Wine in Hong Kong, China

PRE-COVID-19 PERFORMANCE

Wine severely impacted by impact of widespread social unrest

In 2019, Hong Kong was rocked by the outbreak of the Anti-Extradition Bill Movement, with fierce protests taking place in most parts of the city since June 2019. Social unrest seriously damaged sales of most wine products like sparkling wine and still light grape wine, which in turn contributed to the significant drop in overall sales due to their widespread popularity.

Japanese brands prove more resilient to recent instability

Sake saw a relatively mild decline in sales in 2019, with the category proving to be more resilient than other areas. This can be attributed to the general popularity of all things Japanese among consumers in Hong Kong and the trendy reputation of sake over the past few years, with many bars serving the drink to their customers.

Leading brands offer price promotions in response to challenging market

Sales of wine have dropped heavily since the outbreak of the Anti-Extradition Bill Movement, with fierce protests taking place in most parts of the city. In response, wine retailers are expanding their product portfolios in all price tiers (mid, low, premium).

2020 AND BEYOND

COVID-19 impact

Wine on-trade volume sales are now expected to fall by 50% in 2020 in light of the impact of COVID-19. This compares to the 2% rise forecast for 2020 during research conducted in May 2019 before the spread of the virus.

Affected products within wine

All wine categories will continue to struggle throughout 2020 as a result of the closure of bars and restaurants, although most categories will see a modest rise in off-trade sales in line with the shift towards home consumption. More exclusive categories such as champagne will be hit particularly hard given very high prices and the drastic reduction in social occasions.

Recovery and opportunities

At the height of the lockdown, e-commerce was seeing a surge in overall sales in general, including for alcoholic drinks, with sales via well-established delivery services offered by grocery retailers proving particularly strong. On-trade sales are expected to rebound strongly in 2021 after the collapse in 2020, with further strong growth expected in on-trade channels over the rest of the forecast period.

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