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Voiceover: Hong Kong is Asia's cosmetics capital. Australian cosmetic exports exceed A$135 million
per annum. Peter Law is Senior Vice President of large scale local retail operator, Sasa,
a company with over 260 stores, including operations on mainland China.
Peter Law: Hong Kong is a free trade port without any import tax, brands from all over
the world can enter the market easily. International brands coming from USA, Europe, and some Australia
are the major players.
Voiceover: Despite their growing popularity locally, many Australian cosmetic suppliers
encounter a steep price barrier to compete in the Hong Kong market. Tiffany Lau explains.
Tiffany Lau: For some of the Australian brands, when they do the pricing they will just take
half off from the retail price. But in Hong Kong, even in China, it's very difficult because
we have very high costs here. So what we usually do is, I think most of the brands in Hong
Kong are doing the same thing, we take the cost and multiply by four to five times.
If you take half of your Australian retail price and multiply it by four or five, it's
very, very expensive here in Hong Kong, which reduces your competiveness in the local market.
If we are selling the product through channels like Watsons or Mannings or even other stores,
they require a certain date of freshness for the products. So the expiry date is very important
here and also the ingredients. All the products must have the ingredient list on the product
itself or the box itself.
William Choi: When it comes to the packaging I always recommend that it's a combination
of Chinese and English.
Voiceover: William Choi heads up Mekim, which is a major distributor based in Hong Kong.
He says using traditional Chinese characters on product labels is very important for the
Hong Kong market.
William Choi: The traditional Chinese is used in Hong Kong, simplified Chinese is used in
China. Now when you add the label onto the product, if you put traditional Chinese onto
the product, consumers from China, they have higher confidence because then they will have
the impression that this is a kind of imported product. If you put simplified Chinese onto
the pack then they might have the impression that this product is from China.
Voiceover: So to hit the ground running remember to be flexible with your wholesale pricing
and take advice from your distributor regarding labelling. The font and look of your packaging
can have a huge impact and remember, requirements for a full list of ingredients and a long
shelf life.
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