What is a Hong Kong Wine Importer?
Perhaps it’s a good time to clear up a couple of facts about how Hong Kong’s wine trade actually works. For one thing, unlike wine businesses in more heavily regulated markets (nearly every other wine market in the world), Hong Kong importers, distributors and retailers are often one and the same company. This is a useful difference for consumers, who can go directly to the importer to purchase wine, occasionally at close to wholesale prices.
However, there is a flipside: along with zero-tax legislation implemented in February 2008, in June 2008 the Hong Kong Government completely de-regulated the wine import industry so that import businesses need no longer acquire a license, nor supply certificates of origin or even health certificates to bring in wine. With such low barriers to entry (the chief complaint of 63% of Hong Kong importers), the market has become crowded, fragmented and confusing.
For example, very few retailers exist that don’t bring in some wine of their own, and if an importer hasn’t invested in a traditional retail outlet, they will typically create a showroom in a high-rise building that doubles as their office. Most established importers also maintain active wine clubs or private client lists, ensuring they have all their bases covered.
Some are also branching into e-commerce, although not as many as one might imagine given the convenience of delivery within the city. Hong Kong is still not yet a very strong e-commerce retail environment generally (perhaps it’s the very convenience of the city that makes its citizens reluctant to wait for a delivery). Also, those that work extensively with the F&B sector tend to be averse to posting their prices on the internet for fear of angering their key clients. Importers can generally be contacted by phone or email for their list, but the payment process is fairly tedious (often cash on delivery or a telephone call to read out credit card information, as opposed to an online payment gateway).
So how many businesses have decided to enter the fray? Estimates as to the number of Hong Kong wine importers range wildly from 100 to 3,000; one of the main reasons we decided to compile a definitive list. Having completed our research, our estimate is now in the 300-350 range, but exporters should be warned that many of these are small operators or trading companies simply interested in quick buy/sell transactions, often stocking wine alongside dried cuttlefish, fermented bean curd or even quality Italian leather footwear (of 254 importers that answered an extensive business survey for our book, Guide to the Hong Kong Wine Trade, only 52 sell nothing but wine).
300 is still a remarkable number of wine importers for a city this size; as a point of comparison, New York City has around 110. As wine became increasingly trendy, we saw wine-loving parents encourage their adult kids to import one or two brands, usually wineries they visited on holiday, which may account for the relatively large number of portfolios with only 1-10 brands (21%), sales teams of only 1-2 people (25%) and businesses that one frustrated winemaker described as having “little concept of the fundamentals required to make the wine business prosperous for suppliers.” “It appears” the winemaker went on to say “their drive is all about building their own brand and status.”
While there are several relatively successful smaller importers, we noted it was normally established, larger firms that were the subject of winemaker “shout-outs.” The smaller businesses that were critiqued are generally not “boutique” firms, in the way many small US and UK firms are; the occasional winery reported that they appreciated working with smaller importers because they felt they received their full attention. Generally, non wine-related products (including foods) in the portfolio are a sign to steer clear or else risk ending up like another winemaker who responded to our question about the order size and frequency of their Hong Kong importer: “HK only 1 so far.”
(As published in South China Morning Post)