PRODUCT MARKET STUDY: MARKET POTENTIAL OF OFFICE FURNITURE
IN HONG KONG
Date: January 2004
The market for office furniture in Hong Kong is recovering, benefited from the
increase of business activities and the lowered average office rental. In 2003
(Jan-Sep), the value of Hong Kong’s imported office furniture was USD165
million. Malaysia’s market share was about 0.9 percent, about USD1.5 million.
There are very few Hong Kong office furniture manufacturers. U.S., Japan,
United Kingdom, Italy, Germany, and France compete for the high-end market.
On the other hand, Malaysia, China, Taiwan and Thailand supply most of the
middle to low-end market.
Hong Kong is an important gateway for Malaysian exports into the rapidly
expanding China market. Increased demand for office furniture in China,
particularly after China joints WTO, should show higher Malaysian exports to
2. Definition of Products Studied
Products related to office furniture are according to HS codes in 6 digits groups:
940310 Metal Furniture used in Offices
940330 Wooden Office Furniture
940161 Seats with Wooden Frames, Upholstered
940169 Seats with Wooden Frames, Not Upholstered
940171 Seats with Metal Frames, Upholstered
940179 Seats with Metal Frames, Not Upholstered
They are compiled into the office furniture category by the internet software
World Trade Atlas.
3. Imports / Exports
2001 2002 2003 (Jan-Sep)
Value(US$ mn) Growth(%) Value(US$ mn) Growth(%) Value(US$ mn) Growth(%)
Total 185.6 -12.6 165.7 -10.8 123.9 3.5
Imports 258.8 -16.7 232.6 -10.1 165.0 -2.8
Trade -73.2 -66.9 -41.1
Imports 4.6 -29.8 2.8 -39.1 1.5 -35.3
Sources: Hong Kong Trade Statistics, Census & Statistics Department
Imports of office furniture in 2003 (Jan-Sep) amounted to USD 165 million, an
2.8% decrease over the 2002's imports of the same period. This reflects less
imports of non-upholstered wooden seats (-31.6%), metal furniture (-12.3%) and
upholstered metal seats (-9%).
On the other hand, the increased imports include non-upholstered metal seats
(+22.5%) and wooden office furniture (+7.9%)
Imports from China accounted for a larger share of total imports of office furniture,
from 84.8% in 2002 to 86.1% in 2003 (Jan-Sep), followed by Italy (3.1%),
Germany (1.2%), US (1.1%), Taiwan (0.9%) and Malaysia (0.9%).
Hong Kong's office furniture imports in 2003 (Jan-Sep) comprised 35.5% of
upholstered wooden seats, 24.4% of metal non-upholstered seats, 17% of
wooden office furniture and 9.5% of metal furniture.
Imports of office furniture in 2003 (Jan-Sep) from Malaysia amounted to USD 1.5
million, a 35.3% decrease over the 2002's imports of the same period. This
reflects less imports of non-upholstered metal seats (-90.9%), non-upholstered
wooden seats (-82.8%) and upholstered metal seats (-68.8%).
On the other hand, the increased imports include metal office furniture (+151.4%)
and wooden office furniture (+5.5%)
Hong Kong's office furniture imports in 2003 (Jan-Sep) from Malaysia comprised
58.5% of upholstered wooden seats, 18.8% of metal furniture, 14.6% of wooden
office furniture and 4.1% of non-upholstered wooden seats.
4. MARKET ACCESS
Hong Kong is a free economy. There is no tariff on general imports. However,
there is duty on liquors, tobacco, hydrocarbon oil and methyl alcohol. This is
prepaid by the seller and included in the price, so it often goes unnoticed. Duties
on these goods raise revenue for the general administration and for development
projects, while at the same time help to keep general tax levels low.
The Customs and Excise Department is responsible for enforcing the law for
collection of duties and protection of revenue.
Therefore, office furniture is tariff-free for import and export in Hong Kong.
For inquiries on specific products, please contact:
Customs and Excise Department
8th Floor, Harbor Building, 38 Pier Road, Central, Hong Kong
Tel: (852) 2852-3324, Fax: (852) 2541-9827 (Dutiable Commodities Division)
4.2 Other Import Regulations
Few product safety standards are required for the domestic Hong Kong market,
except products relating to fire control and some consumer products.
Malaysian companies seeking to export to Hong Kong should check with
potential agents and customers to determine exact standards required.
Non-tariff barriers such as labeling requirements, are not onerous to comply with.
Documentary requirements to be met when exporting houseware products to
Hong Kong are:
- Bill of Lading
- Certificate of Origin
- Commercial Invoice
- Import License
- Packaging List
- Insurance Certificate
4.3 Market Characteristics and Consumer Preferences
The principal market in Hong Kong for office furniture includes multinational
firms, many of which use Hong Kong for their regional headquarters. As one of
the world’s financial and economic centers, Hong Kong has attracted 400 of the
Fortune 500 firms.
A limited real estate supply dictates that high-rise office space must be used
effectively and efficiently. The concept of shared facilities and common space
has been accepted. As a result, office furniture that provides more mobility
and flexibility to meet the changing nature of offices is preferred. There is
also increased emphasis on design with the added requirement of technology.
In Hong Kong’s modern offices, the trend is towards mobility and flexibility
i.e., putting furniture and other office equipment on castors or wheels, making
them easily movable. Wall and partition systems are easily reconfigured with
wiring that can plug into any number of static power sources.
Popular office furniture systems in Hong Kong include those with
height-adjustable desktops, work-surface extensions, mobile tables, and
pedestals with wheels.
Hong Kong office furniture systems emphasize modern design, function and
color. For example, desk and conference table systems must cater to
communication-oriented businesses, where tables need to be set up and
dismantled quickly to handle conferences, meetings and team discussions.
Chairs should be designed to fit a foldout, cordless keyboard in one of the
More companies are including office caddies as part of their product line. The
caddies, rolling containers to hold each employee’s work documents, are easily
transportable and are increasingly useful as workstations are shared and work
places are no longer permanent.
In order to fit customer needs, some manufacturers are also introducing
height-adjustable worktops that are particularly suited for one-to-one stand up
discussions. Moreover, many companies are introducing new, ergonomically
swivel chairs, which typically have movable backrests and seats that adjust to
the user’s height and weight.
Office furniture constructed with hardwood has become popular in Hong
Kong because of the material’s versatility and warm, aesthetic qualities.
Hardwood-made furniture can be used in various ways and be easily matched
with other decoratives. The elegant and classic touch of hardwood-made office
furniture conveys a sense of authenticity which, when used with other types of
décor and ornamentation, conjures up a comfortable and refined atmosphere.
Wooden furniture has dominated Hong Kong’s office furniture market, but metal
office furniture is becoming popular and environmentally-conscious consumers
no longer insist on solid wood.
With the growth of telecommunication / IT companies in Hong Kong, “cyber” style
furniture is popular in Hong Kong.
Domestic office furniture demand is growing steadily. The Hong Kong market is
attracting not only European manufacturers, but also Asian office
furniture manufacturers. Because of this, some Asian office furniture
suppliers exhibit their products at Hong Kong exhibitions. Moreover, an
increasing number of manufacturers are opening retail outlets here.
4.4 Pricing and Packaging
While price is important, it is not the most critical factor for buyers.
Quality, design, environmental qualities, after-sales service, delivery, brand,
and comfort are equally important. Since furniture is used for at least several
years, endurance is also the factor for consumers to consider.
DIY furniture is still popular in Hong Kong. The most successful DIY furniture is
Ikea which has 4 huge outlets in Hong Kong. Other than Ikea, however, most
DIY furniture in Hong Kong are low-end and non-branded products.
4.5 Distribution Channel
One of the best ways to sell products in the Hong Kong market is through the
use of agents or distributors. It is also an excellent way of minimizing the
initial investment in the market. As outlined below, there is a wide range of
companies, which can serve as agents or distributors for Malaysian firms. Other
options for pursuing Hong Kong’s market are establishing an office or
partnering. Companies looking to sell equipment needing long term maintenance
or technical support or installation or who are seeking to become involved in
infrastructure projects frequently seek to partner with local companies.
Working with agents and distributors in Hong Kong is very much like working
with an agent in Malaysia. An agent takes orders in the supplier's
name. Distributors act in their own name and may stock products purchased from
the manufacturer for resale. The choice depends on the relationship with which
the manufacturer/supplier is most comfortable and the nature of the business.
There are many types of agents and distributors in Hong Kong,
ranging from those who simply stock retail stores with standard items to agents
who provide sales, engineering and technical support for complex systems. It
is common for a single company to deal in a wide variety of products in a
particular sector. Agents and trading companies may be less specialized than
companies in Malaysia, but the best ones are focused and
have contacts in a general line of business.
Many promotional vehicles are open to suppliers to introduce and develop their
services in the Hong Kong market. These include:
- special trade fairs and exhibitions
- advertising in the media and other public relations activities
- holding seminars
- in-store promotions
- joint promotions with wholesale and retail outlets
Hong Kong has no specialized furniture trade fair. However, Malaysian
companies could join HK Houseware Fair 2004 which Matrade participate every
5. Assessment of Prospects for Malaysian Exporters
Although the Malaysia had only a 0.9 percent share of Hong Kong’s total imports
in 2003 (Jan-Sep), it was the Hong Kong’s sixth-largest office furniture supplier
after China, Italy, Germany, US and Taiwan. The small Malaysia market share is
due to increasing competition from China where there are cheap labor and
China supplied 86.1 percent of Hong Kong’s office furniture market. China’s
product is mostly low- to middle-end, but is improving. Most of the designs of
Chinese-made office furniture are copied or modified slightly from European
Hong Kong still provides business opportunity for Malaysian exporters of low- to
mid-end products as the commercial sector’s sentiment has not been completely
recovered. Most of the Hong Kong companies are still concerned of operative-
cost. However, the CEPA and the Individual Visit Permission of Mainland
Chinese scheme agreed by the Chinese government have underpinned the fast
recovery of economy in Hong Kong. Malaysian exporters should begin to export
the better quality and design office furniture to cope with the market demand from
the recovery of Hong Kong. Also to avoid direct competition with China,
Malaysian manufacturers could develop their office furniture with more added
values to target to high-end consumers.
Relevant Trade Fairs:
2004 Event Location/ Admission Organizers:
Name/ Exhibitor/ Visitor/
Apr 21 - Hong Kong Houseware Fair Hong Kong Hong Kong
24 2004 Convention and Trade
Household products, Exhibition Centre. Development
handicrafts, home Trade Only. Council
decorations, kitchenware, Admission Fee:
small electrical appliances, HK$100
furniture, artificial flowers &