Entrepreneurship :: Location Strategy

Connecting the Dots in Global Trade
For decades, Hong Kong has been called “The Gateway of China.” That title makes sense, considering the city has the highest concentration of trade-related businesses in the world. According to recent government figures, Hong Kong handled a whopping US$648 billion in trade in 2006 alone!

In 1994, I moved from the US to Hong Kong (where I was born) and started a software company with my business partner. We figured the Internet technology (IT) market in the region was still at its infancy, and that we should take advantage of being an early mover. And, since we were in Hong Kong, what better field to specialize in than trade?

There are 100,000+ companies currently involved in the trade industry, so it’s safe to say that there is huge potential for success. With this in mind, we set out to develop tools targeted to trading firms (as well as buying agents and factory owners) to help them streamline their operations and service their overseas customers. Little did we know what we’d be up against.

The Culture Factor
In Hong Kong, you can easily find large and successful businesses that have little or no IT infrastructure (desktop computers do not count). While there are exceptions, in general Hong Kong businessmen are more likely to invest in expensive equipment or constructing factory buildings than in software.

The Cost Factor
IT fans will be amazed at the amount of manual data re-keying that exists throughout companies’ supply chains. The phrase “I’d rather hire more people to re-key the data” is not uncommonly heard. The cost of employing clerical staff in Hong Kong is much lower than that of most developed countries. Businesses in Hong Kong and China are so closely linked that any clerical work that becomes expensive in Hong Kong is at risk of being moved to China. To our chagrin, the standard sales pitch of increasing staff productivity or reducing staff costs does not usually work in Hong Kong.

By: Michael Hung, {EO Hong Kong}.

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