Overview

• Hong Kong is a famous international sourcing centre for houseware products, including tableware, kitchenware, non-electric domestic cooking/heating appliances and sanitary ware made of a vast variety of materials.



• In response to the intensified competition from indigenous Chinese companies and other Asian suppliers, Hong Kong companies are shifting from original equipment manufacturing (OEM) to original design manufacturing (ODM). A few also develop and market their own brands. They are also moving upmarket by using more advanced technology in production, providing innovative designs and improving product quality.



• The retail scene in overseas markets is dominated by giant retailers who have bigger bargaining power than suppliers. They push hard for low prices, resulting in an ongoing trend of outsourcing production to low-cost areas, including the Chinese mainland.

Industry Features

Hong Kong is a well-known international sourcing centre for houseware products. The industry itself covers a wide range of products including tableware, kitchenware, non-electric domestic cooking/heating appliances and sanitary ware which are made of an array of materials, such as ceramic, metal, glass, paper, plastic, porcelain and china.

Companies in the field of metal cookware and kitchenware provide a comprehensive selection of products, including saucepans, casseroles, frying pans, Dutch ovens, steamers, egg poachers, double boilers and frying baskets. Stainless steel is the most commonly used material due to its durability. Aluminium-made cookware is also available, with porcelain-enamelled exterior and the interior coated with non-stick material.

Others focus on plastic-ware, including tableware, kitchen utensils, water pots, trash bins and bathroom accessories. The majority of them are small to medium-sized companies since production of plastic houseware, especially the smaller items, requires comparatively less labour input and capital investment. Sophisticated moulding techniques are generally not required for lower-end products. As such, some toy makers also engage in plastic houseware as their sideline business. On the other hand, the production of larger plastic houseware, such as buckets, basins and baskets, is dominated by a few large manufacturers since heavy capital investment is required for installing large machinery.

Hong Kong companies are also noted for producing convincing replicas of artefacts dating from the Tang Dynasty. These imitations are accurate reproductions in every detail, ranging from small ceramic horses to large pieces of Tang Dynasty tomb servants.

Owing to the high production cost in Hong Kong, most Hong Kong manufacturers have relocated their production to the Chinese mainland. Other high value adding functions, such as sourcing, logistics, product development and marketing are maintained by the Hong Kong offices.

Most Hong Kong houseware production is on an OEM basis. Facing intensified competition from indigenous Chinese companies and other Asian suppliers, Hong Kong manufacturers are shifting from OEM to ODM. A few also create and market their own brands (OBM). Some manufacturers apply more advanced technologies in the production process, such as gas-assisted and injection compression moulding in plastic houseware production. More resources are used in product design and maintaining product quality to increase the competitiveness of Hong Kong products. According to a TDC survey conducted in 2007, 89% of respondents in the houseware industry were involved in OEM business, while 72% were in ODM and 46% were in OBM.

Performance of Hong Kong's Exports of Houseware Products^

Hong Kong's total exports of houseware products were sluggish in recent years, dropping by 5% in 2006 and 2% in 2007 amid the trend of direct shipment from supplying places to the end markets and the fierce competition within the industry. Re-exports, accounting for over 99% of total exports, also fell in tandem by 2%. They were predominantly originated from the Chinese mainland. Metal cookware and kitchenware, and plastic houseware were the two largest export categories of the industry, each accounting for about 40% of total exports. Exports of these two product categories in 2007 were largely unchanged from the previous year.

The largest export market for Hong Kong houseware was the US (39% of total exports in 2007), followed by the EU (28%) and the Chinese mainland (8%). Nevertheless, in part due to the trend of direct shipment, exports to the US had dropped by 10% each year during 2005-2007. Exports to the EU, however, have regained some momentum, growing by 7% in 2007. On the other hand, exports to the Chinese mainland, after growing by 5% in 2005 and 4% in 2006, fell by 3% in 2007.