On a Friday night in June, the bustling Tsim Sha Tsui district of Hong Kong was crowded, but Prince Beef Noodle Restaurant located in the center of the city’s top tourist and shopping destination was empty. Customers flocked to the newly opened He Fu Noodle Restaurant next door, a more stylish and spacious chain store from mainland China with similar prices to Prince Beef Noodle Restaurant.
Ms. Fung, a woman in her 40s working at Prince Beef Noodle Restaurant, told Nikkei Asia, “Since they opened last December, they have taken away half of our business because their mainland Chinese boss is financially strong and can afford top-notch decorations.”
He Fu Noodle Restaurant is one of the many mainland Chinese enterprises entering Hong Kong. In recent years, from pearl milk tea and chain restaurants to sportswear, electric cars, and gold suppliers, mainland Chinese companies have been setting up shop in every nook and cranny of Hong Kong. Even the Chinese e-commerce group Alibaba has opened physical stores in Hong Kong. These newcomers are reshaping the city’s commercial landscape, making Hong Kong increasingly resemble a mainland metropolis.
According to data from the Hong Kong Trade and Development Bureau, in 2024, the number of new mainland Chinese companies entering Hong Kong exceeded foreign-funded companies for the first time. A total of 273 mainland Chinese companies entered Hong Kong, covering technology and financial service companies, family offices, travel companies, and consumer brands, while the number of foreign-funded companies was 266. In comparison, in 2022, only 92 mainland Chinese companies opened stores in Hong Kong, less than half of the 208 foreign-funded companies.
The business models of these mainland companies are also changing Hong Kong’s ecosystem – entering markets with low prices and rapid expansion, leading to severe competition that often overwhelms their rivals.
Ms. Fung from Prince Beef Noodle Restaurant expressed her concern about competing with mainland chain stores, saying, “I don’t know how long we can hold on. We are really worried that if the losses continue, we may be forced to close.”
Not only small businesses but also major brands are facing similar challenges. Chinese food delivery giant Meituan entered Hong Kong in 2023 with the overseas brand Keeta, rapidly becoming a leading player in the Hong Kong food delivery industry with aggressive discount strategies that make it difficult for competitors to match. Deliveroo, a British platform that entered Hong Kong ten years ago, closed and left Hong Kong in March 2025.
The influx of mainland Chinese companies has changed the surface of Hong Kong, but behind that lies a deeper political transformation. Since the Chinese Communist Party enacted the so-called “National Security Law” in 2019, this city, once proud of its high degree of autonomy, has gradually lost its freedom.
Especially after the COVID pandemic, the vacancy rate in the Tsim Sha Tsui tourist area has soared. Prior to May, retail sales had been declining for 14 consecutive months. Due to the economic downturn in mainland China, Hong Kong’s reliance on mainland Chinese tourists has also led to reduced spending and downgrades in consumption.
Gary Ng, a senior economist at a French trade bank, pointed out that the Hong Kong government is increasingly leaning towards Beijing on security and economic issues, lacking the incentive to change course.
He noted that it is much easier for Hong Kong to attract mainland chain stores than foreign chain stores, and the presence of well-known Chinese brands can help improve the officials’ political performance.
However, Ng warned that once mainland Chinese brands increasingly dominate, it may in turn erode Hong Kong’s unique position.
“What can Hong Kong offer that is different from the mainland?” he asked.