Hong Kong is a gateway to China. Trading and logistics are one of the traditional core industries of the city. Moreover, it is a cost-effective location to get your products from. Various types of goods can be imported from Hong Kong, like machinery, raw materials, and a wide range of consumer goods. We are sharing top tips on sourcing from Hong Kong.
Sourcing from Hong Kong – top tips for importers
What to source?
Hong Kong is a major sourcing hub due to its close proximity to low-cost quality products. Furthermore, the customs procedures are as simplified as possible for goods moved both ways – in and out of Hong Kong. The choice of what to source is yours. For example, Hong Kong is the 5th biggest exporter of telephones (including smartphones) and the 2nd largest exporter of gold in the world. The top categories of products sourced from Hong Kong are:
- electrical machinery and equipment and parts thereof (integrated circuits, telephones)
- machinery and mechanical appliances; parts thereof (laptops)
- natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal and articles thereof (gold, diamonds)
- optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof
- plastics and articles thereof
- clocks, watches, and parts thereof
- essential oils and resinoids; perfumery, cosmetic or toilet preparations
- toys, games, and sports requisites; parts and accessories thereof
- articles of apparel and clothing accessories.
Now we know what popular form Hong Kong is. But are there any goods we should avoid? In fact, there are. To avoid issues of legal background, we should not source products we do not have the license to sell, such as branded goods. Another category of goods to avoid is seasonal products. Those products have a short life cycle, meaning they do not sell well long-term. If you miss the peak season, you may be left with a warehouse full of useless stuff. Even if the trend comes back, your products may look outdated, meaning they are of no value to consumers. You must research market trends in advance.
How to find suppliers in Hong Kong?
Both English and Chinese are the official languages in Hong Kong, so it is easier to communicate with suppliers in Hong Kong. You can get in touch with them via online channels, during trade fairs, and on-site.
- Many suppliers, manufacturers, and trading companies are active on e-commerce platforms. One of the biggest Hong Kong online marketplaces is HKTDC sourcing.
- The Hong Kong Trade Development Council (HKTDC) organizes a series of one of the most important industry events in Hong Kong.
- It is always a good idea to visit your supplier/manufacturer in Hong Kong. Attending business meetings is a great way of expanding guanxi, a relationship network in the Chinese world. Good guanxi means better opportunities and offers.
Reliable suppliers in Hong Kong
How to make sure that the chosen Hong Kong supplier is trustworthy? A professional-looking website proves nothing. Having a look at a business license is not enough – it may be expired or even fake. You must have due diligence conducted. The credit report will provide essential information on the company’s activity scope, export/import license, bank account owner, and more. You can get the report on the chosen company in 48 hours. Our experts will assess the risk so it will be easier to make the decision.
Quality control in Hong Kong
You have chosen your supplier and placed your order. The next step is performing quality checks. This protective measure is not expensive compared to losses resulting from potential returns, product recalls, and damaged reputation. You can carry out quality controls at various stages:
- before production (is the factory ready for your order?)
- during production (is the product turning out as you expected?)
- before shipping (do the products comply with your order?)
- during container loading (are the documents in order? is the product ready for the journey?)
It is not rare at all that received goods are damaged, flawed, or not compliant with the buyer’s requirements. That is why QC for importing from China/Hong Kong is so important. Do not cut corners and implement quality control measures. Otherwise, you may incur losses and even pose a threat to consumers if the products are unsafe.
Your own brand products from Hong Kong. What OEM means?
Basically, there are three types of manufacturers, ODM, OEM, and OBM.
- If you want to source products from Hong Kong with your own brand, you should choose OEM. OEM stands for original equipment manufacturing. Such products can be sold to consumers under the importer’s own branding. It saves money and time; moreover, it provides a good return on investment.
- If you want your products to stand out, opt for ODM. ODM means original design manufacturer. The manufacturer and the client design the product sold under the client’s brand.
- The last one, OBM, stands for an original brand manufacturer. It means that one company oversees the whole production chain and sells the products with its name and logo.
Regardless of which method you choose, make sure to register your trademarks in Asia. If you do not register your brand and try to move the goods out of mainland China or Hong Kong, they can get seized by the customs office.
What about customs duties on products from Hong Kong?
One of the importer’s obligations is to pay due duties. Different tariffs are applied depending on the country of origin and target customs territory. For example, products imported into the European Union are subject to customs duties in the TARIC system. Duty rates on products imported into the US can be checked in Harmonized Tariff Schedule (HTS).
The good news is that even if there are customs charges, importing from Hong Kong is profitable in most cases.
Importing from Hong Kong – documents and certificates
Importers must ensure that the products they intend to put into circulation comply with formal requirements. Product compliance involves regulatory directives, harmonized standards, requirements, and rules in accordance with the law. Just like duty rates, it varies from one destination country/area to another. For instance, in the EU, the CE mark is one of the most important symbols that shows product compliance. In the US, CPSC oversees the safety of consumer products. The rules change over time, so keep up to date.
Check out our practical guide on importing from Hong Kong to the EU and the US.