Hong Kong’s Emerging Startup Scene

The city-sized country of Hong Kong occupies a unique financial position. With roughly 7.2 million inhabitants of varying nationalities, it is a “Special Administrative Region of the People’s Republic of China,” yet retains a certain autonomy and a quasi-freedom to self-govern. Due to its uncommon status, this emerging market offers enticing opportunities for foreign investment in startups. Analysts claim that, while the devaluation of the Chinese RMB has affected Hong Kong’s Hang Seng Index, “there are still plenty of beneficiaries out there.” Others note that the Hong Kong dollar’s peg will only be volatile in the short-term, and will gradually become more stable. The “currency has been kept at about HK$7.80 per U.S. dollar since 1983.”

Would-be investors in Hong Kong may be rather interested in the hot topic of startup enterprises, particularly in the technology sector. The country stands poised with the proper capability – whether in terms of infrastructure, human capital, or curiosity — to seize the advantage in this ever-growing market.

One Westerner made the trek to Hong Kong and spent time a year assessing the situation, establishing a network for these cutting-edge companies, and gleaning special insights. Paul Orlando had already gained familiarity with the city with his prior business relationships and returned there in 2012 with an entirely different focus. He observed that this small nation needs to pool resources and gain wide support within the community for backing new business ventures. As with any task, the greatest strength is in numbers: the more individuals providing input, the greater potential results. Such resources include corporate-backed startup accelerators, crowdfunding, and group sourcing design and development skills.

Orlando’s assessment, however, did provide certain caveats to this investment opportunity. To begin with, it appeared that the startup founders were not paying enough attention to customer needs. By definition, the goal of marketing is to examine customer interests and cravings, to satisfy their demand. Furthermore, a considerable number of firms focus too much on having a “sexy” approach: something alluring and flashy, whereas they should place greater emphasis on creating something that works.

Orlando also went on to make predictions regarding the future of Hong Kong-based tech startups. “In the next few years, the HK tech community will grow to around five times the current number of people. Still a lot smaller than NYC, a similarly sized city, but much more of a presence than today. More from both HK people and expats.” His prognosis tended toward optimism, focusing on growth and global awareness. “Around 20 growth stage US startups will locate teams in HK. Not as a gateway to China, but as a gateway to Asia and to international business.” The Chinese markets can be difficult to navigate, whether through language, cultural, or legal barriers. In recent news, the world has been watching the Chinese market volatility with concern. Hong Kong is unique in that it represents both the burgeoning economic growth of China and the time-honored efficient markets of the West. It may very well be the open door sought after by venture capitalists.

In his research, Orlando created a list of Hong Kong tech-based startups to watch.  Here are six:

• Red Soldier
• Mamahen
• Green Queen
• CoinDirect
• Altitude Labs
• Gadmobe Interactive

Without commenting on the respective success of these individual firms, they all have valid websites and continue to contribute to Hong Kong’s global presence. Their reach encompasses diverse corners of the Internet and technology sector and offers inspiring examples of potential growth in this arena. For additional information on the Hong Kong scene and promising investment vehicles, consider the following websites/organizations:

• StartMeUpHK
• StartupsHK
• InvestHK
• SME Creativity Center
• Nest

Source:

• “A Cheaper Yuan Actually Boosts These HK Stocks.” Nysha Chandran. CNBC.com. August 27, 2015. Retrieved from: http://www.cnbc.com/2015/08/27/cheap-yuan-boosts-these-hk-stocks.html?__source=yahoonews&par=yahoonews
• “Hong Kong Dollar Options Suggest Peg Is Most at Risk in a Decade.” Fion Li. Bloomberg.com. August 26, 2015. Retrieved on August 27, 2015 from: http://www.bloomberg.com/news/articles/2015-08-26/hong-kong-dollar-options-suggest-peg-is-most-at-risk-in-a-decade
• “Paul Orlando on Hong Kong’s Startup Scene.” Josh Steimle, Contributor. Forbes.com. August 14, 2013. Retrieved on August 27, 2015 from: http://www.forbes.com/sites/joshsteimle/2013/08/14/paul-orlando-on-hong-kongs-startup-scene-infographic/