After being stuck behind closed borders for three years, Hong Kongers have been flocking north to Guangdong to spend money since the end of the pandemic in the first half of the year. Border control points are especially crowded during weekends and holidays.
Subsequently, popular Chinese food and beverage (F&B) brands swiftly announced their entry into Hong Kong in the second half of this year, with several more looking to jump on the bandwagon.
Famous restaurants popping up
After the Mid-Autumn Festival and National Day holidays in China, Hunan restaurant chain Nong Geng Ji (农耕记) opened its first branch in Hong Kong’s Kowloon, with a store size spanning 5,500 square feet.
A friend of mine who is fond of Hunan cuisine visited the restaurant recently upon hearing the news. He shared that business was brisk at the restaurant that night and it was already fully packed by 7 pm. Apart from locals, mainlanders studying or working in Hong Kong were also dining there. After seeing the long waiting time, my friend reluctantly ate at another restaurant, but he vowed to return later.
Nong Geng Ji is just one of many famous mainland Chinese restaurants that have opened branches in Hong Kong this year. In early September, Yang Guo Fu (杨国福), China’s leading mala tang (麻辣烫, a spicy soup dish) chain, opened a branch in Hong Kong’s Central district. That same month, popular mainland Chinese barbecue restaurant Xita Laotaitai (西塔老太太) also opened for business in Tsim Sha Tsui.
... mainland Chinese restaurants hope to use Hong Kong as a platform to enhance their popularity and in turn, enter the overseas market. This situation is similar to that of two decades ago.
Touted as mainland China’s famed breakfast place, Sanjin Tangbao (三津汤包) quickly hopped on the bandwagon and opened a branch in Maxgrand Plaza in San Po Kong around the second half of September. It held giveaway promotions for several days, attracting lines of Hong Kongers.
Hong Kong media reported that several other famous mainland Chinese restaurants are also planning to open branches in Hong Kong soon, including Shenzhen’s Tai Er Sauerkraut Fish (太二酸菜鱼), which is set to begin operations in Hong Kong in the latter half of the year. Bao Caisheng, founder of Bao’s Pastry (鲍师傅糕点), which went viral on Chinese social media earlier, recently revealed that he will open his first Hong Kong branch in the first half of next year, much to the delight of Hong Kong foodies.
The main source of revenue for these mainland Chinese F&B brands has always come from the mainland. Industry insiders analysed that these restaurants’ en-masse entry into Hong Kong this year not only shows their optimism about the Hong Kong market but also more importantly that they value Hong Kong’s stellar international position.
Indeed, mainland Chinese restaurants hope to use Hong Kong as a platform to enhance their popularity and in turn, enter the overseas market. This situation is similar to that of two decades ago.
In the early stages after Hong Kong’s handover in 1997, Hong Kongers enjoyed heading north to try mainland Chinese delicacies, with Shenzhen’s Luohu and Dongmen becoming popular food paradises for Hong Kongers at one point. When the SARS outbreak in 2003 affected Hong Kong’s economy, Beijing authorities announced the Individual Visit Scheme, which allowed travellers from mainland China to visit Hong Kong and Macau on an individual basis.
Many famous mainland Chinese restaurants, such as Tanyoto (谭鱼头), Little Sheep (小肥羊), Dong Lai Shun (东来顺) and Shanghai Min (小南国), seized the opportunity and went south to expand their markets and gain popularity.
These restaurants were already well known in the mainland and had branches all around, thus they were able to quickly make a name for themselves in the Hong Kong F&B industry.
The wave of mainland Chinese F&B brands setting up shop in Hong Kong was short-lived, with several restaurants subsequently exiting the market.
For example, business at Inner Mongolia’s Little Sheep was so good when it just opened in Hong Kong, people had to make reservations more than a week in advance to dine at the restaurant famous for its flavourful hotpot soup base that does not need additional sauces.
I recall that some of my friends who were more familiar with Hong Kong-style hotpot became hooked on Little Sheep upon trying it, and would eat it every month. Little Sheep came to Hong Kong in 2004, remarkably peaking in 2008 when it was listed on the Hong Kong Stock Exchange.
With many well-known mainland restaurants setting up shop in Hong Kong, cuisines from all over the mainland began to occupy the dining tables of Hong Kongers. Cuisines from different provinces became increasingly widespread in Hong Kong. In the past decade or so, the palates of Hong Kongers have become more diverse; some Hong Kong-style restaurants even began incorporating the flavours and cooking methods of mainland dishes into their own.
But good times don’t last forever. The wave of mainland Chinese F&B brands setting up shop in Hong Kong was short-lived, with several restaurants subsequently exiting the market.
These well-known mainland restaurants were unable to strike big in Hong Kong, and even saw their business shrink. One reason was the high cost of rent.
For example, Sichuan’s Tanyoto entered the Hong Kong F&B market in 2003. It was the first to set off a trend for mainland hot pot in Hong Kong, and had six branches at its peak. However, its popularity gradually declined thereafter. By 2014, the last remaining store at Wan Chai suddenly announced that it was shuttering, leading employees to rally at the labour department clamouring for the salaries owed to them.
Expensive and competitive market
These well-known mainland restaurants were unable to strike big in Hong Kong, and even saw their business shrink. One reason was the high cost of rent. Rent and employee salaries in Hong Kong are higher compared with the mainland, and thus the restaurant prices also had to be pegged higher.
For example, every 500 grams of food at Yang Guo Fu costs HK$99 (US$13), thus netizens have conferred the restaurant the title of “the most expensive mala tang in history”. Some Hong Kongers would rather make a trip to dine at the Shenzhen branch — not only is it significantly cheaper, but the service is good as well.
Many mainland restaurants found it increasingly difficult to keep their business afloat in Hong Kong and eventually chose to exit the market.
Of course, another even more crucial factor is Hong Kong’s saturated F&B market and the stiff competition. Despite its small size, Hong Kong has a huge F&B market with nearly 30,000 restaurants.
Due to the extremely competitive market, overseas F&B brands must stand out from the crowd in order to stake a claim in the Hong Kong market.
Besides the traditional Hong Kong teahouses and restaurants, restaurants serving Western and Japanese cuisines also have a standing in the market. Hong Kong is the second largest market for the export of Japanese agricultural and fishery products. Japanese restaurants have long been popular with Hong Kongers, with several popular stores setting up branches in Hong Kong.
Over time, Hong Kong has also become a gastronomic paradise, where one can easily sample the world’s fare.
Due to the extremely competitive market, overseas F&B brands must stand out from the crowd in order to stake a claim in the Hong Kong market. For brands looking to make a name for themselves in Hong Kong, this is an extremely tall order. Only time will tell how long this recent wave of Chinese F&B brands entering the Hong Kong market will last.
This article was first published in Lianhe Zaobao as “中国餐饮品牌进军香港蔚然成风”.
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