Hong Kong’s wine market continues to buckle under sluggish retail, weak tourism and exodus of locals wining and dining across the border, as shown by the city’s wine imports data. However, a leading wine importer in the city expects a turnaround by end of the year.
According to government data compiled by Vino Joy News, the city’s wine imports in the first five months of the year totalled at HKD 2.7 billion, down by 18.14% compared with the same period last year.
In volume terms, the decrease is more modest by 0.73% to 13.46 million liters during the five month period.
“The Hong Kong economy has been sluggish,” Bojan Radulovic, General Manager of Links Concept commented when speaking to Vino Joy News. “People are being more careful with their spending, especially on things like expensive wines.”
Tourism, a major contributor to Hong Kong’s wine sales, has also seen a decline. Number of tourists visiting Hong Kong are down by 40% from 2019, according to Hong Kong Tourism Board data. As an international hub and duty-free port, Hong Kong heavily relies on visitors to drive demand for premium wines. “With fewer visitors, the demand for premium wines has gone down,” he explained.
Another factor contributing to the downturn is the growing cross-border spending patterns among Hong Kong residents. “More and more people from Hong Kong seem to be spending their time and money in places like Shenzhen and Guangzhou on the mainland,” he noted. “The lower costs and wider selection of goods in those cities are drawing some of the food and drink spending away from Hong Kong.” The recent launch of Sam’s Club online shopping platform in Hong Kong also poses a threat to retail sales, adding another layer of challenge to the local wine market.
France, the tax-free wine trading hub’s biggest wine exporter, was hit the hardest by the slump and suffered a 23.2% drop in value during the first five months of the year to HK$1.6 billion, directly leading to the overall drop in value.
Australian wine exports during the period totalled HK$610.3 million, thanks to increased exports in the first two months of the year, as wineries stockpile wines in the tax free haven in anticipation of China’s tax removal.
Interestingly, in the first two months of the year, Australian wine exports were growing up robustly. Its still wine exports grew by 78% and 182.8%, respectively. However, the growth was clipped immediately after China lifted punitive tariffs in late March. In May, its total export value to Hong Kong dropped by 54.3% to HK$66.5 million compared with the same month last year.
Signs of Recovery
Despite these challenges, there are signs of recovery. French wines, for instance, recorded their first growth of the year in May, up by 2.79%. New Zealand and Spain both registered double-digit growth of 24.9%, while Germany saw the sharpest jump in wine exports during the month, up by a staggering 114.06%.
The uptick and a few upcoming developments in the city have given Bojan optimism for a market rebound by the end of the year. “I have seen some positive signs like the recent Vinexpo HK event,” he said. “A lot of the wineries we represent were happy with how it turned out. There is still a ton of optimism and expectation around the Hong Kong wine market.”
He also highlighted several upcoming developments that could boost the market, such as the opening of the new Kai Tak stadium and Macallan’s 6,000 sq ft flagship store in Central. Additionally, Sotheby’s Maison is set to open by summer, adding to the city’s attractiveness. “In order to position Hong Kong as a premier wine destination for Asia-specific connoisseurs, the Hong Kong government needs to focus more on increasing the attractiveness of Hong Kong for tourists as well as for corporations,” he emphasized.
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