11 September 2013
Products by DONNA Cooperation, a Hong Kong-based OEM company specialising in high-end cookware
Consistency and reliability are important commercial traits, according to Sylvia Schroll-Machl, author of Doing Business with Germans. Her observation is bourne out by the development of Germany’s business community in Hong Kong over the last decades. Many of the 3,000 or so German expatriates in the city are involved in trading or manufacturing.
"The presence of the German community here has always been very stable," says Wolfgang Ehmann, Executive Director of the German Industry and Commerce, a member of the AHK German Chambers of Commerce Worldwide Network, which helps promote bilateral trade and investment between Germany and Hong Kong. "German companies tend to look at the longer term and consider their investment carefully. Once they decide to do something, they stick to their guns."
Germany is Hong Kong’s most important trading partner in Europe, with the majority of goods comprising re-exports to and from the Chinese mainland. According to the German Federal Statistical Office, German exports to Hong Kong in 2012 were worth about US$7.3 billion. These goods were mainly machinery, food, luxury goods, including cars, and electrical and electronic goods.
Hong Kong is the gateway to the mainland and the rest of Asia for the 550 German companies and representative offices that have set up in Hong Kong. In 2012, German imports from Hong Kong amounted to about US$2.1 billion, down 13 per cent over the previous year. According to Mr Ehmann, the fall was due in large part to weakening demand in Europe and is not indicative of a downward trend in Hong Kong-German trade relations.
Tobi Doeringer runs eight companies, including a trading house and a firm that manufactures and distributes luggage
"Statistics are a tricky part. I would tackle the issue from the overall economic relations between Hong Kong and Germany, including the presence of German corporations and individuals and the German business community over the last 10 years. There have been ups and downs, but overall relations look pretty stable," Mr Ehmann says. "It seems the role of Hong Kong as a trading hub for moving goods in and out of Hong Kong from China and other destinations is still very valid for German companies here."
Best Place for Business
German entrepreneur Tobi Doeringer confirms this view. "Hong Kong is the best place in the world to do business. It is very easy to set up business here, and you don't have to travel a lot because everybody who has an international business has to come to Hong Kong," says the longtime Hong Kong resident. "The city has become more accessible for businesses. Twenty years ago, if you flew to a place, it cost you a lot of money. But today the world is getting smaller; and Hong Kong, as the gateway to China, has become a lot more accessible."
Mr Doeringer started his IT business two years after coming to Hong Kong in 1996 at age 23. His entrepreneurial portfolio has vastly expanded since. Today, his Hong Kong-based holding company, Vabella, runs eight companies, including a trading house and a firm that manufactures and distributes luggage. He is also keen to make Hong Kong attractive to young Germans, including interns from his alma mater WHU – Otto Beisheim School of Management in Germany.
"The university has an overseas management course. When the students come to Hong Kong, I would help bring them closer to the business sector here and teach them a little about Hong Kong and China. I try to make it more interesting for them to come here to work in the future. Most of them love Hong Kong and would want to come back."
Alexander Kaymer is a founder of Kayro Solutions, a Hong Kong-based business consultancy firm
Alexander Kaymer, who grew up in Dortmund and went to university in Frankfurt and Australia, arrived in Hong Kong in 2006. A qualified lawyer, he came to Hong Kong to join a business consultancy firm. In 2010, he co-founded Kayro Solutions, a business consultancy based in Hong Kong. He also joined DONNA Cooperation. The OEM company specialises in the high-end cookware manufacturing of three brands owned by German manufacturer Josef Schulte-Ufer KG.
Mr Kaymer says a strong network of foreign clients based in the city is crucial to the success of an OEM business.
"Our products are manufactured in our factories in Guangdong and Ningbo. Our key customers, including those in Europe and North America, have Hong Kong offices,” says Mr Kaymer. “I am 100 per cent sure that if DONNA doesn't operate in Hong Kong, its business would not be as successful. Being an OEM company, we provide services, arrange meetings, all at our clients' convenience. That is what they are looking for," Mr Kaymer says. "Other advantages of Hong Kong include its business infrastructure, English being a widely used language, and the tax-friendly environment, which is not like mainland China, where the tax code is unpredictable."
According to Mr Ehmann, the less experienced or less informed German companies that want to tap the Chinese market tend to set up their business on the mainland, only to discover the business advantages of Hong Kong later. "For small companies, I think they would be better off starting in Hong Kong than on the mainland,” he said. “Of course, it has to depend on what they want to do, but they will have a much easier time here because it is an easy place for foreigners to adapt to."
Still, cultural issues, including the "German straightforwardness," may not sit well with local business practices, says Mr Doeringer. "In Hong Kong and China, it takes a few hours or days for people to make a decision, while the Germans want decisions straight away. They are too direct and straightforward, but I think a lot of locals appreciate that as well. Now I sometimes have problems communicating with Europeans because I've been in Hong Kong too long. I would try to tell them things in a nice way and only get very direct after a few emails."
Another cultural difference lies in the famed German precision. "The Germans are very detail-oriented,” says Mr Kaymer. “In our factories, if we are to make 30,000 pots, it can be challenging to make the local workers understand that we want to maintain the quality from the first pot to the last one on exactly the same level. For us, this is common sense, but for our factory workers, it's a different picture. I can understand that can be frustrating. But the issue can be overcome by close supervision."
As for Hong Kong, Mr Kaymer believes the city can do more to promote itself overseas. “Many people abroad don't really get to know Hong Kong's advantages. Many German companies still think that they have to go to China in order to do business there. That is a shame."
- Business Management & Consultancy
- Hong Kong
- Western Europe