Over the past decade the minimum monthly wage of foreign domestic workers in Hong Kong has only grown by 23% to HK$4,310 (US$552) from HK$3,480. Despite rising by about 2% a year, this has failed to match inflation and rising living costs.
While domestic workers have found their purchasing power shrinking due to inflation, some Hong Kong businessmen have also been able to make a fortune by serving these workers’ basic needs – sending money to their homeland, calling home and buying necessary goods.
TNG Wallet, a Hong Kong-based mobile payment company, said more than 100,000 domestic workers, or one in three of the total in Hong Kong have used the company’s services to wire money to their home countries.
TNG reportedly wired some HK$400 million to the Philippines and Indonesia last month – so, it is definitely a lucrative business.
Now, the first company focused on the activities of Filipino and Indonesian maids is set to be listed in Hong Kong.
Mobile phone-card reseller Hong Kong Asia Holdings plans to debut on the city’s mainboard, thanks to the lucrative business it has with foreign maids working in Hong Kong.
The pre-paid card company has 192,000 users, including 128,000 Filipinos and 64,000 Indonesians, and makes around HK$1,000 per year from each subscriber. Hong Kong Asia says it has over half the total foreign-domestic-workers’ market.
According to the listing prospectus, Hong Kong Asia recorded a profit of HK$26 million on a turnover of HK$200 million last year. Its turnover has been steady at about HK$200 million for the last three years.
The company’s relatively high profit margin shows that the retail sector for domestic workers is underserved. In fact, the consumption power of foreign domestic workers in Hong Kong should not be underestimated. Some small shops in Sham Shui Po and Mong Kok cater to the demand of domestic workers, who have to buy small gifts for their children and relatives or necessities for themselves.
According to the Census and Statistics Department, more than 186,000 Filipinos and nearly 160,000 Indonesians worked in Hong Kong last year (346,770 all up). And if each of them spends a few hundred Hong Kong dollars on affordable goods, the domestic worker sector has a cashflow of HK$100 million per month.
Indeed, the number of foreign domestic workers has risen 120% over the last 20 years – Hong Kong only had 157,000 in 1996. And that total figure is likely to keep growing, despite the fact that China may officially open its doors to Filipino maids in the not-too-distant future.
This population not only helps to boost productivity in Hong Kong, it also contributes to the city’s economic growth.
The importance of foreign domestic workers was exemplified by a famous saying by Dayo Wong, a stand-up comedian, who suggested that a Hong Kong man may not need a wife to have a baby but he definitely needs a foreign maid to help raise his child.