1 Aug 2018
Design Industry in Hong Kong
- Hong Kong is a regional design centre providing a rich source of innovative products and design talents.
- Hong Kong is a window to the world of the trends and styles of Asia, making it a great city to institute a well-established design community.
- Hong Kong is at the crossroads of Asia, and is a key gateway to the Chinese mainland. Meanwhile, Hong Kong's design industry is increasingly export-oriented.
- The "Business of Design Week" (BODW) held in Hong Kong is now the largest annual design event in Asia. Melbourne of the State of Victoria has been chosen as the partner city for BODW 2018.
Range of Services
The design industry in Hong Kong encompasses a broad range of disciplines: product design, multimedia, visual and graphic design, interior and furniture design, fashion and accessories design, jewellery design as well as industrial design. In recent years, design management has been taking shape as a new discipline in Hong Kong. Design management deals with the management of projects with a high content of design. Design management can be widely applied to projects related to fashion, product, graphics and interior design, though more applications are found in interior and product design whereby designers oversee the entire process from conceptualisation to production. In addition to their core services, some Hong Kong design firms also provide other design services including shop front design, advertising and promotion design.
According to the Hong Kong Census and Statistics Department, the number of employment in design services reached 16,350 in 2016, up 15.6% compared to 2012, contributing a value added of HK$4.2 billion to the cultural and creative industry sector.
According to a report released by the Hong Kong Design Centre (HKDC), in terms of the number of establishments, most of Hong Kong’s design service providers were engaged in the multimedia, visual and graphic design sector (35% of share), followed by the interior and furniture design sector (32%) and the industry design sector (11%). Meanwhile, records from the Hong Kong yellow pages showed that there were more than 4,000 design-related establishments in 2015, compared to some 2,400 in 2008.
Hong Kong's design practitioners are organised into various professional associations, including the Chartered Society of Designers (CSD), the Hong Kong Designers Association (HKDA), the Hong Kong Interior Design Association (IDA), the Hong Kong Fashion Designers Association (HKFDA) and Industrial Designers Society of Hong Kong (IDSHK). In addition, HKDC is an establishment with the joint efforts of the four associations (HKDA, CSD, IDA and HKFDA). It aims at promoting design as a value-adding activity, and raising Hong Kong's image as an innovation and creative hub. As a major contributor to the development of the InnoCentre, HKDC organises an annual event called "Business of Design Week" (BODW) in Hong Kong. BODW, a week-long event with conferences, forums, award presentations, exhibitions and outreach programme, is now the largest annual design event in Asia and one of the leading design events in the world. With Italy as a partner country, the BODW 2017 attracted more than 120,000 participants including business executives, designers and brand owners from Hong Kong and overseas. Melbourne of the State of Victoria has been chosen as the partner city for BODW 2018.
According to the Census and Statistics Department, the total exports of selected cultural and creative goods amounted to HK$453 billion in 2016, accounting for 12.6% of Hong Kong’s total exports of goods, in which the largest component was audiovisual and interactive media goods, followed by visual arts and design goods, contributing HK$325 billion and HK$57 billion respectively.
Many Hong Kong designers are exporting their services. Export content varied among different design industries, and the Chinese mainland is the biggest export market for Hong Kong's design services. Hong Kong designers have been paying increasing attention to the mainland market.
While many Chinese mainland enterprises are expanding, some of them are seeking services from Hong Kong design firms for re-designing their brands with the aim of better catering to the international market, as well as to maintain their competitiveness in the domestic market. With deep knowledge of the Chinese culture and international market practices, Hong Kong design firms can bring in comprehensive branding strategies and product design services for mainland enterprises.
Industry Development and Market Outlook
The demand for Hong Kong's high-end design services is rising in light of a more flourishing China market. Many international companies, large and small, rely on Hong Kong designers to tailor products for the Chinese mainland and Asian markets. Hong Kong designers can satisfy the demand for quality-assured creative services, which match international standards and at the same time, take into consideration Chinese tradition and design.
On the other hand, many of Hong Kong's light industrial products, such as toys, electronics and garments, are highly favoured in the international market. Hong Kong designers have participated in these industries for a long time and they maintain close working relationship with overseas companies. They understand fully the demands of overseas markets and therefore can capitalise on their international vision in designing products, and assisting the Hong Kong companies to advance from Original Equipment Manufacturers (OEM) to Original Design Manufacturers (ODM) and/or Original Brand Manufacturers (OBM).
With the affluent China market growing more sophisticated, more and more mainland enterprises are keen to stay ahead of the game in the local market while making inroads into the world market. Renowned as a stylish cosmopolitan and design hub in Asia, Hong Kong has always been a forerunner which mainland enterprises look up to their excellence in design, branding, and marketing.
Hong Kong’s design services sector is expected to further strengthen in light of various related government measures and the city’s enhancement in cultural and creative development. The 2017 Policy Address stressed the potential for collaboration between Hong Kong and Shenzhen’s design industry. In particular, the Qianhai Hong Kong-Shenzhen Design Innovation Hub is set to become an exchange platform for designers and entrepreneurs in the Bay Area, opening up new opportunities for Hong Kong designers and related service providers.
The Hong Kong government's "Create Hong Kong Office" (CreateHK) was set up in June 2009 to drive the development of Hong Kong's creative sector. CreateHK administers and manages two funding schemes, namely the CreateSmart Initiative (CSI) and Film Development Fund. CSI offers funding for initiatives related to design and other creative sectors (except film). CSI, a scheme of HK$300 million when it was set up in 2009, received an additional HK$300 million fund in 2013, while another HK$1 billion has been injected to bolster the cultural and creative industries, especially relative to nurturing young talents, and enhancing the community’s awareness of creative thinking and design capability.
CreateHK supports the Design Incubation Programme (DIP) (administered by HKDC) to nurture start-up companies in various design disciplines, including fashion, jewellery, media and branding. Incubatees are provided with assistance in many business development areas, training programmes and networking sessions with professional bodies and potential business partners. Since its launch in 2005 till January 2018, the DIP has already nurtured more than 200 design startups. Since 2016, the admission quotas of the DIP had been raised from 20 to 30 per annum, providing more room for eligible incubatees. Meanwhile, two incubation centres in Wong Chuk Hang and Kowloon Bay, were opened in December 2016 and April 2018, respectively, providing incubatees with a more enabling environment room to grow their businesses. In addition, the Fashion Incubation Programme (FIP), also administered by HKDC, is a new programme inaugurated in 2017 to cultivate fashion design talents.
In recent years, revitalisation of decommissioned buildings has become a popular means to provide spaces for the development of the design industry. For instance, a decommissioned factory estate in Shek Kip Mei has been turned into the Jockey Club Creative Arts Centre, where there are art galleries and other communal facilities hosting themed exhibitions, as well as arts and craft fairs. The Creative Arts Centre is providing more than 100 artists and art groups with workspace to practise and showcase their works. Moreover, the club house of the former Royal Yacht Club in North Point has been converted into a venue called ‘Oi!’. Opened in May 2013, ‘Oi!’ is a platform for art exhibitions, forums as well as other art and creative activities.
Further, the Former Police Married Quarters in Central Hollywood Road has been transformed into a landmark “PMQ”, which was officially launched in June 2014. The PMQ project is aimed at nurturing new designers, branding and business matching for the creative industries. Currently, PMQ is home to more than 100 entrepreneurs categorised under a wide variety of creative and cultural sectors, ranging from design services, fashion, household products, accessories as well as food and beverage.
Meanwhile, the West Kowloon Cultural District (WKCD) Development Project, aims to turn the 40-hectare waterfront site situated in the southern tip of West Kowloon into an integrated art, cultural and entertainment district, and enhance the development of art and culture in Hong Kong. WKCD is expected to become an arts hub which include a visual arts museum “M+”, focusing on modern art, design and architecture, offering good platforms for all the designers.
CEPA Preferences for Hong Kong’s Designed Products and Design Services
Since January 2006, the Chinese mainland has implemented zero tariff policy on imported goods from Hong Kong under CEPA’s preferential arrangements. As of July 2018, over 1,900 types of products were on the list of zero-tariff policy. Complying wit h the CEPA origin rules (ROO), Hong Kong manufacturers can apply for zero-treatment on their goods exported to the Chinese mainland. This policy can boost demand for high value-added processes, such as product design in the city.
Consistent with the general thrust of developing Hong Kong’s creative industries, CEPA’s Supplement VII consists of many liberalisation measures concerning the creative industries. In particular, a new sector named “Specialty Design” is added, with the corresponding CEPA provision stating that HKSS can set up wholly owned enterprises on the mainland to provide specialty design services. The service liberalisation has come into effect since January 2011.
Under the United Nations Central Product Classification (CPC), specialty design services refer to interior design as well as the aesthetic design of products and complete design of products which do not require complex engineering (e.g. furniture). China made no specific commitments under its WTO accession protocol to include specialty design services, and the Supplement VII measure is therefore beyond China’s WTO commitments.
After ten annual Supplements to keep widening and broadening the liberalisation measures in favour of HKSS, Hong Kong and the mainland entered into a subsidiary agreement under CEPA in 2014 to achieve basic liberalisation of trade in service trade in Guangdong (“Guangdong Agreement”). This was then followed in December 2015 by the Agreement on Trade in Services (“ATIS”) to extend the coverage of the 2014 agreement from Guangdong to the rest of the mainland. Unlike the Supplements which adopted a positive-list approach to introducing liberalisation measures, the two latest CEPA agreements adopt a hybrid approach to granting preferential access to Hong Kong using both positive and negative lists.
The ATIS, which covers and consolidates commitments relating to liberalisation of trade in services provided in CEPA and its Supplements and also the Guangdong Agreement, has been implemented from June 2016. National treatment is given to HKSS in the sector of specialty design, and the only reserved restriction for HKSS under the negative list concerns with not engaging in seal engraving services on the mainland.
Details of the preferential access concerning the specialty design services sector can be found at this website.