Despite of the retrocession of Hong Kong to China on 1st July 1997, the Special Administrative Region of Hong Kong (HKSAR) has maintained its customs regulation. Thus, the territory of Hong Kong keeps its free port status and remains a customs area separate from the rest of China, preserving its participation in international bodies and its international trade agreements.
In conformity with the status of Free Port, Hong-Kong does not impose customs duty on entry of general goods in its territory. Only some goods are subjected to payment of the following duties: - Tobacco: tax calculated on the volume. - Spirits (alcohol 30%): 100% of the CIF value. - Wines: from 60% of the CIF value to 0% in 2008. - Beer: 30% of the CIF value - Petroleum products: tax calculated on both volume and value For further information visit the Customs website.
Hong-Kong applies the Harmonised Customs System.
When a cargo arrives at the port, even before the importer has taken possession, the products are inspected and occasionally sampled by the customs authorities. Once approved, the importer collects a “release” letter . It is to be noted that the importer should file an "import declaration" with the "Customs and Excise Department", within 14 days from the import.
An inscription on the product should specify if it is a free sample and that it cannot be sold. The samples can be distributed freely.
The purchase decision of Hong Kong consumers is determined by the price, quality, technical specifications of the product and after sales service. The consumers look for products of very good quality sold at a competitive price. The brands are chosen for their safety guarantee. English-speaking and open to Western culture, the people of Hong Kong do not have preference only for national products. In terms of marketing, the brands that are chosen from Asian fashion icons as well as Western celebrities.. It must however be noted that the expenses are strongly linked to the share market activity and the real-estate price. (35% of the household expenses are on housing)
Consumer Profile and Purchasing Power
People of Hong Kong are well informed consumers. They like innovative products which are generally in line with Korean and Japanese products. The consumers are concerned about their health and well being. As a proof, the nutritional supplements are very popular in Hong Kong. The average household income in Hong Kong is 15,500 HKD.
There are 2 distinct categories of consumers in Hong Kong : on one hand the local consumer, who are 6.5 million in number, and on the other hand tourists, lovers of luxury goods (tourism generates more than 10 billion USD of income each year). It is to be noted that the tourists coming for "shopping" are mainly Chinese from the Mainland. The Distribution network consists of several small and medium family type enterprises who tend to be grouped together. The large stores like Lane Crawford, Seibu or Sogo display an upscale image whereas the supermarkets and neighborhood stores as Wing on, Sincere and Jusco are more suitable for bulk products. The latter market being dominated by the duopoly - Park'n shop and Wellcome. Discount stores are also present in Hong Kong and are suited for products with low shelf life. Other neighborhood stores present extensively on the territory are 7/11 and Circle K, small stores with less range, for convenience and small volume purchases. These stores are open 24/24 hours. It is to be also noted that Manning`s and Watson are more sophisticated and positioned for hygiene, beauty, home care and baby products.
HK is one of the most important logistics centers of Asia. It is the first ranked airport in terms of freight and third largest container port in the world. Rapid growth has placed severe demands on these infrastructures, necessitating plans for major new investments over the next few years in transportation and shipping facilities. Significant elements include a planned expansion of container terminal facilities, additional roadway and railway networks. Hong Kong port is probably the first ranked container port of the world with 24 million of TEU (Twenty feet Equivalent Unit) handled. 245 million tons of goods have transited through Hong Kong each year. Its strategic position makes it the port of access to the Chinese market as well as an unavoidable transit point for international trade. Ship owners from Hong Kong control around 6% of the world's fleet. Hong Kong airport has handled 3.7 million tons of freight.
The industry contributes around 9% of the GDP. Textiles and electronic components industries are the most important. The electronics industry is also immature because of lack of governmental support contrary to Taiwan, Singapore and South Korea. But a revival of interest in high-tech activities in the present administration has begun. The authorities want to make HK the potential center for software and information technology industry.