Canada Agri-food and Seafood Exports to Hong Kong

Alberta Food Exports to Hong Kong

As agricultural production is small and more than 95% of Hong Kong’s food supplies are imported, Hong Kong is an attractive market for imported food products. China is Hong Kong’s major food supplier and continues to lead the market due to proximity.

In 2015, the largest sources of food supply for the Hong Kong market were from China (23.5%), the US (16.7%), Brazil (8.0%), Netherlands (6.0%) and Thailand (4.8%). While China continues to be a leading supplier of fresh produce to Hong Kong, Hong Kong buyers source the best-value products from all over the world.

Hong Kong consistently ranks in the top 10 export markets for Canadian agriculture and agri-food products despite a population of only about 7 million. Hong Kong’s central location in Asia, sophisticated infrastructure, and large number of Chinese and Asian tourists make it a trend-setting showcase for new and innovative food products in Asia. Due to food safety concerns, affluent Mainland Chinese consumers seek products imported from countries with reputations for food safety, such as Canada, despite potentially higher prices.  They travel to Hong Kong to purchase imported products, such as infant formula, nutraceuticals, confections, and prepackaged foods and beverages.

In 2015, Canada was Hong Kong’s eighth largest food supplier with an approximately 2.6% market share and a total export value of more than C$740 million excluding fish and crustaceans. Canada’s top agriculture and agri-food exports to Hong Kong in 2015 were North American ginseng roots (C$260 million); raw furskins (C$170 million); fresh/chilled and frozen beef and beef offal (C$88 million); canola oil (C$50 million) and fresh/chilled and frozen pork and pork offal (C$43 million).

Canada is Hong Kong’s leading supplier of North American ginseng, food grade soybeans, and canola oil, reflecting Canada’s global advantage in these products due to quality, price and supply.

There are no tariffs levied on food import to Hong Kong except on beverages with alcohol content greater than 30% (spirits). Local buyers are keen to source new and best-value products globally Hong Kong is a competitive marketplace where suppliers compete on a global scale.

Source: Exporting to Hong Kong, Agriculture and Agri-Food Canada, Government of Canada

Market Challenges/Competition

• Hong Kong is a highly competitive and mature market. There is strong competition from China, USA, EU, Japan, Korea, Australia, New Zealand, Thailand, Brazil, Malaysia, Eastern Europe, and other countries. Marketing is essential for visibility. Multinational companies are willing to invest heavily in marketing activities in order to capture market share. As many Canadian agri-food processors are SMEs, it can be a challenge to allocate the same level of marketing resources to Hong Kong as multinational firms.
• Although Canada enjoys a reputation for providing quality food products, awareness of Canadian retail brands is weak in Hong Kong. Most of the products Canada exports in large volume are non-food items, commodities or unbranded items destined for the food services industry or further processing.  Canadian exports of pre-packaged retail products to Hong Kong are limited.
• “Hong Kong companies are highly price-sensitive due to high real estate and logistics costs and need to be competitive on slim profit margins.”
• “There is often a good selection of competitive products available on retail shelves. Attractive packaging and innovative promotions, particularly on mobile social networks, are essential to capture consumer interest particularly in the younger demographic.”
• A continuous and responsive dialogues with Hong Kong buyers are essential. Suppliers “must be ready to deal with a different business culture while being flexible and responsive. Hong Kong companies are professional traders and quick response is crucial for exporters wanting to succeed in this market. Brand owners should be ready to support promotional efforts in-market to establish branding, consumer loyalty, and sustained sales.”
• High marketing costs if using conventional marketing and promotional tools. Social media such as Facebook is becoming an effective channel to reach target customers.

Source: Exporting to Hong Kong, Agriculture and Agri-Food Canada, Government of Canada

Market Opportunity for Alberta Food Products

• “Food safety has become a key issue for regional consumers. There is an increasing demand for safe meat and food products.”
• Increasing awareness for environmentally sustainable food production. Naturally raised livestock, antibiotic and hormones free meat and healthy/natural, organic niche food and beverage products are gaining popularity.
• Hong Kong and China are good markets for underutilized meat products, e.g. trimmed items, offal.
• Consumers are quick to adopt the latest food trends, such as functional food products, green foods, organic foods, and items that promote health and wellness.
• Demand for high quality grain products, e.g. cereal, wild rice, flax seeds
• Mainland Chinese are coming to Hong Kong to taste and buy imported food products
• “Hong Kong’s wealthy, aging, and increasingly health-conscious population is demanding a wider selection of functional and healthy foods.”

Source: Exporting to Hong Kong, Agriculture and Agri-Food Canada, Government of Canada

Hong Kong Trend lines

• Internet shopping is gaining popularity in Hong Kong and younger consumers in particular are more willing to try new and innovative products from overseas. Companies that are willing to accommodate smaller orders will be able to meet this demand. There are companies owned by Canadians in Hong Kong providing both online and offline solutions to facilitate supplying this expanding market.
• In order to be more competitive, Hong Kong food intermediaries are trying to increase efficiency by reducing business processes and expenses. Distributors, wholesalers, large-size retail outlets, supermarket chains, and restaurant chain operators are looking to buy directly from suppliers. At the same time, Hong Kong food companies are expanding through horizontal and vertical integration to achieve economies of scale, particularly in the food services and distribution sectors. 

Alberta Products in Hong Kong Market

Beef

• There is continuing demand for Canadian beef in Hong Kong. The popularity of “hot pot” cuisine in the region has created a strong demand for hot pot beef. Bone-in beef rib products fit well with the Chinese cuisine.
• The export and import business of Canadian beef is stable and mature. Local importers focuses on both chilled and frozen beef for food service market. Some operate their own retail stores as well.
• Retail: local supermarket chains and consignment counters in selected retail outlets.
• Food Service: restaurants, hotels, fast food chains

Pork

• Alberta pork (chilled and frozen) is available at local supermarkets, restaurants and food service market, via direct shipment to retailers and local importers.

Canola Oil

• Alberta canola oil is available in local food service market via private labelling.

Cold-Mill Flaxseeds

• Available in Hong Kong through local distributors.

Organic dried pasta, cereal, honey

• Available at local retailers through a consolidator in BC

Pet Food

• Available in Hong Kong through local distributor.

Source: Exporting to Hong Kong, Agriculture and Agri-Food Canada, Government of Canada