Profiles of Hong Kong Major Service Industries

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Last updated: 26 March, 2008

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Marketing Services




Overview
  • Hong Kong is the marketing services capital of Asia, where a full range of services can be found. The sophistication of the market has attracted a strong presence of multinational agencies and a critical pool of marketing services talents. The majority of multinational agencies have their regional headquarters set up in Hong Kong to take care of their regional business.

  • Marketing services export will be one of the fastest growing services industries in Hong Kong, in light of the rapid rise of the Chinese mainland as a big market for consumer products and services.

  • The Chinese mainland is widely regarded as having the best growth potential for marketing services companies. Hong Kong is the gateway to this land of opportunities in light of the mainland's World Trade Organisation (WTO) liberalisations and the Closer Economic Partnership Arrangement (CEPA) agreement with the mainland.

Industry Data

Advertising and Related Services

Sept 2007

Number of Establishments

4,622

Number of Persons Engaged

19,647

Sources: Quarterly Report of Employment and Vacancies Statistics

Range of Services

Hong Kong offers a full range of marketing services (advertising, brand/image consulting, event organising, public relations/corporate communications and market research). Large Hong Kong-based companies are able to provide one-stop solution to clients. Hong Kong has a highly developed consumer market, which offers an excellent testing bed for marketing concepts and techniques. Hong Kong companies are thus sophisticated users of marketing services.

Advertising: Advertising agencies initiate, manage and implement advertising campaigns. In general, advertising agencies provide three major types of services, namely account management, creative services and media planning. Those that provide all three services are traditionally called full-service agencies. Some bigger multinational agencies also provide related services such as sales promotion and public relations, while smaller ones may only provide a more limited range of services. Many advertising agencies spin off their media planning department as specialist companies.

Brand Consultancy: There is growing awareness of the importance of branding and corporate identity by enterprises as an essential component of business success, especially among those that would like to expand beyond home market. Agencies which specialise in brand consultancy have become increasingly high-profile players. Services provided include brand strategy, brand extension and expansion, brand communications and planning and internal branding.

Event Organising: Being the premier trade fair capital in the region, Hong Kong is the host to a wide range of trade fairs and international events. In general, the larger international event organisers tend to provide a one-stop-shop solution by organising conferences, seminars or other side events as a supplement to the exhibitions and have a wide variety of shows. By contrast, the smaller organisers tend to specialise in organising similar shows in different locations.

Market Research: Market research involves studying people as buyers, sellers and consumers, examining their attitudes, preferences, habits, and purchasing power. Market research is also concerned with the channels of distribution, promotion and pricing, and the design of the products and services to be marketed. A large portion of the work performed by most market research firms is commissioned by specific companies for particular purposes. However, some firms also routinely collect a wide spectrum of data and then attempt to sell some or all of it to companies that may benefit from such information. Market research may be quantitative, qualitative, or a combination of both.

Public Relations: PR professionals help clients to develop communication and understanding with the target audiences. Services include media relations, marketing, copy-writing, press office, sponsorship, events and conference management etc.


Service Providers

Hong Kong has a developed marketing services market which is dominated by the multinational agencies. Many multinational marketing services companies have a strong presence in Hong Kong and have their regional headquarters set up here to take care of their regional business. There are also a large number of smaller companies / consultants.

Exports

Advertising, Public Relation Services and Market Research

2006

Advertising, market research & public opinion polling services (US$ mn)

550

Contribution to total services exports (%)

0.8

Business & management consultancy & public relations services (US$ mn)

2,178

Contribution to total services exports (%)

3.0

Source: Report on Hong Kong Trade in Services Statistics for 2006, Census and Statistics Department


Major services exported include: creative advertising, media buying, direct marketing, graphic design, marketing consultancy, customised market research and sales of research data. Other related exports include Hong Kong-based crew producing advertisements on behalf of overseas clients.


Industry Development and Market Outlook

It is estimated that the global advertising expenditure will grow 6.7% from US$455 billion in 2007 to US$ 485 billion in 2008. Developing markets will take over as the main contributors to global growth, compensating for slow growth in developed markets.

While Asia is undoubtedly a major growth area for marketing services, the China market is where the bulk of opportunities are located. For instance, the 2008 Olympics (Beijing), 2009 East Asian Games (Hong Kong), 2010 Asian Games (Guangzhou) and the 2010 World Expo (Shanghai) are expected to boost to the marketing services market in Asia.

The Chinese mainland became the world's third biggest ad market after the US and Japan in 2007. According to an industry source, the total ad spending on newspaper, magazines and television reached US$61 billion in 2007, a 15% increase from 2006.

The demand for Hong Kong's quality marketing services, from MNCs as well as established mainland companies, has been rising in light of a more competitive post-WTO environment.

  • With more foreign companies entering the mainland market, fierce competition drives demand for spending on marketing services.

  • Hong Kong companies with manufacturing facilities on the mainland focus more on domestic sales and distribution. Hong Kong marketing services companies are old partners to work with.

  • More and more mainland companies come to understand the importance of advertising, brand building and corporate identity building. Increasing competition and more sophisticated consumers will necessitate mainland enterprises to pay more attention to market intelligence.

  • There is increasing demand for public relations service from mainland companies that are going "global". They will need advice from communications professionals with experience and expertise. Given the language and cultural proximity and the fact that such mainland companies usually have a base in Hong Kong, they are more likely to entrust Hong Kong marketing services firms to advise on achieving a quick and seamless integration with the international community.

Hong Kong's marketing services companies are first-movers in the mainland market. Mainland business has also become an increasing source of income for Hong Kong marketing services companies. The CEPA agreement further faciliates Hong Kong marketing companies' expansion in the mainland market. For instance, foreign companies were permitted to establish wholly-owned advertising firms in end-2005, whereas Hong Kong companies were permitted to establish wholly-owned advertising firms on the mainland in early 2004. As of February 2008, 84 advertising companies had obtained Hong Kong Service Supplier (HKSS) certificates out of 90 applications.

Under the CEPA V liberalisation measures announced in 2007, Hong Kong service suppliers of market research services are allowed to set up joint ventures with majority shareholdings in the mainland. Market research services covers investigation services designed to secure information on the prospects and performance of an organisation's products in the market. This includes market analysis (size and characteristics of a market) and analysis of consumer attitudes and preferences, which may utilise personal interviews, telephone and mail surveys. Economic and social intelligence services not in connection with merchandised products, such as industry analysis, econometric modelling and demographic analysis are also included.

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