With political tensions and declining economy, Hong Kong’s relevance as a gateway to the Chinese wine market has shrunk but “in short term” it still acts as a bridge to the more profitable mainland market, says Josh Gu, ProWine China & Asia’s Project Director.
The comments made by Gu highlighted a growing shift that increasingly more wine fair organizers are looking beyond Hong Kong to directly access mainland market, where wine consumption is bigger by volume and by value.
While Hong Kong still prides itself over rule of law, its favourable zero wine tax policy, and transparent business environment, wineries and foreign investors over the years have grown to understand the intricacy of doing business in mainland China in cities like Shanghai, Shenzhen, Chengdu and Shenyang.
ProWine China, the longest running international wine fair in China, was the first to host professional wine trade fair in China in 2013. Since then Vinitaly and most recently Vinexpo have launched their own fairs in mainland China.
Speaking to Vino Joy News, when asked if Hong Kong is still the bridge to mainland China, Gu comments frankly, “Personally I think in the short term, it still plays the role, but at the same time it’s weakening.”
For mainland wineries looking for exports, Hong Kong still beckons. “As China’s domestic wine production grows, Hong Kong will help them enter the bigger Asian market, especially as a springboard to Southeast Asia market,” he explains, an advantage that remains competitive.
Next year, ProWine Asia will return to the city in May (18-21) alongside with HOFEX 2021, which will be Hong Kong’s largest food and wine fair since the pandemic, according to Gu.
According to Hong Kong government data, about 17% of wines exported to Hong Kong (HK$ 1.51 billion out of HK$ 8.81 billion) are re-exported to key markets in Asia, chiefly to mainland China, followed by Macau, Japan, Taiwan, Singapore and Cambodia.
This means for buyers in Southeast Asia and east Asia, Hong Kong is still a prime wine sourcing hub. This is also why the wine fair organizer is still bullish about Hong Kong despite its current challenges.
“Many buyers will come to the fair, and for wine exhibitors this is a great opportunity to expand their market. Our main targeted clients are buyers from Japan, Korea, Taiwan, Macau and Vietnam outside of South China,” Gu says, highlighting the city’s ability to draw out top buyers from rest of Asia.
“Additionally, we are also refining the market, and will have more sub wine regions at the fair,” he adds.
ProWine Asia debuted in Hong Kong in 2017 and is held in the city every two years. Last year’s edition welcomed more than 340 leading exhibitors from 28 countries and regions, including 13 national pavilions and industry associations.