Hong Kong is one of the world’s international financial centers. The city’s service-oriented economy is characterized by its low taxation, almost free port trade, and well established international financial market. All that, built on a long history of trade and commerce.
Hong Kong is ranked first as the freest economy in the world. Starting a business is easy and safe. Startups are defined by disruption and growth. Hong Kong is uniquely positioned to allow fast and high scalability. Products can be tested quickly by its hyper-connected population. The proximity to the Pearl River being part of the Greater Bay Area provides easy access to manufacturing and supply facilities. Strategically located at the heart of Asia, Hong Kong is reachable to half of the world’s population within five hours’ flight time. In turn, that opens the possibility for rapid expansion and international growth.
Hong Kong startup ecosystem in numbers
Proximity to China
The proximity to China surely comes into play on the supply side. The manufacturing hub of Shenzhen is just across the border of Hong Kong, which is approximately an hour’s drive from the center part of Hong Kong.
Shenzhen is often referred to as Nirvana by hardware-focused companies. The variety of products and the speed of manufacturing is simply unrivaled. It may take three months to get things done in other parts of the world, but Shenzhen can get it done within three weeks. Startups can go from prototyping to production in less than a month.
As a part of the Pearl River Delta the region is close to the largest manufacturing hub in the world. It allows easy access to Mainland China, hence, many business opportunities.
- The mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) enables easier access to the mainland markets for Hong Kong-made products and Hong Kong-based service companies.
- Foreign investors can partner with a certified Hong Kong Service Supplier to form wholly-owned enterprises in the mainland to carry out various types of ICT services.
- Hong Kong was the sixth-largest source of technology imports for the Chinese mainland in terms of contract value (2.6% of the total).
- Hong Kong was the Mainland’s third-largest trading partner (after the US and Japan) in 2017, and their total trade value accounted for 7.0% of the Mainland’s total trade.
Growing, diverse ecosystem
Hong Kong is fully capable of developing a strong tech startup ecosystem. It is ranked as the 5th fastest growing startup ecosystem in the world. The city’s startup ecosystem is also very diverse in multiple aspects:
- Benefiting from its long history in international trade, as a logistic hub and financial center, startups are disrupting a huge variety of industries and sectors.
- In terms of gender diversity, 45% of entrepreneurs are women.
- 65% of startup founders are Hong Kong citizens, while the remaining founders are foreigners and mainland Chinese.
- Young adults aged 25 – 34 show the highest early-stage entrepreneurship prevalence in Hong Kong. With an overall improved perception of entrepreneurship, more young people are seeing startups as a long-term career. Other than that, career switchers in more senior age groups from 45+ years old prevail in established startups. More infographics, statistics, and numbers regarding the Hong Kong startup ecosystem will be shown in the next section.
Hong Kong Startups
Currently, SenseTime, WeLab, Lalamove, Tink Labs, BitMEX, and Klook are the 6 homegrown stars in Hong Kong confirmed as unicorns. GoGoVan has recently exited after the merger with 58 Suyun with a unicorn valuation. The city is capable of nurturing successful startups.
The main reasons being:
- Reliable infrastructure
- Access to resources (R&D, talent, money etc.)
- Proximity to large pools of potential customers
- And an ambitious young generation
Although the number of exits and money raised is still picking up, it is important to note that Hong Kong is a place to expect, and look for, exciting (ad)ventures!
