Hong Kong is a dynamic export market for U.S. agricultural products.  In 2021, total U.S. agricultural exports slowed for the fourth consecutive year to US$1.9 billion.  However, Hong Kong is the 15th largest market for U.S. food and agricultural exports.  For U.S. consumer-oriented exports, Hong Kong ranked 7th in 2021, with exports accounting for US$1.6 billion.  In addition to lower re-export trade out of Hong Kong, other factors have contributed to lower U.S. agricultural exports to this market, including logistic shipping issues.  Nevertheless, Hong Kong’s significance as a major food import market can be attributed to several factors:

• Most food and beverage products enter duty-free.  A rules-based import regime and sophisticated infrastructure for trade servicing, including financing and logistics, facilitates Hong Kong’s role as a trade destination and regional hub to China and other regional markets.

• An affluent consumer base, with per capita income of over US$49,600 in 2021, among the highest in Asia, that spends a significant portion of income on food.  Hong Kong consumers appreciate the quality and safety of U.S. foods and are willing and able to pay for higher-quality goods.

• Hong Kong remains an important gateway to mainland China and the region.

Outlook for 2022

• In 2021, Hong Kong’s economy grew by 6.4 percent in real terms from 2020.  However, since late January 2022, the fifth wave of the pandemic has adversely affected Hong Kong’s economic recovery.  Considering the latest internal and external situations as well as the stimulus effect of the fiscal measures, the real GDP growth forecast for 2022 is 1 – 2 percent.  

• Despite the four-year decline in U.S. food exports to Hong Kong, last year’s decline was the least severe drop since 2019.  Hence, food exports to Hong Kong could recover in 2022, but this will greatly depend on the evolution of the pandemic and the relaxation of government quarantine requirements on international travelers and social distancing restrictions.  Grocery products, meats, tree nuts, seafood, fresh fruit, wines, pet food, and eggs continue to be major export items, with demand for natural, plant-based, and organic food and beverages also growing.

• U.S. agricultural products continue to benefit from its strong reputation as safe, high-quality options.

Retail Sales and Outlets

In 2021, Hong Kong’s retail food sector sales dropped 5 percent to US$12 billion.  The Hong Kong food retail market is made up of supermarkets, convenience stores, and traditional markets. 

 (Source: Hong Kong Census and Statistics Department, US$1=HK$7.8)

Chart 1 – F&B Retail Sales in Hong Kong (US$ billion)

There are more than 690 supermarkets, 1,300 convenience stores, and over 100 traditional markets in Hong Kong, making food shopping very convenient.

Traditionally, Hong Kong consumers shop daily because of a preference for fresh food.  Much of the shopping is still done in traditional markets including street markets and locally owned shops.  Overall, street market sales trend toward fresh foods while supermarkets dominate in processed, chilled and frozen, high value-added and canned food products.  The competition between street markets and supermarkets has intensified in recent years.

Although the number of supermarket outlets is expected to remain stable, the market share for supermarket sales is expected to continue to increase in the future at the expense of traditional street markets which have lost in-person sales, especially from the more hygiene-conscious customers under the COVID-19 pandemic.  The supermarkets’ share in terms of total retail sales rose from 44 percent of total sales in 1995 to 61 percent in 2021.

Online shopping continues to grow, especially under COVID-19.  In 2021, food and drink e-commerce reached US$447 million, an increase of 14 percent over 2020, and it is estimated to reach US$733 million by 2026. 

Hotel, Restaurant, and Institutional (HRI) Food Service Sector

Restaurants: Hong Kong boasts over 14,000 restaurants which range from local “dives” to high-end fine dining outlets.  The Michelin Guide 2022 records 86 “star” restaurants in Hong Kong and Macau, including seven “three-starred” establishments in Hong Kong, outnumbering the five three-start restaurants in both New York City and London.  In 2021, Hong Kong restaurant food and beverage purchases, valued at US$3.87 billion, generated estimated sales of US$11.89 billion, an increase of 17

 (Source: Hong Kong Census & Statistics Department, US$1=HK$7.8)

For Hong Kong’s statistical purposes, restaurants are grouped into five broad categories: Chinese, non-Chinese, fast food, bars, and other establishments.

Chinese Restaurants: Chinese cuisine is the top grossing restaurant category, according to Hong Kong Census and Statistics Department, and it will continue its dominant share in the market due to deep-rooted cultural events, such as banquets for weddings and dim sum lunches, often enjoyed by groups of working-class adults and families.  Among all Chinese cuisines, Cantonese is the most widely available, with others including Shanghainese, Sichuan, and Chiu Chow also providing many options to diners.

Non-Chinese Restaurants: Due to its history as a global trade hub, sophisticated and affluent Hong Kong consumers have an enthusiasm for a range of international cuisines made from high-quality ingredients.  Footprints of restaurants offering non-Chinese cuisine options include Western, Japanese, Korean, Thai, Vietnamese, Indian, and more, are found everywhere in Hong Kong, leading to numerous opportunities for usages of U.S. foods and beverages as ingredients and for pairing.

Fast food: Fast food outlets suit Hong Kong’s quick-paced lifestyle where dining out twice per day at convenient locations is not uncommon.  Competition among fast food chains is intense as brands strive to retain customers and raise brand awareness, but some newer, leading U.S. fast food chains such as Five Guys and Shake Shack have a strong presence here.  McDonald’s and KFC are the leading Western-style fast food chains, and Café de Coral and Fairwood are the leading local fast-food chains, by brand share of foodservice value.  Western style outlets including Pret a Manger and Oliver’s Super Sandwich are often located in areas easily accessed by office workers who appreciate healthy and light options such as salads and sandwiches.

Bars: Hong Kong’s vibrant nightlife is renowned and is served by over 680 bars and pubs across Hong Kong.   Lan Kwai Fong in the Central Business District is home to over 90 bars and restaurants.  It is a place where locals, expats, and tourists gather for drinks in the evenings and during special occasions like New Year’s Eve. 

Other Establishments: “Tea restaurants” offer a range of localized Western and Chinese cuisines and beverages.  Milk tea is a particular local favorite consisting of adding milk (evaporated or condensed) to various tea combinations.  Hong Kong also has a vibrant coffee culture.  Independent specialist coffee shops have grown in number of outlets and sales the past several years.  The leading chains, by brand share of foodservice value, are Starbucks, McCafé, and Pacific Coffee.

Hotels

There are over 300 hotels providing more than 88,000 rooms for visitors to Hong Kong.

Institutions: Hong Kong’s institutional foodservice sector consists of hospitals, residential care facilities, schools, prisons, and travel industry catering facilities.  Many of these facilities, especially those operated by the government, purchase food supplies through tenders where price, quality, consistency, and stable supply matter.  Experienced local importers are familiar with the process and requirements.

Hospitals: Hong Kong has 43 public hospitals and institutions, managed by the Hospital Authority, and 12 registered private hospitals.  Some of the meal services are outsourced to caterers and distributors.

Schools: According to the latest (2020/2021 school year) Hong Kong government statistics, there were 1,046 kindergartens, 589 primary schools, 506 secondary schools, and 22 degree-awarding institutions in Hong Kong.  The Government provides nutritional guidelines for students’ lunch and the appropriate procedures to select school lunch suppliers.

Prisons: The Hong Kong Correctional Services managed some 29 correctional facilities including prisons and rehabilitation centers.  Inmates receive meals that are prepared according to health guidelines.

 Airlines: Hong Kong is located less than five flying hours from half of the world’s population, so its airport is very busy.   Connected to over 200 destinations, the Hong Kong airport handled 71.5 million passengers in 2019, and their three aircraft caterers have a combined capacity of 198,000 meals per day for plane passengers.  Since the pandemic began, however, traffic through Hong Kong airport has dropped precipitously.  Data from the Airport Authority Hong Kong (AAHK) shows that the airport handled just 1.4 million passengers in 2021, nearly 98% lower compared to pre-pandemic 2019.

Cruise Ships: Hong Kong’s Kai Tak Cruise Terminal can accommodate the largest ships in the cruise industry.  The number of ship calls reached 218 and the number of cruise passengers throughout reached 903,060 in 2019.  Due to COVID-19, Hong Kong cruise terminals suspended operations in February 2020 and resumed activities in July 2021.  While the industry was then preparing for the resumption of cruise travels, the surge of COVID-19 cases in early 2022 posed new challenge to the industry.  In February 2022, Royal Caribbean announced that it would cancel the remaining 2022 Hong Kong cruise-to-nowhere season and relocated its vessel “Spectrum of the Seas” to Singapore.  Cruise operator Genting Hong Kong subsidiary, Dream Cruises furthermore, filed to close the company.

Entertainment Parks: The two major theme parks in Hong Kong are Disneyland and Ocean Park.   Disneyland operates thirty-six restaurants, and Ocean Park houses nine.  These include restaurants and cafes that offer various cuisines.

Impact of COVID-19

Since its outbreak in Hong Kong in early 2020, COVID-19 has adversely affected the Hong Kong food service sector as international travel continues to be restricted.  Theme parks, cruise terminals, and schools have experienced prolonged periods of closure as Hong Kong tries to control the virus.  In addition, Hong Kong’s stringent quarantine requirements on inbound international travelers has isolated the city while the rest of the world has resumed normal businesses activities and travel.  In 2020, visitor numbers reached only 3.6 million, a drop of over 93 percent. Visitor numbers further dropped to 1.4 million in 2021.

Despite the pandemic, Hong Kong’s food retail sales remained relatively stable.  In 2021, Hong Kong’s retail food sector sales slowed only 5 percent to US$12 billion.  The mild downturn was mainly due to improvement in local pandemic situation that encouraged more dining at restaurants, which registered sales of US$11.89 billion, an increase of 17 percent over 2020.  However, the rebound in restaurant sales was roughly 17 percent less than 2019 sales (US$14.42 billion) before the pandemic.

Outlook for the Hotel, Restaurant, and Institutional (HRI) Sector in 2022

Improvements in the local pandemic situation in 2021 led to signs of recovery in the HRI sector.  However, since January 2022, the fifth wave of the pandemic skyrocketed the number of infections and led to the reintroduction of restrictions on gatherings and dining.  For the first quarter of 2022, restaurant receipts dropped 23 percent to $1.94 billion compared to the same period in 2021.  As the pandemic situation began to stabilize in late April, the Hong Kong government started to gradually relax some of the COVID restrictions.  The Hong Kong government has also implemented multiple measures to support businesses and individuals as the pandemic continues to severely damage the global economy.  As of May 19, 2022, the total relief provided by the Hong Kong Government has reached HK$394 billion (US$51 billion), and Hong Kong’s economy is expected to pick up in the latter half of 2022 when the coronavirus situation further improves.

Best Prospects for U.S. Consumer-Oriented Food Product Exports in 2022

U.S. food and beverage products will continue to enjoy good prospects in Hong Kong:

• Hong Kong has a highly developed marketing system, with tourists and affluent consumers demanding high-value imports.  Per capita GDP (over US$49,600) in Hong Kong is among the highest in Asia, enabling Hong Kong people to spend on high-quality food and beverages.  With the link between the U.S. Dollar and Hong Kong Dollar, price stability makes purchases from the United States attractive.

• Hong Kong will continue to be a key gateway for trade to other markets in Asia.

• Some product categories that are expected to be top prospects for U.S. consumer-oriented food product exports in 2022 include tea, fresh vegetables, fresh fruit, prepared food, eggs, condiments, and sauces, processed vegetables, pet food, bakery goods, and non-alcoholic beverages.

For more information about this industry sector, please contact the U.S. Agricultural Trade Office in Hong Kong:

U.S. Agricultural Trade Office

Address: 18/F, St. John’s Building

33 Garden Road, Central

Hong Kong

Tel: (852) 2841-2350

Fax: (852) 2845-0943

Email: atohongkong@usda.gov