SOURCING OPERATIONS IN HONG KONG 1h Angelica Leung Head of Consumer Products

Transcription

1 1 SOURCING OPERATIONS IN HONG KONG 1h 2017 Angelica Leung Head of Consumer Products

2 2 BELT & ROAD Hong Kong: the Super-Connector between Mainland China and the world RUSSIA ITALY TURKEY Urumqi Beijing IRAQ Basra IRAN CHINA Xi an OMAN Khambhat INDIA BANGLADESH Quanzhou Guangzhou Hong Kong Silk Road Economic Belt 21st Century Maritime Road Arabian sea Kollam Bay of Bengal THAILAND South China sea Andaman sea KENYA SRI LANKA Banda Aceh Sources: China-US Focus, Xinhua Finance Agency Indian Ocean Belttung INDONESIA

3 3 CONNECT WITH THE 16,000-KM NATIONAL HIGH- SPEED RAIL NETWORK 1 HOUR LIVING CIRCLE BETWEEN HONG KONG PRD

4 4 POPULATION LAND AREA GREATER PEARL RIVER DELTA 68mn >UK, Italy, South Africa GDP 56,000km 2 <Ireland, Latvia, Panama, West Virginia (US) US$1,328bn >Indonesia, Netherlands, Turkey Source: CBRE Research Guangzhou Huizhou Zhaoqing Foshan Dongguan Jiangmen Zhongshan Zhuhai Shenzhen Hong Kong Macau

5 5 OVER 500 BUS ROUTES IN HONG KONG, PLUS MINI BUS, TRAM, FERRY, LIGHT RAIL Few people drive in Hong Kong Shopping is frequent, but limited in weight

6 TOURISTS ON AVERAGE SPEND US$1000 AND STAY 3.3 NIGHTS Hong Kong s Top Five Source Markets of Visitor Arrivals to Hong Kong in 2015 (millions) Mainland Taiwan South Korea USA Japan Source: Hong Kong Tourism Board

7 7 FROM 2010, SAME DAY VISITORS CONTRIBUTED TO OVERALL GROWTH OF MAINLAND TOURISTS TO HONG KONG. 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 Visitor Arrivals from Mainland China ,247,675 45,842,360 40,745,277 34,911,395 28,100,129 22,684,388 Same-day Overnight Total 10,000,000 5,000,000 - Source: Hong Kong Tourism Board

8 8 STABLE VISITOR BASE FROM MAJOR MARKETS SUCH AS THE AMERICAS, EUROPE AND ASIA. 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Visitor Arrivals by Selected Major Market Areas ,577,419 13,063,310 12,962,923 12,836,108 12,875,682 12,784,074 Macau SAR/ Not Identified Taiwan South & Southeast Asia North Asia Europe, Afica & the Middle East The Americas Total - Source: Hong Kong Tourism Board

9 SOCIAL MEDIA EAST MEETS WEST

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11 37% 11% 7% 20% 17% Corporate Income LOW & SIMPLE TAX SYSTEM 45% 0% VAT 16% 5% 5% 15% 20% 16.5% 25% 17% HONG KONG SINGAPORE SHANGHAI* Personal Income Employer Social Security Employee Social Security VAT * There is no standard rate across the Mainland China. Shanghai is used as an example. Hong Kong has signed Comprehensive Double Taxation Agreements (CDTAs) with 37 jurisdictions. VAT/GST/Sales tax Capital Gains Tax Withholding tax on investments Estate duty Global taxation Wine duty Negotiations with 13 jurisdictions are in progress. (as of Mar 2017)

12 12 SOURCING & BUYING OFFICE

13 13 CHINA + 5 main criteria for the ideal sourcing location : price, quality, capacity, speed, and risk Mainland China remains top sourcing destination, although factories moving away from coastal cities and into middle and Western regions. Mainland production moving towards high end and high tech large volume, high labor, low tech products moving to other locations such as Bangladesh, Sri Lanka, Indonesia, Cambodia Companies are becoming more proactive in corporate social responsibility initiatives and are also preparing contingency plans to be better prepared for the challenges

14 SOURCING OFFICE IN HONG KONG Sourcing trends: Rising costs and tightening labour markets and sustainability regulations lead to exploration of new sourcing destinations, Bangladesh, Vietnam, Cambodia, Indonesia and Africa have emerged Mainland China moving up value chain, but remains leading exporter, esp. in textiles, footwear and technically demanding products Asia not only seen as a sourcing destination, but also as a consumer market Complex sourcing activities from multiple countries generates saving opportunities, but at the same time greater regulatory compliance risks, tax issues and inventory management Managing cash and credit needs, regulation of cash flows across borders Hong Kong Solutions: Hong Kong offers easy access to Mainland and ASEAN locations. Politically and economically stable environment. Visa free access to over 140 locations for HKSAR travel document Many Mainland factories are owned by Hong Kong companies. Greater access to research and networking and possibility to negotiate contracts with suppliers. Regional teams can source and also explore market potential to sell products within Asia, develop products to suit Asian consumers Hong Kong lawyers, logistics providers and accountants have strong international networks and regional experience to provide advisory services Sophisticated financial services and payment systems available in HKD, RMB, USD and Euro. Free flow of capital for treasury functions

15 SOURCING OFFICES IN HONG KONG Company Sub-sector Country of Origin Aldi Supermarket Germany Coach Fashion US GAP Fashion US Hallmark Stationery and Toys US ICA Supermarket Sweden Kingfisher Home improvement UK Meijer Supermarket non foods US Metro Supermarket non foods Germany Morrison Supermarket non foods UK PUMA Fashion Germany / Kering Group Pet Smart Pet Supplies US Tesco Supermarket non foods UK WHSmith Stationery and Toys UK VF Fashion US