Business Culture and Etiquette - Doing Business in Hong Kong
The Business Cultures and Etiquette on Doing Business in Hong Kong is like a mixed dish, difficult to tell it is Western Style or Fusion Chinese. In this blog post, we will show you some tips, and practices on how you should be doing business in Hong Kong without breaking a taboo.
To highlight with, there are quite some differences between Hong Kong and Mainland China in terms of Business Culture and Etiquette, Hong Kong is an international city welcoming different business cultures and etiquette, and It would be awkward to apply the cultures and etiquette of China here in Hong Kong.
1) How to Bargain in Hong Kong
Great news for you, most of the time, you don’t need to bargain in Hong Kong. Different from China where bargaining is what you often need to bear in mind before purchasing in most of the business circumstances, and there’s even a guide to teach you the tips of bargaining in China.
The reasons that Rooms for Bargaining and Bargaining Culture in Hong Kong are not so common, because
Hong Kong is a small, densely populated city with a price tag everywhere. Making most of the products and services need to be transparent in pricing, or else, due to high competition (your competitors just next door)
E-commerce and E-shopping are popular in Hong Kong, and we used to check the price online before purchasing - https://www.price.com.hk/ - https://www.hktvmall.com/hktv/en/
Even there are one or two cases of over-pricing, the Consumer Council in Hong Kong is actively dealing with complain about any unfair trade practices in Hong Kong. The council even with a Price Watch platform for the public to check the price of a certain good of major supermarkets
In this business environment, Hong Kong people tend to stick to this culture in doing business and offer a reasonable price at the beginning (Market Price) and reserve a thin room for discount
From below figure of Statistics of Offshore Trade in Goods by the Census and Statistics Department of Hong Kong, the gross margin is only about 6% for Hong Kong sellers, which means most of the companies can offer you is about a 3-5% discount in most of the case
Instead of lengthy bargaining, Hongkongers prefer to work for a quick deal (chase for efficiency), with the International Trade Hub status, we make profits through volume
The Practice of bargaining on Doing Business in Hong Kong – If you are really eager to have a discount …
Determine whether after a 5% discount, will you be able to accept
Ask for it at the last minute, show that you are serious in closing the deal and ready to engage
“Just Ask” for the discount, which saves the time for your counterparty
Give a “Good Reason” – most of the time, you are not facing the final boss, a good reason helps the staff to request a deeper discount you, for example, you need to attract the local customers to try the product in order to make a bigger order next time
Usually, with this strategy, you will obtain a final offer, and any further discount negotiation will simply be rejected, even not willing to do business with you in the future
2) What is the communication style of Doing Business in Hong Kong?
We, Hongkongers, are nice, polite and respectful to one another
That means we don’t smile and welcome new friend as you expect
Because Cantonese is our mother tongue, we are more confident in English writing than oral talking, thus, we prefer to communicate in email or Whatsapp
In general, Hong Kong people are helpful and resourceful, because we are under Chinese traditional influence, we tend to respect others rooms, spaces, and privacy
To break the barrier, you can try to open the dialogue by “Nei Hou (你好)”, meaning hello in Cantonese, often, this will surprise your business partner and become more friendly to you
“Hardworking Hongkongers” is a common impression in foreigners' eye, the good point is, your business partner will reply you with efficient, however in some circumstances, you will feel a little bit pushy when doing business with Hongkongers
3) What should you do when the time of the initial greeting at business meeting in Hong Kong?
Handshake (no necessary to bow down) at the beginning, follow up with a slight self-introduction
My name is Tim (English Name), great seeing you” if he or she thinks that we are at younger or in a similar age, less official
“I am Mr. Yeung (Chinese Surname), nice to meet you” if he or she thinks that you are much younger, or the person is at a senior position or elder person
If you are at a meeting or an official greeting location, it is better to address people with their title and surname (for example, Doctor Wong, Mrs. Lee … etc.)
Then, exchange your business card as the gesture
Some additional tips on business meeting etiquette in Hong Kong
We rarely have any physical contact except handshake in a business place, we don’t hug, kiss on the cheek or hand, tapping shoulder, or expressing many emotions during a business meeting
We remain calm and polite most of the time and leave all the talking to the leader (boss) as professional and respectful manners
4) What is the Dress Etiquette on Doing Business in Hong Kong
Shirts and Ties, but not necessarily a suit unless this is the first-time meeting to show our respect and look more professional
Black and White, or Dark Blue are the common colors we wear for business occasion, friendly visits or gathering, due to the hot and humid weather in Hong Kong, we don’t even wear a tie during summer most of the time
Woman in business has a bigger variety, where shirts, trousers or dress with a blazer are all welcomed
The biggest tip is to avoid “ALL in White Color” on any occasion as this is the color of traditional Chinese Funeral Attire
Instead, red color is symbolic the new year and great for happy moments, such as a wedding, if someone invites you out during new year’s holiday or to attend a wedding, wearing something red to impress and celebrate the joyful moment with the host is the winning tips
5) What gifts should I present for my business partner in Hong Kong
Yes, we will send gifts or best wishes in these events and festival time to close friends and business partners
The Chinese New Year, we will send gifts, and red pocket, wishing each other a lucky, prosperity, healthy and joyful year;
Mid-Autumn Festival, we will send Mooncake and Fruits to business partner and families as the time celebrate the time for Family Reunion, Gathering and the meaning of fulfilled, completed of the round full moon;
Christmas, we will exchange gift within friends, within the company and within the family, yet, it is not common to send gifts to business partners;
Wedding, Birth, and Death. These three special occasions, we send flowers, gift vouchers or directly compassionate money to express our sincere but deep empathy to each other as a friend, as a family, and as a true partner
However, don’t buy anything over-price because bribery is not common in Hong Kong. It is a criminal offense and ICAC (Independent Commission Against Corruption) is there, so be aware of this in presenting gifts when doing business in Hong Kong.
If someone invites you for dinner, home visit or a gathering, you can present a bottle of house wine, nice cookie or cake, Chinese tea, or chocolate as gift, where you can purchase from most of the shopping mall or large supermarkets, because Hong Kong is the food paradise where any foods or beverages are the top picks for gifts.
6) What is the Business Etiquette of Dining, Drinking and Meal Events in Hong Kong
Happy Hour is common in Hong Kong, especially for those high-stress industries (finance, tourism, retail-related) to have a drink with colleagues for a break
Unlike Japan and Korea, this is all voluntary and just about relax. No one will force you to join because most of the Hong Kong people will simply back home, especially those with family and kids
In a business occasion, your business partner will usually invite you for lunch instead of dinner, and you may take this chance to get a closer relationship, and trying to have some soft discussions about the business deal
In general, the drinking culture is different from China, if you don’t drink, people won’t feel being offended if you reply politely with a Chinese Idioms (以茶代酒 – Drink Tea Instead of Alcohol)
This is a courtesy to ask what you don’t like to eat or what cuisines you prefer in Hong Kong, if you have no preference, usually the host will take you for “Dim Sum” as there are many varieties to choose from
For settling of bills, usually, the host will get the bills, and no question asked, especially, for the first day of your arrival or first meet
Most of the time, we will have Chinese cuisine, so it is better for you to know some of the Dos and Don’ts about Hong Kong Dining Etiquette
Generally Speaking, since Hong Kong was a British colony since 1843 till 1997 and return back to China, the business culture and etiquette in Hong Kong is more internationalized than the Mainland China, please feel free to express your preference and we will happy to respect your choice. In return, try to feel ease with our shy, polite, respectful attitude in doing business while always maintaining a proper distance.
To finish with, let’s see how it would be a normal working day in Hong Kong
This is a blog post under our "Definitive Guide on Doing Business in Hong Kong", if you need any support in relation to company set up in Hong Kong or doing business in Hong Kong, feel free to contact us at catcherbiz@outlook.com, cheers.