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SALES AND REPRESENTATIVE LOCATION HONG KONG, SVR

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1 SALES AND REPRESENTATIVE SEARCH HONG KONG, SVR

2 Hong Kong, SVR (January 2014) Showcase for mainland China Hong Kong (gtai) - Shopping malls are part of Hong Kong like the port. Traditionally, the Special Administrative Region was primarily a hub for goods from and to China. Today, retail is also an important pillar of the economy. More and more tourists, especially from mainland China, are coming to Hong Kong. These have numerous companies in their sights, because the metropolis also serves as a showroom for supraregional markets. Many operate with local agents whose care is important. Wholesale and Retail The Hong Kong Special Administrative Region (SAR) is one of the most developed retail hubs in the world. Retail sales have exploded in recent years, driven by the increasing number of tourists to buy. Compared to the previous year, sales in 2013 amounted to US $ 63.4 billion, around 11% more; in 2012 the increase was 10%. But not only the visitors, but also the inhabitants of the port metropolis are enthusiastic consumers. Shopping is a popular pastime. Supported by consistently high incomes and a low unemployment rate (end of 2013: 3.2%), they therefore ensure robust domestic consumption. According to the Hong Kong Retail Management Association (HKRMA), around 9% of the workforce and around 4% of the gross domestic product in Hong Kong are accounted for by the roughly 9,000 retail establishments. This has made the sector one of the most important pillars of the Hong Kong economy. Development of retail trade *) Sales (in million US $) Increase (in%) 24.9 9.8 11.0 *) The exchange rate of the Hong Kong dollar is linked to the US dollar and averages 1 US $ = HK $ 7.8. Source: Census and Statistics Department Since the individual travel options for visitors from mainland China were heavily liberalized in 2003, they have been happy to come to the SVR. In 2013 around three quarters of the almost 54 million visitors came from the mainland. They often traveled in groups, but also increasingly individually or came as day tourists from the neighboring province of Guangdong. Total tourist spending rose in the first half of 2013 by 17.6% to US $ 20.5 billion. The Hong Kong government expects the number of visitors to increase to 70 million per year by 2017, so there is still plenty of room for increased sales. High-quality consumer goods from Western brands are particularly popular. On the other hand, the rapid growth of the past decade will not continue forever, more and more Chinese are using travel options overseas to buy goods locally. So far, Hong Kong's retail trade has benefited in particular from high VAT and luxury taxes on the Chinese mainland as well as a lack of confidence in the product quality there. These factors are likely to diminish in the medium term. 1 Sales and agent search

3 Hong Kong, SVR (January 2014) The tourists distorted sales in the shops. Watches and jewelry are very popular as valuable but light souvenirs. The corresponding sales exploded in 2013 compared to the same period of the previous year by 23%, and took up almost a quarter of the total sales. Sales of clothing and shoes also rose sharply, by 8.3%, and are the second largest category at US $ 8.1 billion. In contrast, spending on cars, for example, only increased by 1.2%, while furniture sales fell by 2.1%. Both product categories are usually not purchased by travelers. Optical goods, pharmaceuticals and cosmetics are gaining in importance. The latter are mainly bought by mainland Chinese tourists in Hong Kong, on the one hand due to the comparatively lower prices and the more diverse selection. The mainland Chinese prefer to buy health-related goods such as medicines and baby products in Hong Kong and overseas rather than at home. This has reached such proportions that the Hong Kong government introduced an export restriction on baby milk powder of two doses per person in 2013 in order to ensure the supply of the local population. This process was unique for the free trade port. Development of retail sales (in million US $, change compared to the same period of the previous year in%) Category Change in jewelry and watches, 9 clothing and shoes, 3 supermarkets, 8 pharmaceuticals and cosmetics, 9 consumer electronics, 6 food and, 5 beverages *) cars, 2 furniture and furnishings, 1 optical goods, 2 other, 4 total, 0 *) excluding supermarkets. Source: Census and Statistics Department One of the major obstacles to starting a business in Hong Kong is high rents. In prime locations, retail rents are considered to be the highest in the world. According to the real estate service providers at CBRE, around US $ rent per square meter was due per year in Causeway Bay (New York: US $). The next most expensive locations are Queen s Road in the Central Business District and Canton Road in Tsim Sha Tsui. As a result, only large international brand manufacturers and, above all, luxury and jewelry stores can survive in the top locations. Nevertheless, many brand manufacturers have found their way to Hong Kong in recent years and are particularly successful in the high-quality consumer goods sector. Whether jewelry from Wellendorf, Alno kitchens, Miele appliances, Metz televisions or bathroom fittings from Dornbracht - all of them expect a lot from the high income and the developed consumer taste. 2 Sales and agent search

4 According to CBRE, 51 new retail brands found their way to Hong Kong in 2012, more than in any other metropolis in Asia. In addition to local sales, Hong Kong also acts as a shop window. The almost 40 million Chinese tourists not only shop diligently, marketing experts also rely on the Hong Kong effect. A brand that has already established itself in the port metropolis is usually also a success on the mainland Chinese market. Together with Tokyo, Seoul and Taipei, the trends for East Asia are set here. The retail trade in Hong Kong is dominated by large conglomerates, in the food sector mainly by Dairy Farm and A.S. Watson. This makes access more difficult for new entrants, even international retail giants like Walmart have already failed here. Most recently, in December 2013, the Asia CEO of the world's largest retailer again refused entry into the Hong Kong market in an interview with the South China Morning Post because it was too competitive. There are still numerous small shops, around 97% of all shops have fewer than ten employees. The large groups, however, have an increasing market share, partly because they get the best locations at good rents through close connections with real estate developers. Dairy Farm is part of the Jardines Group and is a leading retailer throughout Asia, with 2012 sales of over US $ 11 billion and just under employees. In Hong Kong, Dairy Farm is the leading grocery retailer with Wellcome supermarkets (270 branches), ThreeSixty luxury supermarkets, Oliver s The Delicatessen and Jasons MarketPlace, as well as the Mannings chain in the drugstore sector. There are also the convenience stores 7-Eleven and the IKEA branches in Hong Kong. The group also owns a 50% stake in Maxim s, a popular restaurant chain. Zung Fu, the authorized dealer for Mercedes-Benz franchises and Hyundai, and 50% of the Jardine Schindler joint venture for elevators are also assigned to Jardines. Another of the largest groups is the A.S. Watson Group (HK) Limited (ASW). She is part of the Hutchison Whampoa Group, which in turn belongs to Li Kashing, the richest man in Asia. The group describes itself as the world's largest retailer for health and beauty products (among other things, it owns 40% of Rossmann) with a total of over employees. In Hong Kong, the ParknShop supermarket group is particularly visible, which operates under the Great, Gourmet, Taste, Fusion, International and ParknShop Superstores stores. In addition, Watson has the Fortress electronics chain as well as Watsons brand drugstores, Watson's Wine, duty free shops and the new SU-PA-DE-PA concept, a combination of supermarket and department store. Leading supermarket groups Retail group Sales 2012 (in million US $) Supermarkets (number) Hypermarkets (number) Market share (in%) ParknShop Wellcome *), 8 Vanguard Shop 657 *), 8 Dah Chong Hong (DCH) N / A FoodMart Jusco stores (HK) N / A City Super N / A 4 0 N / A *) Estimates. Sources: Annual reports, Hong Kong Business Germany Trade & Invest 3

5 Hong Kong, SVR (January 2014) Direct mail order or delicatessen shops offer additional sales channels for high-quality food. These include, for example, the stores of Pacific Gourmet, Euro Treat, Health Naturally or Euro Goodies. Movement is currently visible in the segment of natural and organic foods. While Dairy Farm has closed its ThreeSixty store in the Landmark in Central, rumor has it that ParknShop will open a specialty organic store in early 2014. The German Chamber of Commerce Abroad (AHK) Hong Kong sees great potential for German food with organic seals and in general in the health sector. The high incomes and extensive dependence on imports lead to a high appreciation of food safety in Hong Kong's middle class. Germany has great confidence in terms of quality, safety and nature conservation. According to the AHK Hong Kong, foods that target these niches generally have good prospects. Various Japanese retailers have their chains in Hong Kong, for example the Jusco Group operates various shops for everyday goods under the Aeon brand, including five supermarkets, nine department stores and 23 Living Plaza markets. The Uny Group also operates department stores under the Uny, Apita and Piago brands. For housewares and other non-food products, Japan Home Center and Pricemart are ubiquitous. The large department stores Wing On and Sogo mainly sell non-food, but also have supermarket sections. There are also convenience stores, primarily from the two chains 7-Eleven and Circle K. While Vanguard from China Resources, one of the largest supermarket operators in mainland China, mainly targets local customers, a significant proportion of the products do not come from China. Da Chong Hong, with its DCH Food Marts stores, is strong in meat, fish and fresh vegetables, often close to fresh markets. The company is also one of the major food importers to Hong Kong, along with Four Seas Food Investment, EDO Trading, Kwan Hong Yuen Trading, Yu Kee Trading, and Sun Shun Fuk. But German food importers are also active, for example Hartmut Ganter from World Winner Promotion, especially for the ParknShop markets. In general, the ParknShop stores are the most promising for German providers, as they offer the largest platform for customers who are oriented towards Western products. Supermarkets regularly charge a shelf fee for new products, which is reportedly negotiable. In addition, many large shopping malls attract wealthy customers to their stores. Depending on the location and orientation, different target groups can be reached. Some of the centers have extremely high rents because they are among the locations with the highest turnover. Therefore, there are mostly only major international brands to be found there. However, the mall operators are always interested in new brands in order to obtain an attractive product mix. For example, new concepts and products can be tested in open spaces with pop-up shops, and if they are successful, a fixed retail space will beckon. Rumor has it that various brand manufacturers are in certain locations for prestige and marketing reasons and do not necessarily expect profitability. 4 Sales and agent search

6 High-priced brands in fashion, watches and jewelry Medium-priced brands in fashion, accessories and cosmetics International, medium-priced brands in fashion, accessories and cosmetics Germany Trade & Invest 5

7 Hong Kong, SVR (January 2014) Main shopping malls (cont.) Mall location Exhibition space (in square feet) New Town Plaza Shatin Sources: Cushman Wakefield, shopping malls website Customer profile Younger, local customers and Chinese tourists City Gate Tung Chung Broad customer base of local customers Customers up to foreign tourists Brand assortment Various brands for the mass market and premium and luxury market in the field of fashion, watches and jewelry, electronics and cosmetics Fashion outlet; Various brands for the mass market, premium and luxury market in the field of fashion, watches and jewelry, electronics and cosmetics. Beauty salons and spas are special in the field of cosmetics. They are widespread in Hong Kong and customers sometimes leave large amounts for treatments. They offer a good sales channel, as they often rely on high-quality products and, in addition to applications, also sell to end customers. The landscape is relatively confusing, the statistics office showed make-up, skin and face care services at the end of 2012; Bella, Let s Spa, Sense Of Touch or Happy Feet, for example, have several branches. There are also the drugstore chains Mannings and Watsons for everyday personal hygiene. The perfumeries Sasa (around 100 branches) and Bonjour (around 50 branches) reach most consumers in the middle price segment. Promotion campaigns are often carried out in stores, especially on weekends and holidays. The campaigns have two functions: on the one hand, they serve as a test of whether a product is popular and whether it is included in the range. On the other hand, they offer variety for customers. These are to be lured into the markets through campaigns, shopping is celebrated as an experience. The ParknShop chain organizes regular country weeks, such as the German Food Festival for the popular Oktoberfest in Hong Kong. New products can be tested on the market here, but ParknShop charges some fees for this, German weeks should take place at the beginning of April, interested companies can contact Nils Buddemeier, Commercial Manager, International Products at ParknShop (see contact addresses). 6 Sales and agent search

8 Sales agents and authorized dealers Tips for searching for sales agents Local characteristics Hong Kong plays an important role as a service center in Asia and many companies use the location for supraregional sales activities. The city's advantages are that it has a very business-friendly environment where it is easy to start a business. The location also offers low taxes and duties as well as an excellent infrastructure for logistics and business trips. There are more than enough sales representatives in the metropolis, the challenge is to find the right one. Various trading companies and agents have a supraregional focus and also offer sales in mainland China. Traditional German houses that have long specialized in such services are Jebsen, Melchers and the Schmidt Group, as well as DKSH of Swiss origin. These are active in both the consumer goods sector and industrial sectors. In addition, there are numerous specialized sales representatives in Hong Kong who can be found at trade fairs, through industry associations and service providers as well as consulting companies. The AHK Hong Kong (offers the search for a commercial agent and helps with the selection. In addition, in the export community of the foreign trade portal ixpos (search advertisements for commercial agents can be posted free of charge, agents can be researched or their own services offered as commercial agents Stefan Kracht, managing director of the consulting firm Fiducia Management Consultants, which primarily specializes in German customers, advises selecting representatives for the Hong Kong market and for China separately, as the markets are sometimes very different. According to Kracht, it is important to have an experienced representative either with the respective product group or the segment. Successful sales of complementary products are a good starting point. Different representatives can be selected for different product groups. For example, Metz The distribution of the TV sets was transferred to Schmidt Marketing, while the flash units were represented by Jebsen Consumer. Some companies already have a candidate in mind, for example through acquaintances or a visit to a trade fair. But the good feeling can only be the starting point: From there, a structured selection process should begin, which must be continued with an appropriate legal framework. This forms a solid basis to develop the representative in a targeted manner and to lead the business to success. Therefore, Fiducia advises to approach two to three potential representatives in the first step in order to enable a comparison. Basically, German companies have to choose between a startup or an established agent, whereby both options have advantages and disadvantages. In this regard, Kracht recommends applying tried and tested guidelines from home or from other countries. Germany Trade & Invest 7

9 Hong Kong, SVR (January 2014) In the second step, a due diligence of the potential representative should be carried out and the references and history of the company should be thoroughly checked to avoid unpleasant surprises.However, since these cannot be ruled out, a solid legal basis must be created in the third step, which at the same time offers a certain flexibility. Depending on the satisfaction and possibilities of the representative, leeway can be expanded or even reduced. Representatives regularly want exclusive rights, something German companies shy away from. Hong Kong is not a big market, so leaving it can make sense. However, the contracts must contain appropriate options for separating business relationships if expectations are not met. Managing sales representatives Successful selection and contract conclusion are again only an intermediate step, says Stefan Kracht. This is followed by the introduction and training of the representative. Basically, companies have to decide, do I want someone to whom I have to teach everything, but who is perhaps more loyal to the company, or someone who already has experience with comparable products? In any case, you have to invest in the loyalty of the representative to the product or the company. Training courses for the product contribute to this, especially in the development phase, which is essential for capital goods. But extended stays at the main plant can also be conducive to understanding the product and the corporate culture. In return, regular on-site visits should be used to exercise control and, in particular, to develop the relationship with the sales representative. This is part of the motivation package that needs to be put together in order to avoid sluggish sales activity or the dropping out of the representative. In addition, there are usually commissions for sales (depending on the product around 5 to 25%) and, in some cases, a takeover of the marketing budget. The division of the general brand structure and general marketing is handled differently by companies, but is often adopted by the German company. Experienced sales representatives can give valuable advice here on how this can be done successfully in Hong Kong. In the SVR, sales representatives usually act very professionally. The port city has a reputation as a hub for services that enable business with Asian and, above all, Chinese partners. However, many companies underestimate the care needs of a representative. Often the motto is out of sight, out of mind. Anyone who is then confronted with sluggish sales need not be surprised. Regular contact is essential. German products are often located in high-priced segments and convince with functionality and durability that are not immediately apparent. Therefore, more time has to be invested in explaining things to the customer. Hong Kong representatives need some training in this area so that the right product is sold to the customer and not just a major deal. Charlie Lang, Managing Partner of Progress-U, has also observed this phenomenon, which is widespread in Asia, in Hong Kong. The strong focus on closing figures could become a problem, many local companies work with high sales pressure, according to Charlie Lang. However, this can produce dissatisfied customers and endanger sustainable success. 8 Sales and agent search

10 Kracht advises to limit the contract with the option of renewal and to link certain turnover thresholds with rewards. An important part of the contractual regulations is also transparency. The German company should stipulate clear inspection rights, especially with regard to fixed prices, invoicing and bookkeeping, so that a better understanding of local sales is created and control is also possible. This includes quantities, sales channels, point of sales, customer groups, promotions and their success. In the long term, many companies are toying with the idea of ​​taking over the sales themselves, should the product prove to be marketable. Kracht advises addressing this early on. For example, German clients opt for taking over the business from the agent via integration into a subsidiary. Such a long-term approach is valued in Chinese business culture and therefore need not be concealed. Commercial Agency Law Hong Kong's Commercial Agency Law is not codified. It is based on the until the adoption of the EC directive on commercial agency law at the English Law of Agency. The general principles of representative law, combined with the case law developed for commercial representation, are decisive. Types of sales partners Commercial agents or contract or proprietary dealers come into consideration as sales partners. Commercial agent is someone who arranges business for another entrepreneur and concludes it in the name and for the account of the entrepreneur. The distributor or dealer, on the other hand, conducts business in his own name and for his own account. A typical characteristic of the commercial agent is working for a third party. An entrepreneur (so-called principal) concludes a contract with the commercial agent, in which both agree that the commercial agent provides the entrepreneur with customers and sells goods in the name and for the account of the entrepreneur. Contractual partner of the buyer is not the commercial agent, but directly the principal. Commercial agent contract conclusion In principle, the parties are free to choose which law they declare to be applicable to the commercial agent contract. Since Hong Kong law gives the contracting parties greater leeway and the protection of the commercial agent in particular is much weaker than is the case under German law, the entrepreneur should regularly resort to Hong Kong law. When drafting contracts with commercial agents in Hong Kong, the principle of freedom of contract prevails as far as possible. It should be noted that there are no mandatory standards such as those in German commercial agency law; At most - depending on the need for regulation - the legal principles developed by case law (e.g. duty of care, duty of obedience, Germany Trade & Invest 9

11 Hong Kong, SVR (January 2014) Loyalty Duty). There are no special formal requirements to be observed when concluding the commercial agency contract. The commercial agency contract can be concluded in writing or orally; For reasons of evidence, a written contract is preferable. The commercial agency contract should regulate the following as a minimum: - the scope of the power of representation; - the territorial competence of the representative; - whether an exclusivity and in what form it is granted; - if necessary, territorial protection; - the conditions of sale to end customers; - whether the representative is authorized to conclude or just mediate business; - Notice periods and dates, termination without notice for an important reason, list of important reasons as well as the - regulation of remuneration. Rights and obligations of the contracting parties Based on the legal principles developed by the case law in England and Hong Kong, certain rights and obligations arise for both the entrepreneur and the commercial agent. The most important duties of the commercial agent are to be accountable to the principal and to surrender any financial advantage, to follow the principal's instructions and not to exceed the power of representation granted to him. The rights and obligations of the commercial agent towards third parties, however, depend primarily on the execution of the commercial agency contract. In contrast, the entrepreneur has general information and due diligence obligations, as well as the regular obligation to provide appropriate remuneration. Unlike German law, Hong Kong law does not have a statutory right to commission. According to the Law of Agency, the commercial agent can only claim commission if this has been contractually agreed. A tacit agreement is often assumed by the case law, i.e. it is assumed that a commission claim of the commercial agent has been agreed, unless there is a contrary contractual provision. However, the existence of a commission claim is problematic if customers order goods after the commercial agency contract has ended. In this case, the commercial agent is generally not entitled to remuneration, even if the contracts concluded after the conclusion of the contract can clearly be traced back to the agent's mediation before the end of the contract. In some cases, the case law tries to come to a different conclusion on the interpretation of contracts. In the case of repeat orders, i.e. if it has been contractually agreed that the commercial agent receives commission as long as the contractual relationship with the brokered customer exists, the commercial agent is undisputedly entitled to commission, even if the commercial agency contract has been terminated in the meantime. 10 Sales and Agent Search

12 Legal compensation and compensation claims of the representative in the event of early termination of the contract in accordance with German law (89b HGB) are not recognized by Hong Kong law. Contract termination Similar to German law, the contractual relationship can be terminated by notice of termination, upon expiry of the agreed term, by death, bankruptcy or incapacity of one of the contracting parties. If a certain period is neither expressly nor tacitly provided, the contractual relationship can be terminated by either party at any time and with immediate effect. However, the case law, taking into account the interests of the parties and the commercial practice, tends to grant the commercial agent a reasonable period of time. If this is not complied with, there is a risk that the termination will be qualified as a breach of contract and will result in an obligation to pay damages. Authorized dealer / distributor The authorized dealer, usually referred to as a distributor or dealer, buys and sells on his own account. The general importer or distributor usually buys a wide range of comparable goods; in this case he usually bears the costs for storage and further marketing expenses. In general, a framework agreement is concluded between the authorized dealer and the manufacturer. The authorized dealer may not be entitled to commission, but the parties can agree, for example, that the proprietary dealer should be exclusively authorized to sell the products (so-called exclusive sales agreement). The parties can also agree that the dealer is obliged to regularly purchase a certain amount of goods and that the entrepreneur must always make this amount of goods available. This must be distinguished from the contractual relationship between the authorized dealer and his buyer, which, as a sales contract, is subject to the Sale of Goods Ordinance and the principles of common law. Representation Opening a representative office is the easiest and cheapest way for foreign companies to gain a presence in Hong Kong. The business purpose of foreign representative offices is limited to information gathering, market research and maintenance of contacts, advertising, procurement (product sourcing) and control activities. Activities going beyond this, such as the conclusion of contracts, participation in tenders, import and export are not permitted. Since the representative office is not allowed to carry out any profit-generating activities, it is exempt from taxation. A representative office is neither a legal person nor a branch in the legal sense. The parent company is fully liable for the obligations entered into by the representative office. Therefore, there is no obligation to equip the representative office with a minimum capital. Germany Trade & Invest 11

13 Hong Kong, SVR (January 2014) Establishing a representative office requires the acquisition of the Business Registration Certificate through registration with the Inland Revenue Department. Since then, the cost of this has been HK $ 250 for a one-year certificate. The AHK Hong Kong can provide support in setting up a representative office. Exhibition business Hong Kong remains one of the most important exhibition locations in Asia. The hub for the Asian trade is home to events with a supraregional reputation in some industries. The good infrastructure, professional organization and excellent international travel connections make the city an attractive venue. While the major trade fairs in the industrial goods sector are to be found in mainland China, there are still important exhibitions in Hong Kong, especially for the consumer goods sector. These include three jewelery / jewelry and watch fairs (spring and autumn of the Hong Kong Jewelery and Gem Fair and the Hong Kong International Jewelery Show), trade fairs from the textile sector such as leather, fur and fabric fairs, the Cosmoprof for cosmetics and fairs for food and (alcoholic) beverages. In addition, topics such as electronics, lighting as well as toys, gifts and furnishings bring important events to Hong Kong through the production centers in the nearby Pearl River Delta. The most important organizer is the Trade Development Council. There are two event venues: the centrally located and attractively designed Hong Kong Convention and Exhibition Center with a total of over square meters and the Asia World Expo, located directly next to the airport, with over square meters. One problem with the latter is its location away from the city, as comparatively fewer visitors find their way into the halls. The exhibition and trade fair committee of the German economy offers an overview of the most important international trade fairs. Information about the foreign trade fair programs of the federal and state governments can also be obtained here (contact address: Hong Kong Trade Development Council (HKTDC) 38 / F, Office Tower, Convention Plaza 1 Harbor Road, Wanchai, Hong Kong Tel .: 00852 /; Fax: Internet: Trade fairs: Exhibition and trade fair committee of the German economy ev (AUMA) Littenstrasse 9, Berlin Postfach, Berlin Tel .: 030 /, Fax: Internet: 12 Sales and sales representative search

14 Franchising Franchising first reached Hong Kong through American fast food chains and later Japanese restaurants. The Hong Kong environment is poorly regulated, which is positive for the development of the sector. On the other hand, there is no registration requirement and therefore no official statistics on the number of franchising companies are available. The Hong Kong Franchising Association (HKFA) was established within the Hong Kong General Chamber of Commerce in 1992. It has an overview of currently 75 franchisers on its website. Over the years the number of franchise chains has changed and has fallen sharply since a high of 124 at the end of 1999. According to the HKFA, 43% of the franchisors were in the restaurant business, 37% were active in the service sector, 20% in retail and around 56% were domestic franchisors. In addition to McDonalds and KFC, Japanese noodle soup restaurants, the convenience stores 7-Eleven and Circle K and private educational institutions are the most important franchisors. E-Commerce E-commerce is becoming increasingly important as a sales channel in the Greater China area. Sales in Hong Kong itself are not huge, the infrastructure is too well developed and nobody lives far from a shopping center. In a survey of residents, the Census and Statistics Department found that between 2002 and 2012 the rate of those who made purchases or booked something online in the past 12 months rose from 4.9 to 24.4%. Of these, 30% had shopped clothes, and around 10% each bought gifts, electronics and printed matter online. There are three reasons for an online presence: First of all, websites are an important information medium for potential customers, so in the consumer goods sector no brand can actually exist without a website. This also applies in Hong Kong, especially since the advice in the shops leaves a lot to be desired. The website should at least be in English, but preferably in Chinese. In Hong Kong, however, unlike in mainland China, traditional traditional characters are preferred. Second, online shops for niche products are a sales channel to reach the comparatively limited target group. Certain health products, organic or natural foods and baby products are sold in online shops. For example, the Munich-based company Theresa, which specializes in the sale of luxury fashion, has been active in Hong Kong with an online shop (Mytheresa.com) since mid-2013. Recently, e-commerce is developing rapidly in mainland China, and Hong Kong web shops are enjoying growing order numbers from cities across China. Even if the products are available in local stores, Hong Kong distributors are accorded a higher leap of faith. So far, tourists have mainly come to the former British colony physically to shop, but the trend is now continuing on the Internet. This is particularly important in the areas of premium brands, food and personal care products. Germany Trade & Invest 13

15 Hong Kong, SVR (January 2014) Few German brands have so far had a Hong Kong-specific online presence. The automobile manufacturers Audi, BMW, Mercedes, Volkswagen and Porsche use this to maintain customer loyalty.In the case of the camera manufacturer Leica, Schmidt Marketing presents products and workshops. The website for Alno kitchens is maintained by the representative SHEW and Kärcher itself offers product comparisons and service. Jebsen goes one step further and maintains an online shop for represented brands, contact addresses German Industry and Commerce Ltd. Wolfgang Ehmann 3601 Tower One, Lippo Center, 89 Queensway, Admiralty, Hong Kong Tel .: 00852 /; Fax: Internet: Hong Kong Retail Management Association (HKRMA) 10 / F., First Commercial Building, Leighton Road, Causeway Bay, Hong Kong Tel: 00852 /; Fax:; Internet: Schmidt Marketing (H.K.) Ltd. 13 / F, Chinachem Exchange Square, No.1 Hoi Wan Street, Quarry Bay, Hong Kong Tel: 00852 /; Internet: Jebsen & Co. Ltd. 28 / F, Caroline Center, 28 Yun Ping Road, Causeway Bay, Hong Kong Tel: 00852 /; Fax: Internet: Melchers Ltd Shun Tak Center West Tower, Connaught Road Central, Hong Kong Tel .: 00852 /; Fax: Internet: PARKnSHOP, A.S. Watson Retail (HK) Ltd Nils Buddemeier, Commercial Manager International Products Watson House, 1-5 Wo Liu Hang Road, Fo Tan, Hong Kong Tel: 00852 /; Fax: Internet: Sales and agent search

16 The Dairy Farm Company, Ltd Caroline Mak / Choo Peng Chee 5 / F Devon House, Taikoo Place 979 King s Road, Quarry Bay Tel .: 00852 /; Fax: Internet: Fiducia Management Consultants Stefan Kracht, Managing Director 160 Gloucester Road, Wanchai, Hong Kong Tel .: 00852 /; Internet: Progress-U Charlie Lang, Managing Partner Unit 8A, Amtel Building, Des Voeux Road, Central, Hong Kong Tel .: 00852 / Internet: Department for Trade Mark Registration Address: Intellectual Property Department, Trade Marks Registry, 24th and 25th Floors Wu Chung House, 213 Queen s Road East Wan Chai, Hong Kong Tel: 00852 /; Fax:; Internet: Department to Register Health Foods Containing Medicine Ingredients Department of Health, Pharmaceuticals Registration, Import & Export Control Section 18th Floor, Wu Chung House, 213 Queen s Road East, Wanchai, Hong Kong Tel: 00852 /; Fax: Internet: (H.G.) Germany Trade & Invest 15

17 Contact Imprint Publisher: Germany Trade and Invest Gesellschaft für Außenwirtschaft und Standortmarketing mbh Villemombler Strasse Bonn Tel .: +49 (0) 228 / Fax: +49 (0) 228 / Internet: Company headquarters: Friedrichstrasse 60, Berlin Management: Dr . Benno Bunse, First Managing Director Dr. Jürgen Friedrich, Managing Director Author: Achim Haug, Hong Kong Editor / Contact: Christina Otte, Tel .: +49 (0) 228 /, editorial deadline: January 2014 Order No .: All rights reserved. Reprint - even in part - only with prior express permission. Despite the greatest possible care, no liability for the content. Layout: Germany Trade & Invest Funded by the Federal Ministry for Economic Affairs and Energy on the basis of a resolution by the German Bundestag.

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