The Greater Bay Area is the Chinese government’s master plan for Hong Kong, Macau, and nine cities in Guangdong Province, with an aim to build a business and technology hub.
The scheme brought excitement to many startups in Hong Kong as they look forward to the benefits of being a part of a vast market of 70 million people.
The Hong Kong Economic Journal recently sat down with two entrepreneurs, ISTOP founder Tyler Mok and Koofy co-founder Ondy Ma, who shared their views about the opportunities in the Greater Bay Area and the challenge of doing business amid cultural differences.
HKEJ: First, I would like to talk to Tyler. We know that you are running a family business in mainland China, and as the head of Hong Kong Young Entrepreneur Association, do you think it’s a good time for Hong Kong startups to enter the mainland market?
Mok: Considering its complementary policy measures, as well as the investment prospects in general, I think the Greater Bay Area is a once-in-a-century opportunity for startups in Hong Kong. Although the mainland startups possess certain advantages in terms of human resources, I think the strength of Hong Kong startups lies in their ability to innovate and their global vision for business.
For startups that have the ambition to enter the Greater Bay Area, I suggest they approach by seeking projects and products that are scarce in the domestic market there. Take health foods, medicines and care products. In these categories, products from Hong Kong brands can give mainland consumers greater confidence.
At the beginning of the business, ISTOP mainly engaged in commercial, hotel, and real estate businesses, and it now focuses on introducing Hong Kong health foods to the mainland market.
Q: How about you, Ondy? As the co-founder of electric skateboard brand Koofy, how did you enter the mainland market?
Ma: Before the launch of the first generation of electric skateboards in the mainland, we found several product testing platforms via Baidu’s search engine. As we published our product information on those platforms, about 20 to 30 people showed interest in joining the product test, and we got a very positive response.
One thing to note is that we’ve got plenty of talents in Hong Kong startups, but there is a lack of product testing channels in the city.
I think that the strength of the Greater Bay Area lies in the complementarity effect between the cities. With Hong Kong’s talents in finance, technology, and logistics, supported by the supply chain in the Greater Bay Area region, the development process of new products can speed up.
Take our electric skateboards as an example. During the process, when we have some new ideas, say new features to add, or amendments to the product design, we can contact the manufacturer in the mainland and execute the modification swiftly, which definitely boosts the product development.
Q: Is it necessary to possess a local network to start a business in the mainland? For those Hong Kong startups who don’t have connections in the mainland, any advice from you?
Mok: No matter where you go to start a business, connections are a must. If you do not have contacts with figures in the local government or the business sector before entering the Greater Bay Area market, you are likely to have a rough start. But of course there are industry groups and associations there to help and support.
Last year, we worked with a number of municipal governments in the Greater Bay Area to set up an overseas youth federation in the area.
Currently, we have more than 800 members from more than 50 countries. Through the platform of the association, startups can first get to know figures and professionals in various sectors in the area, and extend their social network, in order to know more about the policies and business opportunities in the Greater Bay Area.
Ma: Based on my experience, startups really need connections for raising funds, seeking supply chain partners, as well as finding talents in the mainland market. We, as an incubatee at the Hong Kong Science and Technology Park (HKSTP), are supported by its efforts to promote us in the media and the tech community in the region.
Besides, we are also given opportunities to visit several cities in the Greater Bay Area, such as Guangzhou, Zhongshan, and Dongguan, meeting with local businessmen, government officials and venture capitalists.
Q: Just curious, how much money do you think Hong Kong entrepreneurs need to start a business in the Greater Bay Area? Would HK$100,000 be enough?
Mok: Like a seed capital, I think it is enough to set aside HK$100,000 to start a business in the Greater Bay Area. One thing to be aware of is that the legal system, different from that of Hong Kong, still needs optimization.
Laws in the mainland give priority to the protection of the rights of consumers and workers. Moreover, Hong Kong startups entering the Greater Bay Area need careful risk assessment and management with regard to partners and counterparties.
Ma: As an entrepreneur of a hardware startup, I would recommend that Hong Kong startups spend sufficient capital on registering their patents and copyrights when they are entering the mainland market. As long as they find the right investors, the seed funding round is likely to reach HK$1 million to HK$2 million, which the startup can use that as initial capital.
However, it is also necessary for them to plan for the worst. If you are unable to nail a funding round after going around the area for, say, three months, or meeting with about 100 investors, it’s time for you to change your idea and start again.
Persistence has a lot to do with your success in business.
This article appeared in the Hong Kong Economic Journal on March 8
Translation by Ben Ng
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