Hungary is a particular (textile) market and port of entry to Eastern Europe

Hungary is a particular (textile) market and port of entry to Eastern Europe

A report by HKTC Hong Kong Trade Research shows that Hungary is not a large country with an extensive population, it is also not a big spender in CEE Central and Eastern Europe, but the country has a large appetite for Hong Kong products, also on a per capita basis

Small but with a profile

Often when talking of Hungary and its 10 million people, we think of a rather small pool of consumers. When looking at per capita imports, Hungary is by no means – for example – a minor market for Hong Kong products. The per capita imports from Hong Kong exceeded USD 130 in 2013, thus ranking fifths in the 28 member state of the EU. after the Netherlands, Belgium, Finland and Denmark. It was far ahead of major non EU, CEE countries such as Russia, Ukraine and Belarus.

Table 1 presents the Per capita imports of Hong Kong products


Hungarian businesses expand across borders

To overcome the limitations of its small population, Hungarian traders generally extend their business operations and networks across borders. Taking a regional perspective, Hungary is a popular logistics hub for those goods travelling east from major European seaports, and those goods going west from manufacturing outsourcing hotspots. No wonder that HKTC Research consider Hungary as a significant market for Hong Kong companies, and a convenient trading platform for tapping into the regional market.

Exactly the cited pro’s for Hungary confirm why Hungary ranked second for Hong Kong’s exports to CEE, trailing only the region’s largest country Russia. Hungary accounted for more than 18 % of Hong Kong’s CEE bound exports in 2013, exceeding the Czech Republic, Romania and Poland.

Table 2 gives a breakdown of Hong Kong’s top 10 export markets in CEE


How Hungarians are spending their disposable income

Hungary’s consumer are spending half of their income on various goods, among clothing and footwear enjoyed a share of 4 % in 2012, the same amount was spent on furnishing, household equipment and maintenance. Emerging gradually out of the global economic recession, Hungarians resumed their discretionary spending on items such as recreation and catering services, as well as clothing and footwear. The income of Hungarian consumers has increased, and spending on such items is poised to increase further in the medium term, boding well for related consumer goods suppliers.

Table 3 shows the breakdown of the Hungarian per capita expenditure in 2012


Thanks to the continued influx of foreign brands and products, Hungarian consumers are becoming more knowledgeable and conscious in view to brands and quality, and to price. The line with the rising incomes of many Hungarian families, the ownership of many consumer durables, such as refrigerators, deep freezers and microwave ovens, has been increasing rapidly over recent years. With improving living standards and product knowledge, consumers are more willing and able to afford better quality items to replace old and inferior products.

Table 4 gives an insight of Hungarian ownership of consumer durables (pieces per 100 households)


As a consequence of belt tightening in the recent past, Hungarian consumers often chose lesser known, but reasonably priced brands as substitutes for premium brands. While this may have dampened demand for luxury and high-end products, it gives Hong Kong’s mid-range exports plenty of room for growth, especially when Hungarians make functionality and quality the top priority.

Demographic Hungarian facts

When analysing evolving consumption patterns among Hungarian consumers, we note the country’s shrinking population, especially in terms of those of working age (15 – 64 years). Thus, a reported decline of more than 2 % from 2004 – 2013, together with an 11 % decline in the number of children (0 -14 years). This means that the Hungarian population has dropped by more than 2 % over the past decade. On the other hand, we note a 9 % increased in the age bracket of 65 years and above. This makes evident that the Hungarian society has to face a number of challenges as a result of its ageing and shrinking population.

Table 5 provides the figures of Hungary’s ageing and shrinking population


Textile opportunities

These facts of an ageing demographic are offering implications for the Hungarian government and well as for those businesses that are relying on the country’s future consumer profile. A smaller, ageing population might have a detrimental effect on businesses depending on volume, such as fast moving consumer goods companies, or products that are targeted primarily at the youth market, such as high street fashions. On the other hand, this represents emerging opportunities in the elderly market for Hong Kong companies selling healthcare equipment and other innovative products aimed at an ageing population. Also Hong Kong suppliers of toys and baby products are among the beneficiaries, despite decreasing marriage and birth rate, by marketing products to Hungarian parents keen to spend extravagantly on baby clothes and toys. The baby wear sector, for example, has been concentrated in the hands of large specialist retailers. However, value led fashion companies, discounters and private labels are now competing with these large specialist retailers.

Targeting the right consumer group

Hungarian incomes have risen since the country joined the EU in 2004, but the country’s population cannot compete with its neighbours in the Czech Republic, Slovakia and Poland. It becomes evident that targeting the right consumer group becomes ever more important, especially when planning to debut a brand or introduce an exclusive product in order to fill a perceived market niche. It becomes also important where to launch and conduct business.

Budapest, the Hungarian capital city is located in central Hungary, it is not only the country’s political and economic capital, but its at the same time the largest and richest city. It has a population of 1.7 million or 17 % of the total Hungarian population. It handles most of the country’s international and wholesale trade, as well as its service business. It is home to a cluster of higher income consumers. Budapest’s average purchasing power is estimated to be at least 30 % higher than the national average.

Hungary’s 2012 dispersion of purchasing power can be hand from Table 6


Attractive Hungarian capital city

Budapest is Hungary’s largest consumer market, and it offers all the credentials to serve as the ideal starting point for new-to-the-market companies intending to establish a foothold in the Hungarian market, particularly for those looking beyond OEM opportunities. Thanks to its strategic role in Hungary and CEE, Budapest is attractive not only to national institutions and government agencies, but also to domestic and international companies.

As of September 2013, Budapest was the home to 391944 companies, representing more than one third of the country’s total. It is noteworthy that more than 30 % of the Hungarian population still resides in villages. Budapest’s high concentration of potential consumers and business partners is highly conducive to production, promotion and business solicitation. It offers an ideal base for any exporters targeting the Hungarian market. Additionally, Budapest represents the cultural capital and the country’s most popular tourist destination. Budapest is considered to be the trendsetter for companies from other regions in the country, and neighbour countries, and it is a reference when sourcing.  Thus Budapest is an important bridgehead for brands and designers to establish their identity with existing or potential clients.

The Hungarian consumer behaviour

Hungarian consumers are generally regarded as pragmatic, they do not tend to show off and are conservative when making purchases. They prefer practical rather than fancy designs, and also go for simple, comfortable outfits rather than elaborate clothing. However, they leave this behaviour when it comes to some high tech items, such as smart phones and tablets. Unlike other emerging markets, such as Russia or Ukraine, most Hungarians are hesitant to buy lesser known or even unbranded smart phones and tablet alternatives from Asia as lower cost substitutes, but they do not mind to buy unbranded accessories and peripherals, given their quality and functionality.


Admittedly, Hungary is a small but very interesting market with opportunities to start business there and then expanding to CEE and beyond. The Hungarian consumer is improving its knowledge and thus he might bet on international brands and products. Also the elderly population offers a potential to those who bring the right products, among them we find clothes, but they have to meet the budget and taste of the Hungarian consumer, however by establishing a new business in the market, the newcomer has to qualify by not only bring new impulses to Hungarian retailing, at the same time these products will also have to enlarge the horizon of Hungarian consumers by creating new taste and needs. 

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.