* Insignificant
​​​​​​​Source: Hong Kong Trade Statistics, Census and Statistics Department

After a small drawback in 2022, Hong Kong’s gifts and premiums exports saw a 15% year‑on‑year growth in 2023. Sales to most traditional markets such as the US, the EU, the UK and Switzerland also saw a decent growth in 2023, ranging from 2% to 35%. On the other hand, export performance to Asian markets like mainland China, Macao and Taiwan also recorded a solid growth.

In terms of products, performance varied across different categories in 2023. Fine jewellery and paintings, the two dominant categories in Hong Kong giftware, recorded significant export growth of 23% and 35% respectively. Conversely, battery‑powered non‑precious metal wristwatches, wheeled toys and dolls experienced a decline in exports, with decreases of 16% and 22% respectively during the same year.

Sales Channels

 

 Industry Trends

There is a trend towards consolidation of buyers and retail channels. In particular, large‑scale retail chains and mass merchants are minimising inventory and shortening delivery lead times in an effort to lower costs and business risks. Such developments will continue to pose a threat to smaller manufacturers, as giant retailers, doing their own direct sourcing, may tend to favour large suppliers. On the other hand, the rise of giant retailers has provided new opportunities for private labelled items.

Intense competition on price and increasing environmental awareness are prompting giftware manufacturers to explore more affordable and non‑polluting substitutes to traditional materials. Prominent examples include recyclable or renewable packaging materials. In addition, giftware firms are finding they need to turn out an increasing number of new models and designs in order to stay competitive.

Meanwhile, licensing is entering the home accessories market. According to industry sources in the US, there is good market potential in the licensing of decorative accessories. Licensed products based on familiar characters from movies or TV series are expected to remain popular. Hong Kong companies are in a good position to capitalise on this trend, as they are known for protecting clients’ interests with due respect for intellectual property rights.

As in other sectors, e‑commerce has emerged as an important sales channel for the gifts and premiums industry, a trend that is accelerating in the aftermath of the Covid‑19 pandemic. In the US, for example, online sales accounted for more than one‑third of the sales of apparel and accessories as well as toys and hobby items, two product categories which cover a great deal of giftware. The opportunity to sell directly to local and overseas consumers (D2C), is particularly important for manufacturers who offer the personalised gifts which global consumers increasingly desire.

CEPA Provisions

Under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), the mainland has given all products of Hong Kong origin, including giftware, tariff‑free treatment since 2006. This allows tariff savings up to 20%, compared to products with Most‑Favoured‑Nation (MFN) status. According to the stipulated procedures, products which have no existing CEPA rules of origin can enjoy tariff‑free treatment upon application by local manufacturers and upon the CEPA rules of origin being agreed and met.

The promulgated rules of origin allowing giftware products to benefit from CEPA's tariff preference are basically similar to the existing rules governing Hong Kong's exports of these products. Generally speaking, for the manufacturing of imitation jewellery, moulding and assembling ‑ identified as the principal processes for the purpose of determining origin ‑ must be done in Hong Kong. For giftware articles manufactured from paper, cutting, die‑pressing, wrapping and gluing must be done in Hong Kong. If rolling or forming are required after die‑pressing, such processes must be also done in Hong Kong. Detailed information is available here.

General Trade Measures Affecting Giftware Exports

Some trade measures, such as anti‑dumping charges, affect giftware products exported by Hong Kong companies. For example, certain paper‑made products, folding gift boxes and wax candles are subject to US anti‑dumping duties, while some ring binder mechanisms are charged against by the EU. These measures can affect Hong Kong companies as many of them manufacture on the mainland.

Product requirements have become more stringent in overseas markets, mainly in areas of product safety and environmental protection. For example, the EU’s Implementing Decision concerning harmonised toy safety standards in support of the Toy Safety Directive was announced in July 2019. In the US, meanwhile, the enactment of the Consumer Product Safety Improvement Act (CPSIA) poses a challenge to Hong Kong's toy exporters. Tightened lead limits, prohibitions on the use of certain phthalates and third‑party testing requirements are among the strengthened provisions contained in the CPSIA.

Safe and ethical working conditions have also increasingly been a concern among overseas buyers. A number of leading buyers such as Hasbro, Mattel, LEGO and Walmart require suppliers to meet high standards. The International Council of Toy Industries (ICTI), with the active involvement of Hong Kong toy makers, has introduced a Code of Business Practices and an associated supply chain programme known as the Ethical Toy Program (formerly CARE Process) for manufacturers, distributors and retailers of toys and related merchandise in member countries.

For health reasons, the EU has a directive controlling the use of nickel in objects intended for contact with the skin, such as watches and jewellery. In addition, the EU has prohibited trade in clothing, footwear and other textile and leather articles which contain azo‑dyes, from which aromatic amines might be derived. Separately, the National Candle Association has established a framework for quality control of candle and candle accessories, and has published international standards through the American Society for Testing and Materials (ASTM). These standards are not legally binding to outsiders and are only applicable to the US, but candles bearing the NCA quality mark may have a competitive edge.

Product Trends

Personalisation has emerged as a growing trend in the industry: As customers become more sophisticated and discerning, they seek unique gift items that cater to their individual preferences. In response to evolving customer demands, an increasing number of giftware traders now offer customised gift items tailored to personal specifications. These items may include monogrammed goods or “mix and match” assortments of themed or coloured accessories. Customers have the opportunity to create gifts items that reflect their own distinct style. Moreover, customizing gifts through configuration, on‑demand printing, engraving and more not only enhances the value of standard gifts but also helps brands differentiate themselves from other players in the market.

Corporate giveaways to boost sales: Corporate giveaways will continue to be an effective sales and marketing tool. Companies will look to distribute functional yet creative higher‑value premiums in the future, as target recipients are no longer impressed by lower‑value items. With more workers returning to office after a long period of working from home during Covid, back to office gifts ideas such as personalised office essentials or wellness gifts for workers would become thoughtful gifts ideas.

Innovative technological items: The prevalence of high‑tech gifts is a trend seen across the board. Examples include photo‑printing phone cases, smart watches and interactive dolls, as well as scanner mouses which can accurately convert printed text, tables and pictures into digital formats. Most recently, drones are becoming very popular gift items for both kids and adults. While new technologies such as artificial intelligence (AI), extended reality (XR) and mobile applications will continue to transform products and the industry, giftware manufacturers should be aware of the tightening of regulations on digital products in some markets, including the EU’s Artificial Intelligence Act, Radio Equipment Directive and Product Liability Directive.

Home products and festive items focusing on family values and connecting with others: A major trend is the popularity of so‑called "home products" and festive items, as consumers spend more time with family and friends at home. In step with this development, houseware, tools, DIY & home deco products will continue to be favoured gift items. Consumers also increasingly feel the need to reach out and communicate with others in traditional ways, such as sending hand‑written greeting cards and scrap‑booking.

More emphasis on well‑being and related products: There is a growing emphasis on well‑being and related products, driven by people’s increased concern for their health and well‑being since the Covid‑19 pandemic, both physically and mentally. Smartwatches and other gadgets that facilitate health data collection and evaluation have gained popularity. Additionally, fitness products like yoga mats are experiencing a rise in demand. Candles, fragrances and aromatic gifts are also sought after as ways to relieve stress, and their popularity has led to increased sales of items such as candle holders, fragrance oils and other accessories.

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[1] Since offshore trade has not been captured by ordinary trade figures, these numbers do not necessarily reflect the export business managed by Hong Kong companies.

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