Market Potential of Baby Food Products in Hong Kong and New Zealand

This report analyzes the market potential of B-Health, an Australian company that specializes in producing and exporting baby food products. The report provides a summary of the economic, political, and business environments in New Zealand and Hong Kong, highlighting their differences and similarities. It notes that Hong Kong lacks natural resources and has a high demand for baby food products, making it an attractive market for B-Health. Additionally, the report highlights the importance of considering corruption, trade, and FDI (foreign direct investment) when doing business in these countries.

Global Business
Name of the student:
Name of the University:
Author’s Note:

Table of Contents
Introduction................................................................................................................................3
Economic Environment..............................................................................................................4
New Zealand..........................................................................................................................4
Hong Kong.............................................................................................................................5
Political Environment.................................................................................................................7
New Zealand..........................................................................................................................7
Hong Kong.............................................................................................................................7
Business Environment................................................................................................................7
New Zealand..........................................................................................................................7
Hong Kong.............................................................................................................................8
Market Potential.....................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

Introduction
The score of economic freedom in New Zealand is 84.4, and it is considered to be the
third freest country in the index of 2018. The overall score of the free economic index has
increased by 0.2 points while scoring the scores which is higher in the valuation of the
freedom of trade and freedom of labour which has reduced in the effectiveness of the
judiciary and freedom of the money.
The score of economic freedom in Hong Kong is 90.2, and the score of the free
economic index has not changed from the 2019 index. There is no such competition in the
business industry and is considered to be one of the most resilient economies. The combined
market value of the imports and export is moreover equal to 375.1 per cent of Gross
Domestic Product.
In New Zealand, the sector for the baby food product has reached 27.2 per cent in
terms of value between the year 2010 and 2016. In Hong Kong, there has been a decline in
the baby food products which accentuated to 16 per cent lower than in the year 2012.
Body

Economic Environment
New Zealand
In the year 2018, the rate of growth of Gross Domestic Product in New Zealand was
3.1 per cent and which is quite expected to stay at a very same rate in the year 2019 for 3 per
cent and 2020 for 3.1 per cent. To boost the Gross Domestic Product of its country the
country mostly relies on the power of consumption. Although the rate of interest is low and
there is a huge growth of the economy in New Zealand due to the rate of decline in the
unemployment level (“New Zealand Economy: Population, GDP, Inflation, Business, Trade,
FDI, Corruption”, 2019). New Zealand has good proximity to Australia, Hong Kong, and
Asia and due to this reason the agricultural and tourism industry has created a strong ground
to make the economy of New Zealand strong and rigid.
Main Indicators 2016 2017 2018 2019 2020
GDP (billions USD) 185.37 201.39e 206.00 212.15 227.38
GDP (Constant
Prices, Annual %
Change)
4.1 3.0e 3.1 3.0 3.1
GDP per
Capita (USD)
39,049 41,572 41,616 42,009 44,208
General
Government
Balance (in % of
GDP)
1.3 1.4 0.9 1.0 1.3
General
Government
Gross Debt (in
33.5 31.7 30.4 29.4 28.4

% of GDP)
Inflation
Rate (%)
0.6 1.9 1.4 1.7 1.9
Unemploymen
t Rate (% of the
Labour Force)
5.1 4.7 4.5 4.4 4.4
Current
Account (billions
USD)
-4.17 -5.47 -7.35 -8.10 -8.62
Current
Account (in % of
GDP)
-2.3 -2.7 -3.6 -3.8 -3.8
Where ‘e’ is estimated data
(Source: “New Zealand Economy: Population, GDP, Inflation, Business, Trade, FDI,
Corruption”, 2019)
Hong Kong
The economy of Hong Kong has increased by 1.3 per cent in the annual term in the
fourth quarter of 2018. The rate of growth of Gross Domestic Product of Hong Kong was 3
per cent which is more than the last decade for over 2.8 per cent. Hong Kong is considered to
be one of the freest economies in the world. This country is oriented in providing its services
to the economy with the service sector resulting in more than ninety per cent of Gross
Domestic Product ("Hong Kong Economy: Population, Facts, GDP, Business, Trade,
Inflation", 2019).
Major Economic Indicators in Hong Kong

2017 2018 2019
Gross Domestic
Product (US $ bn)
341.4 364.8
GDP Per Capita (US
$)
46180 48958
Population, Mid-year
(mn)
7.39 7.45 7.48
Rate of
unemployment ( per
cent)
3.1 2.8
Inflation ( per cent
change in Composite
CPI)
+1.5 +2.4 +2.3
The real growth of
the Gross Domestic
Product (per cent)
+3.8 +3.0
Number of visitors
(mn)
58.5 65.1 6.8
Visitor Arrivals
Growth (per cent)
+3.2 +11.4 +27.2
Retail Sales Growth +2.2 +8.7 +7.1
("Economic and political outline Hong Kong - Santandertrade.com", 2019)

Political Environment
New Zealand
New Zealand enjoys a democratic political environment based on the Parliament and
a constitution forward by Queen Elizabeth II who is the Queen of New Zealand. The country
shares cultural, political and legal heritage with the United Kingdom. Any issue of taking
bribes and any other practice of corruption is criminalized both in the United Kingdom and
New Zealand ("Baby Food Manufacturing – Australia Industry Report | IBISWorld", 2019).
The report present by Transparency International's 2016 Corruption Perceptions Index
suggests that New Zealand is the least corrupted country. Another survey by the World
Bank's Ease of Doing Business ranked New Zealand as the top country on the performance of
the business (Research, Food, Trends & 2017, 2019).
Hong Kong
The status of Hong Kong is defined by the general law which is adopted by the
National People's Assembly of China in the year 1990. Hong Kong is considered to be under
Special Administrative Region or SAR of the People's Republic of China. This basic law
serves Hong Kong as a constitution of the land, and this land has a political scope of "one
country, two systems". Even in Hong Kong, the practice of bribery and Corruption is illegal,
and these acts are penalized by the Independent Commission Against Corruption, Hong Kong
("Economic and Trade Information on Hong Kong | HKTDC", 2019).
Business Environment
New Zealand
There are several rules in accounting, taxation, intellectual property and the standards
of performing business in New Zealand ("Overseas Business Risk – New Zealand", 2019).
The accounting standard is based on the Generally Accepted Accounting Practice which is

also known as GAAP which includes the formulation of cash flow statement, balance sheet
statement, income and expenditure account, profit and loss account, etc. The corporate tax
rate in New Zealand is 28 per cent, and the same percentage of tax is levied on the company
those are outside this country ("Business environment in New Zealand -
Santandertrade.com", 2019).
Hong Kong
Hong Kong is ranked as the 5th largest trading nations in the world. Around ninety per cent of
manufacturing output in Hong Kong is exported to other countries. But the country lacks
natural resources and which is why Hong Kong has to import several products from other
countries. As Hong Kong is considered to be an economy of free trade, therefore it has
private sectors with non-intervention standards and policies from the administration and
government ("Economic and political outline Hong Kong - Santandertrade.com", 2019).
Market Potential
Since last five years, the industry for baby food manufacturing has created a huge
demand over the baby food products that are with added nutrients and products which are
organic. The operators in the industry of the baby food markets have created a demand for
these products both in the regional and international markets. There is a rigid demand of these
baby food products in the overseas market especially in Asia, and for this reason, the baby
food products produced in Australia has seen a high rate of growth in the baby food
manufacturing industry. The Industry Value Added or IVA, which is the measurement of the
contribution of the industry to the economy as a whole so as to forecast the growth of a final
1.8 per cent over the ten years through the year 2023-24. This report shows that there is an
underperformance which is related to the growth of the Gross Domestic Product in an
economy which is formulated around 2.7 per cent over the same year. The new and
innovative product development has been strong mainly with the product which is usually a

nutrient added organic based food product while manufacturing the efficient fresh elements
and to add more fresh nutrients to the product.
Conclusion
This reported is provided to analyse B-Health which is a firm based in Queensland,
Australia and mainly specialises in the production and export of baby food products. The
report has been presented with the analysis of the potentiality in the market of the food
product of the same company which is to be presented to the customers based in New
Zealand and Hong Kong. The discussion of the economic, political, and business
environment has been provided in this report to show that which country is in need for this
product and the sales of these products will be viable in which of these two countries. Now,
as per as the proceedings of the report B-Health is liable to open its business in Hong Kong,
as it is mentioned that the county does not have any sort of natural resources to the
production of nutrients and food-based products is very low in this country but the demand
for baby food products is very high. Finally, the weighted index is provided to comply with
the market value of the product in Hong Kong.

References
New Zealand Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption.
(2019). Retrieved from https://www.heritage.org/index/country/newzealand
Hong Kong Economy: Population, Facts, GDP, Business, Trade, Inflation. (2019). Retrieved
from https://www.heritage.org/index/country/hongkong
Baby Food Manufacturing – Australia Industry Report | IBISWorld. (2019). Retrieved from
https://www.ibisworld.com.au/industry-trends/specialised-market-research-reports/consumer-
goods-services/baby-food-manufacturing.html
Research, M., Food, P., Trends, B., & 2017, T. (2019). The Baby Food Sector in New
Zealand in 2017. Retrieved from https://www.reportlinker.com/p05227069/The-Baby-Food-
Sector-in-New-Zealand.html
Overseas Business Risk – New Zealand. (2019). Retrieved from
https://www.gov.uk/government/publications/overseas-business-risk-new-zealand/overseas-
business-risk-new-zealand
Economic and Trade Information on Hong Kong | HKTDC. (2019). Retrieved from
http://hong-kong-economy-research.hktdc.com/business-news/article/Market-Environment/
Economic-and-Trade-Information-on-Hong-Kong/etihk/en/1/1X000000/1X09OVUL.htm
Business environment in New Zealand - Santandertrade.com. (2019). Retrieved from
https://en.portal.santandertrade.com/establish-overseas/new-zealand/business-
environment#practices
Economic and political outline of Hong Kong - Santandertrade.com. (2019). Retrieved from
https://en.portal.santandertrade.com/analyse-markets/hong-kong/economic-political-outline