Hong Kong, the Pearl of the Orient, attracts the attention of entrepreneurs from all over the world with its unique business ecosystem. As a bridge connecting mainland China with the international market, Hong Kong has a highly internationalized business environment, a sound legal system and free capital flows. These advantages make it one of the most attractive business centers in Asia.
The Hong Kong IPO market was active in the first quarter of 2025, with the number of new shares increasing by 25% year-on-year and the amount of financing soaring by 287%, which fully demonstrated the confidence of international investors in the Hong Kong market.
However, the Hong Kong market also faces unique challenges. The city has a high cost of living, commercial rents are among the highest in the world, and competition for human resources is fierce. At the same time, Hong Kong consumers are known for being picky and diverse. They pursue the quality assurance of international brands while paying attention to the intimacy of local culture.
According to NielsenIQ’s 2025 Business Opportunities Guide, Hong Kong consumers are becoming more “conscious” and no longer blindly follow trends, but make purchasing decisions based on personal values and actual needs. This change in consumer behavior requires companies to grasp the pulse of the market more accurately.
Faced with such a market environment, entrepreneurs and business owners need to formulate clear market entry strategies. Traditionally, market entry strategies can be divided into two categories: “follow the trend” and “innovation”. Each strategy has its applicable scenarios and implementation points.
“Follow the trend” strategy: Finding breakthroughs in mature markets
In Hong Kong’s highly competitive business environment, the “follow the trend” strategy is often seen by start-ups and SMEs as an effective way to reduce risks. The essence of this strategy is not simple imitation, but is based on in-depth analysis and optimization of existing successful models in the market. In particular, as a mature consumer market, many industries in Hong Kong have already formed stable business models, which provides a wealth of reference cases for “followers”.
● The obvious advantages of the “follow the trend” strategy
① Significantly reduce the cost of trial and error: Entrepreneurs do not need to cultivate market awareness from scratch, but can directly enter a proven demand area.
② Learn from the experience and lessons of pioneers: By observing the operating models, pricing strategies, marketing techniques and customer service of existing operators in the market, latecomers can avoid repeating the same mistakes and directly adopt the most effective business practices.
③ Cost control: When entrepreneurs enter a mature market, the supply chain, human resources and marketing channels have often formed economies of scale, which enables new entrants to obtain necessary resources at a relatively low cost.
● Potential risks and solutions of “follow the trend” strategy
However, “following the trend” is by no means the same as simple imitation. In a fiercely competitive market like Hong Kong, it is difficult for “followers” who lack differentiation to stand out. Entrepreneurs must be aware that even seemingly mature markets are full of hidden traps and competitive barriers.
1. Market Saturation: When an industry already has a large number of competitors, new entrants may face fierce price wars and thin profit margins.
2. Sustainability of trends: The boom in some industries may be short-lived, especially in a fast-changing market like Hong Kong. Entrepreneurs need to carefully evaluate whether the target industry is a long-term business or a short-term trend.
To succeed in a “me-too” world, entrepreneurs must find a unique value proposition, which can be achieved through:
Segmented market positioning: Find specific customer groups that have not been fully served under the general industry trend. ·
Experience upgrade: Provide a better customer experience than existing competitors, whether through more personalized service, a more convenient purchasing process, or a more unique store design.
Technology empowerment: Using the latest technology to improve operational efficiency or customer experience. ·
Cross-border integration: combining elements from different industries to create new experiences.
Honik believes that a successful “follow the trend” strategy needs to be based on in-depth market analysis and precise brand positioning. By analyzing consumer profiles, building corporate brand growth plans, integrating and planning brand communication strategies, and then introducing data analysis and digital tools, companies can establish their own unique competitive advantages while following major trends.
Innovation strategy: exploring the blue ocean of Hong Kong market
In contrast to the “follow the trend” strategy, the “innovation” strategy represents a more aggressive way of entering the market – not following existing trends, but creating new market demand or completely changing the rules of the game in the industry. In Hong Kong’s highly saturated market, true innovation often brings extraordinary returns, but is also accompanied by higher risks and uncertainties. Entrepreneurs who choose this path need to have keen market insight, firm execution capabilities, and the financial strength to bear the initial market education costs.
● Competitive advantage of innovative strategies
The most attractive thing about innovation strategy is the first-mover advantage it brings. When successful in creating a new market or redefining an existing one, the innovator can enjoy limited competitive pressure for a considerable period of time. Deloitte China’s report pointed out that AI investment in 2025 will mainly focus on two directions: AI infrastructure and AI+ enabled applications. Those companies that can take the lead in achieving breakthroughs in these areas will gain significant market advantages.
Innovators also have a head start in setting industry standards and building customer loyalty. In a market like Hong Kong where brand loyalty is high, the first brand to meet a certain demand can often maintain its leading position for a long time. According to FIMMICK’s “6 Major Trends in Hong Kong’s Digital Marketing Market in 2025”, Threads, as an emerging social platform, is in the user growth stage. If brands can make early arrangements, they will be able to obtain higher natural reach and interaction rates, which is the early dividend that innovators can obtain.
From a financial perspective, the profit margins following successful innovation are usually more substantial. In the absence of direct comparisons, consumers tend to be less price sensitive, allowing innovators to set higher price points initially. NielsenIQ’s report shows that in the technology and durable goods sector, sales of high-priced smartphones will increase by 17% in 2023 compared with economy phones, while sales of economy phones will decrease by 32%, indicating that consumers are willing to pay a premium for real innovation.
● Challenges in implementing innovative strategies
However, the road to innovation is never smooth, and implementing innovation strategies in the Hong Kong market faces a series of unique challenges. The most obvious is the high cost of market education. Innovators not only have to market a product or service, they also need to educate the market about its value proposition.
Resource requirements are another major challenge. Compared with the follow-the-bandwagon strategy, innovation usually requires more upfront investment, whether in R&D, market education or infrastructure construction. This can pose a significant barrier for SMEs and startups with limited funding.
Innovators also face the risk of being imitated. Competitors in the Hong Kong market tend to respond quickly to emerging trends, and once an innovation proves successful, followers will soon enter the market. These followers may have more resources and more mature sales networks and can quickly erode the innovator’s market share.
In a complex and ever-changing market environment like Hong Kong, pure “follow the trend” or “innovation” strategies may face limitations. The most successful companies often find the best balance between the two – injecting innovation elements into a solid business foundation, or building innovation on proven market needs. This hybrid strategy reduces risk while maintaining competitive advantage, and is particularly suitable for Hong Kong, a diverse market that is both conservative and open to change.
HONIK and Hong Kong Web Group (http://hkweb.com.hk) have joined hands to build new infrastructure to support entrepreneurship, and to construct a full-link service system from the brand strategy level to the execution level. With “brand genetic engineering” as the core, we assist entrepreneurs to complete brand positioning calibration, consumer profile drawing, growth path planning and communication strategy design; and then through the deep integration of data middle platform and intelligent tools, we realize closed-loop management from strategy formulation to implementation. This not only builds the infrastructure for digital survival for entrepreneurs, but also creates a new model of symbiosis between brand value creation and social services.
