Hong Kong and Macau: A safe stepping stone into China?

Whenever we see with our own eyes something we’ve read about it becomes more real. No shock there. 

Having been back up in China over the past week, I have reinvested in my belief that Australia’s, and New Zealand’s, future prosperity is absolutely dependent upon small and medium business owners changing our behaviours with respect to China.

I have visited Hong Kong and Macau many times over many years, basing myself there for a month on occasions. My last trip last week brought home to me two things: just how many Chinese are now travelling and just how widely wealth is now being dispersed among normal day-to-day working Chinese. Not wealth as in very flash cars and expensive watches, but wealth as in being able to afford a Volkswagen car and internationally branded clothes. It’s much the same as an average Australian and New Zealander would earn. But whereas there are less than 30 million of us, there are probably now 200 million Chinese who will spend to the same level.

And that’s what brings the real benefit to small and medium Australian business owners. The opportunity is based on the fact that Chinese shoppers have moved from conspicuous consumption of international luxury brands, to normal day-to-day consumption of better quality, everyday foods, wines and clothes. Things that are grown, designed or sold by normal businesses here in Australia. But our issue is still that too few Australian companies are showing their wares to Chinese shoppers.

Hong Kong, a city that used to be full of European, American and Middle Eastern tourist shoppers, is now seeing mainland Chinese tourist shoppers outnumbering other visitors by 10 to one. In Macau, I would guess that 99% of visitors are mainland Chinese, who are gambling and shopping.

Why does this matter? Well sometimes it takes two steps to get where we want to be. 

Doing business directly into China may be a ​step too far, but finding retailers and wholesalers who sell product into Hong Kong and Macau might be a very good way to showcase your products to mainstream Chinese shoppers on holiday. Over time they will buy and take these products and brands back to the major cities in China and you will start to establish a brand. 

It’s a long term, five to 10 year, strategy that could help launch many current Australian brands into what will be the largest consumer market in the world.

Kevin Moore is a retail expert and the chairman of Crossmark Asia-Pacific Holdings.