. Finding customers is next on your agenda, so it’s a good idea to contact Hong Kong’s trade consulates, embassies and so on.
The final step is to get the logistics down. Your best bet will be to hire a local transport agent – of which Hong Kong has many – to handle shipping agreements while abiding by local regulations.
Where will your import/export business take you?