Monday signalled the start of StartmeupHK Week, which promises to be an event-packed seven days on all-things startups in Hong Kong.
Simon Galpin is Director-General of government-funded InvestHK, the organiser of today’s StartmeupHK Venture Forum. He told e27 that Hong Kong, with its more than 1,000 startups, has three key areas that often take people by surprise.
“When we talk about Hong Kong facing challenges, we have to explain that Hong Kong isn’t just another Chinese city,” he said. “When people really understand that, they can then assume that Hong Kong is some kind of museum piece. Or that it’s a post-colonial relic frozen in time. So we have to communicate the fact that there are some real opportunities that have begun to emerge in the last decade.”
1. Surrounded by the PRD ‘mega city’
While Hong Kong is only a city of seven million, it is surrounded by the Greater Pearl River Delta (PRD) in Mainland China. Galpin argued this can be seen as ‘the world’s largest mega city’ with a population of 75 million, stretching from Guangzhou in the north to Macau in the south.
The PRD is bigger than the UK in terms of population, exports more than Italy, has a larger GDP than Indonesia and Turkey, but is smaller than Ireland and Panoma.
2. Business to consumer
“For (startups) that are looking to do business with China, Hong Kong is a great place to start,” he said. “The second (area that surprises people) is the business to consumer opportunity. Yes, we have a lot of wealthy people here, but we also have a growing number of wealthy visitors.”
Last year, Hong Kong had 54 million visitors, many of whom came just to shop (this is particularly true of Mainland China visitors). Brands, products and services in the city all benefit from this annual influx. Galpin said the argument is: start in Hong Kong and the consumers will come to you.
3. Business to business
“This third (surprise) is a business to business opportunity,” he said. “It’s a bit of a cliche that Hong Kong is a gateway to China, but it’s increasingly important as a springboard for Mainland companies… that want a base in Hong Kong.”
This means there is a rich business community with very strong ties to China able to help fellow startups with vital tasks like navigating the country’s social media landscape, or sharing Mainland contacts by way of introduction.
Galpin is naturally a proponent of the city as a startup location due to his figurehead role within InvestHK, but e27 pushed him for at least one challenge it faces in 2014.
“No one’s going to complain that Hong Kong is too cheap,” he said. “We have got some of the most expensive real-estate in the world, but what is unique to Hong Kong is the range of accommodation options within a small area. Yes, you could be paying a headline price per square foot in IFC 2, but go two or three blocks further and it will be 40 per cent cheaper. Two or three stops on the MTR — another 30 per cent cheaper.”
The city has seen an explosion in the number of co-work spaces in recent years. Now a seat in one costs as little as US$250 per month, which is cheaper by some measures than London or Silicon Valley. But it is literally just that — a seat. Full office rentals remain extortionate.
StartmeupHK Week runs right through to Sunday. A full schedule can be found here.