The startup ecosystem in India is blooming, and countless entrepreneurs here are itching to take their innovative products and services to the global market. Hong Kong could be the perfect launch pad for them, Simon Galpin, Director-General of Investment Promotion, Invest Hong Kong told YourStory.
Gateway to mainland China and South East Asia, low tax economy, independent judiciary, early technology adoption and affluent population, Hong Kong has much to offer startups who want to scale, Simon said. YourStory hosted Invest Hong Kong in Bangalore earlier this week where a select group of about 60 entrepreneurs closely interacted with Simon on business opportunities in Hong Kong.
We caught up with Simon on the sidelines of a fireside chat with Shradha Sharma, our founder.
Compared to other Asian cities like Shanghai and Singapore, what is unique about Hong Kong as a business city?
It is true that we have a number of competitors that begin with the letter ‘S’. Hong Kong shares many similarities with Singapore. Like Singapore, Hong Kong has a low and simple taxation. But what really sets Hong Kong apart is its location. It is very central, and so it is accessible to the leading cities not only in Mainland China and South East Asia but in places like Korea and Japan.
InvestHK says that this is the right time to invest in Hong Kong. Why? How has the business climate in the city become better than in the past?
The business climate in Hong Kong has evolved rapidly over the last decade and two clear opportunities have emerged: there is business to consumer (B2C) opportunities and this stems from the fact that we have a large number of high net worth individuals in Hong Kong as well as the economy surrounding Hong Kong. These individuals are always travelling to Hong Kong to shop. So we have tremendous concentration of luxury brands, products and services that these wealthy individuals want to buy. So for Indian companies that have a consumer product, a brand or consumer service, Hong Kong is a great place to stop because this affluent segment of China’s population will come to you. You don’t have to open up across China.
What are the most promising sectors for startups?
The startup community in Hong Kong is growing very rapidly from a very low base. We are trying to map out the sectors the startup community are in. From our initial studies, we see a real potential in sectors like fin-tech (financial services technology), ecommerce and eretailing. China is a huge market and also a great place to source consumer products and Hong Kong is a great place because you get access to not only the world’s social media, the Facebooks, Twitters and so on, but also all the social media channels of Mainland China as well. So it is a very special node to do eretailing and ecommerce.
Why is Hong Kong becoming a hub for wearable tech?
Hong Kong has been a major manufacturing centre and the centre for command and control of manufacturing units across China. Traditionally, Hong Kong’s industries have been in apparels, but now many of those traditional tycoons are very interested in startups that are in wearable technology. So Hong Kong could be a great place where some of the most innovative wearable devices can meet these traditional garment manufacturers. We think there is a lot of room to make these introductions and have some of these business leaders invest in these startups.
What about fin-tech? Do you have any programs in HK like the London Fintech innovation program?
We are looking at fin-tech because HK is one of world’s leading financial service centres. We have a broad and deep pool of financial service companies. And on the back of that, since Hong Kong is one of the most important offshore remnimbi trading platforms in the world, we are seeing a lot of fin-tech companies coming in to that space. We are looking to support these companies where we can and some of our co-work spaces and incubators are starting to focus on fin-tech.
Hong Kong is one of the world’s most expensive cities. How will this affect startups who want to set up shop in HK?
Unfortunately, nobody complains that HK is too cheap as a business location. If you look at ranking, we do have some of world’s most expensive office real estate in the world. But what is often missed by some of the rather sensational figures is the fact that Hong Kong is very unique – although it is very compact and comparatively small, you have a whole range of different accommodation options within a small space. So you may have one of the most expensive financial towers on the water-front and within two or three blocks you can have a building which is one-third of the price. Two or three stops around you will have the subway, and the buildings there are another one-third cheaper. So when we are attracting startups, we often show them that some of the co-work spaces available are often cheaper than those in London, New York or Silicon Valley. You can rent a desk or a seat in a co-work space in HK for as little as $130 a month.
How do you, as the Director-General of InvestHK, plan to encourage startups from India?
Much of our work now is about promoting HK not just as a business location but also as a growing startup hub. We need to communicate the fact that the startup community is growing from a very low base extremely rapidly. If you go back three years, we had just two co-work spaces in HK. Today we have 20. We have seen the number of startups we support at Invest HK grow by 60%. And we believe this is just the beginning. We believe that with the startmeup.hk programme we can really encourage more and more companies to come and more and more entrepreneurs from around the world to startup in HK.
Check out YourStory’s interview with Simon Galpin below.