China Market

Mainland China is a big market for many types of Hong Kong goods and services, and this survey attempts to find out whether this is the case with the interior design industry by asking companies if they have projects in China or have set up offices there. 55% of companies surveyed report to have no business presence in China, while 25% have projects on the Mainland, while a further 20% have set up branch offices there. Among those with headquarters/ offices in Mainland China, their Mainland business accounts for 32% of the companies’ total revenue, and employ an average of  6 HK office-employed permanent staff working in their Mainland China offices (including design, drafting, project management, etc.)

In addition to questionnaires, we have also held focus groups with interior design firm owners. According to these sessions, we found that of companies that have no business presence in China, many are mainly engaged in residential projects, while companies that have a more diversified business profile are more likely to be engaged in Mainland projects. Also, many companies that do not have business presence in China all recognize the business potential of the Mainland market and want to take on projects there, yet are unable to take advantage of it due to various reasons. For example, many interior design businesses are small companies in which the owner is also the chief designer. Developing businesses or supervising projects there would mean spending long periods of time away from Hong Kong, which many businesses cannot afford to do.

Furthermore, many company owners think that there are many barriers to entering the Chinese market, including the difficulty of finding clients and identifying suitable contractors to carry out projects. According to our questionnaire, many people find legal/policy issues, cultural difference, remittance and lack of business network to be the main barriers in entering the Chinese market.

Companies that already have projects in China face many difficulties. Many companies find communicating with local contractors to be problematic, particularly in smaller cities where business practices and lingo are very different from those in Hong Kong. Some business owners consider the different legal system in China difficult to handle, especially in relations to contractual disputes, and that the Hong Kong government does not provide any assistance. They feel that the standard contracts provided by clients tend to favor the client rather than the service provider. Also they commented that arrears in payment seem to be common with many Mainland clients, and although some companies try to protect themselves by arranging for payment during different stages of the projects, they sometimes found it difficult to receive the final payment.

Despite these barriers and difficulties, many practitioners find China to be a more creatively challenging and rewarding environment for interior designers in that the scale and variety of projects are often greater than those in Hong Kong. Furthermore, many Mainland clients tend to give more creative leeway to Hong Kong designers, allow them to apply more innovative ideas, and have bigger budgets compared to local projects.

Even though Hong Kong designers still enjoy an advantage on the Mainland due to their experience and exposure to international trends, many experienced designer foresee that the next generation will face increasingly stiff competition over their Mainland counterparts. With greater media exposure, upcoming interior designers in China have become more familiar with overseas trends. In addition, their skills including computer application and hand drawing are very strong, while their fees and salaries tend to be lower than Hong Kong designers.