Hong Kong is a paradise for startups. The huge market, potential to expand into Mainland China and Government support, make the market ready for you. The number of startups seeking to relocate to Hong Kong rose with 46% between 2014 and 2015. Despite this, the highly competitive environment has never been easy for startups.
When opening a startup in Hong Kong, you need the right strategy. In this post, we explore the most helpful tips for investors relocating to Hong Kong.
Carry business based market research
Market research is the bedrock of any successful business. In Hong Kong, the role of market research is even more critical. By conducting comprehensive market research, a new investor is sure of understanding the following things and doing them right.
- The competitors in the market and what to anticipate: Through competitor analysis, an investor is able to understand the nature of the market to use the right entry method. For example, if you are in FinTech, understanding other firms and how they work will be very crucial. You can learn the financial institutions they have partnered with and target where they have not reached. You might also target the same clients with better products.
- The customer behavior in Hong Kong: The customer behavior of a targeted niche is very important. Through comprehensive research, you can establish what and how clients want to be served. Then, you can reposition the business to deliver the right product in the best way.
- The size of the target market: Knowing the size of the target market is very important because it helps a startup align its strategy with realistic objectives. By comprehensively carrying your market research, it is possible to get it right from the beginning.
Be patient when reaching clients especially during start up
No matter the way you look at it, establishing a brand in a new land will require time. Well, people do not know you, and even the few who do are still not very clear what is on offer. Therefore, their skepticism is right, and you must be patient with the marketing strategy. If you send more than 500 emails but only get five replies, it is not the time to get disappointed.
To win a bigger audience, your focus should be taking the message to the target client and consolidating the base before focusing on conversion. One of the best ways of doing this is working on various campaigns such as social media efforts, participating in exhibitions, and working with partners. With patience, your efforts will start bearing results.
Identify a trusted mentor for progressive inspiration
The entry of startups into a new market is always full of ups and downs. In Hong Kong, these challenges can range from network issues to regulatory frameworks.
Other challenges will also spring along the way and demand extra creativity. You cannot succeed in the Hong Kong environment without a trusted mentor for inspiration. This can be a close person, other institutions, or a legal expert. This should be the person who helps you understand the situation the way it is and come up with workable solutions.
Developing a helpful personal network
Working on a network is perhaps one of the most important things for gaining ground faster after entering Hong Kong. Though there are numerous competitors fighting for the same space, getting the right network will strengthen the brand and reach more clients.
For example, if your company is dealing with fashion clothes, partnering with related companies will strengthen the brand presence in Hong Kong. You can partner with airlines, film companies, and hospitability firms to reach clients in their niches. This will take your brand to a larger audience and raise the chances of success.
The network you create should target reaching a larger segment, helping to establish, and settle as fast as possible. Do not consider the network too formal; the focus is ensuring to build the network first, riding on it, learning about the people and drawing lessons for your growth.
Understand the Hong Kong culture
Unlike in the West, Hong Kong is strongly influenced by people’s culture. Think it this way; Jet Li is from China, but Jackie Chan hails from Hong Kong. People want to associate with their culture a lot in terms of foods, actions, associations, and even shopping habits.
Now, your business must reflect this change by ensuring that you understand and act like them as much as possible. Learn Cantonese and Mandarin to communicate with the locals and take your business ideologies at all levels.
This is important because you will need the locals to buy your products while still networking with multinationals. However, this should not come as a big issue when you have several Hong Kong residents to teach you a few words and other elements of their culture.
Appreciate the high cost of living and prepare appropriately
When you decide to go to Hong Kong, it is important to be prepared for the high cost of living. Houses, especially in downtown Hong Kong, are inflated like in San Francisco and London. This can be a big issue for businesses because the costs might make it difficult to operate especially when running on limited resources.
The best thing is getting creative. Think of looking for co-working space in order to save cash and concentrate on business. If your business does not require operating from downtown Hong Kong, you could get a large House and convert part of it into a business unit. For example, startups in mobile applications could operate from your home office as far as there is a fast and reliable internet. Then, you can shift to downtown Hong Kong after getting enough clients and revenue flow.
Having an appropriate digital platform
Most of the Hong Kong is very advanced and so are is the target audience. Most of the people you are targeting are likely to discover your product through the main website and other digital platforms. It is, therefore, very important to have an appropriate digital platform especially a good website that a business can pitch all operations. This means working with a tech team to ensure that your website is fast and has the best content.
Recently, Google pointed that over 50% of all searches came from handheld devices. This means that making your website mobile optimized will help to reach an even bigger audience. Besides, your website should be well integrated with appropriate marketing platforms including social media for easier communication with your client base. Make sure that the website stands out from others in terms of content, graphics and themastic appeal.
Gret the right legal support for the system
Now that you have started or you are about to start operations in Hong Kong, you need the right legal framework. In Hong Kong, everything is very straighht forward in terms of banking, administrative, and legal applications. To operate well and get the reults you anticipate, it is advisable to avoid getting into conflict with the law. You can do this in several ways;
- Look for a separete legal entity that can help to protect the main business. For example you cn start a special purpose vehicle to hold the company assets as opposed to leaving the main company too exposed.
- Make sure to have a shareholders’ agreement because it helps to flesh out the main issues relating to business ownership and operations.
- Register a trademark in Hong Kong to protect interlectual property. This will force other investors who want to use the same inventions to come to you for a business deal as opposed to stealing.
Get it right on taxes in Hong Kong
In Hong Kong, taxes are given a lot of weight. You must get it right from the beginning. Once you have registered a company, it is important to work closely with the company secretary and an expert in tax matters. This will help you to put up a robust account system so that filing of returns will be easy, fast, cheap, and more convenient.
The best thing is ensuring that the books are audited on a quarterly basis so that the final books of accounts are easy to work on. You should also stay in touch with IRD (internal revenue department) for updates and advise on issues that might require your input.
When shifting to Hong Kong, the most important things are to understand the operational environment and employing every effort to win a bigger market share. The focus should be informing the target audience that you are there and keep growing through appropriate strategies. To appropriately use these tips and achieve more, make sure to contact us for help in Hong Kong.