This is the second post, from a trio of posts, I’ve written about Hong Kong as a startup hub with a Dutch angle. This post will highlight the logistics part of Hong Kong.
By Jeffrey Broer
The similarities between The Netherlands and Hong Kong pre-date startups. Hong Kong is a strong logistical center, it operates a big container port (4th globally), in addition to being in driving distance of the port of Guangzhou (8th globally), and Shenzhen (3rd globally). These 3 ports are situated in the Pearl River Delta. The three combined handled 58.8 million TEU in 2013.
The Netherlands has been the Pearl River Delta of Europe, a de facto port of Europe. Even though Rotterdam only did 11.7 million TEU’s (container traffic) in 2013. This just goes to show that logistics wise, Hong Kong has a vast history in shipping and distribution.
Hong Kong is full of condensed narrow streets (most dense commercial and residential area on planet Earth!), hence micro-distribution is crucial to the city. Many small independent vans swarm the city on a daily basis. From supplying local stores, to grocery delivery (almost every supermarket can home delivery the goods you just bought for a few extra dollars). In a city with a low car ownership this is a thriving business. This is all not including the obvious: the vans are also used for moving larger stuff.
From phones to vans
Hong Kong used to be a phone only business (with all language issues included). That market is being disrupted by on-demand van booking startups in the last two years.
Startups in many colors and levels like Floship, GogoVan, Easyvan, Easyship, Aftership (A Startup Weekend Hong Kong winner), Openport, etc. are working hard to optimize distribution and logistics and leverage Hong Kong’s advantages.
Christopher Moore, Digital Marketing at Floship, a logistics company that gives smaller ecommerce sellers the same advantages that large companies have gained from a centralized shipping model, says about Hong Kong:
“The main advantage of Hong Kong as a shipping centre is simple: Hong Kong is the world’s biggest air freight hub. This means that delivering goods anywhere in the world from warehouses based in Hong Kong can be as quick as overnight.”
Where it comes to comparing Hong Kong with other cities, he continues:
“It’s difficult to compare Hong Kong to any place else in the world, because here you have a duty free port favourable to trade. Even more, within hundred miles of Hong Kong 10 percent of all consumers goods in the world are produced. Not to mention the city’s proximity to Shenzhen, which is just across the border, the epicentre of the hardware production of the greater area of Guangdong province. You can find manufacturers for just about anything.”
Max Ward, CEO of Openport, which solves the logistics headaches of global brands with distribution in emerging markets through a platform and app, says:
“The talent pool is great in Hong Kong, there is an abundant source of logistics talent. If talent isn’t available, it isn’t hard to get them to Hong Kong, compared to for instance Burma. Hong Kong has also a rule of law, some South East Asian countries don’t. This really matters when the parent company is raising funds or is going for an IPO. Hong Kong is also a great place for conferences. China is on your doorstep. And there are still a lot of opportunities for startups in optimizing the last mile. The only thing you have to keep an eye on in Hong Kong are the costs.”
Hong Kong is a multi market hub for Asia and the rest of the world, logistics-wise everything is available. And as the incumbents are consolidating, the market will be open for agile and smart startups.
Take the B2B accelerator from Blueprint (From Swire), help for logistics startups is also available.
So are you a logistics startup and looking where to start or expand? Keep Hong Kong in mind as a place to set up shop.
Jeffrey Broer is a Dutch entrepreneur based in Hong Kong. He’s an early stage startups mentor, advisor and angel investor. He’s also mentor at Amplifi, an India-based SaaS accelerator. This post originally appeared on his blog. Follow him on Twitter.
Picture by Jim Winstead (creative commons via Flickr)