The evolving gateway to Asia

by | Jan 4, 2016 | Business and Marketing

Austerity measures in China have changed Hong Kong from the inflated wine auction capital to a more realistic market, which holds potential for South Africa too. Edo Heyns reports from the Hong Kong International Wine and Spirits Fair.

The removal of all duty-related customs and administrative controls in February 2008 escalated Hong Kong’s relevance in the global wine trade at a time of continuous ascendance of the Asian economic tigers and mainland China in particular. It overtook hubs like Chicago, London, Paris and New York to become the world’s wine auction capital, to the delight of especially the Bordelaise.

Chinese President Xi’s implementation of austerity measures, aimed at curbing rampant corruption (including lavish wine gifts for politicians), was the next landmark policy for Asia’s world city, which saw its auction market plummet, along with the global prices of its favourite Bordeaux imports.

This changed the Asian market significantly. Maturity and a shift from brand obsession towards value kicked in quickly. Hong Kong, the wine gate to China, thanks to the still-favourable tax policy, remains crucial to the world of wine in Asia, with a general perception that ‘mainlanders’ trust and follows its tastes.

It, therefore, comes as no surprise that the recent Hong Kong International Wine and Spirits Fair was not just about the comparatively small and overcrowded Hong Kong market, but about the surrounding emerging markets, with delegates from Malaysia and Macau to the Philippines descending on this wine Mecca. More than 1 000 international exhibitors represented 32 countries, while influential wine personalities like Hong Kong-based Debra Meiburg MW, Dr Jamie Goode and Robert Joseph formed part of the impressive line-up of the Fair’s seminar speakers.

Fair play

There were 16 South African wineries represented at the Hong Kong Wine and Spirits Fair, varying from smaller players to the big guns. This gave them a steady foothold in the market. Although there was a constant flow of interested visitors that frequented the Wines of South Africa (Wosa) stand, the scale of the show – particularly pertaining to representation from wine giants like France and Italy – put South Africa’s significance and size into perspective.

Although the success of attending the show can only realistically be determined when deals are signed and delivered, South African exhibitors were generally positive and optimistic when the show concluded.

Emma Bourg Herman Horn Leonard van der Berg

Here’s what they had to say:

EMMA BOURG

(PAINTED WOLF):

“Painted Wolf became the first South African brand to secure two spots in the top 12 selection, chosen by Eddie McDougall, Hong Kong-based winemaker, columnist and host of The Flying Winemaker television series.

“The theme for October was South Africa Uncovered and Wosa extended the invitation to producers to submit 12 wines for consideration. In the end, 162 wines were sent through to Hong Kong. I am here to build on that momentum.”

HERMAN HORN

(STETTYN CELLAR):

“I must have sent more than 300 emails to set up meetings at the show. We are here to get an importer. We are flexible, willing to make wine to specifications for own brands and able to supply in bulk and bottle. Not many wine regions can rival South Africa when it comes to value for money and we view that as our competitive edge. It’s important that everyone first sells South Africa and then their own brand.”

PIETER CRONJE

(UNIWINES):

“It’s important to realise that South Africa is really a small player in the bigger picture. Even if we doubled volumes, we are still a small player. Relationships are key and you need to be in the market to be successful.”

LEONARD VAN DER BERG

(ORIGIN)

“Never underestimate the value of knowledge of the market and the culture of the people. I specialise in the Asian market and changing my name to Leo Berg on my business card already made a big difference! It’s shorter, easier to pronounce and now I’m known as Mountain Lion!

The Chinese importers and educators are very knowledgeable. I don’t necessarily see the dominance of France and Australia as too limiting – at least, in this jungle, they pioneered a road for wine, which we can now use.

As soon as you start highlighting the positives, South Africa is an easy sell. Use Table Mountain, mention our solid banking system, our impressive viticulture and oenology department at Stellenbosch University. Those are positive and pertinent attributes!”

A word from Wosa

Wosa’s marketing manager, Michaela Stander, relocated to Hong Kong in 2014 to establish their Asian offices. After a year of living there she highlights the following as key to collaborative success:

PULL IN THE SAME DIRECTION. It’s important to know what your strategy is and how that fits into the bigger picture of Wosa and South Africa. Mixed messages can be damaging.

DO YOUR RESEARCH. This is not a market to approach blindly. Proper research of the culture, regions and trends is crucial. Top families from Bordeaux are sending members of the next generation to live in Hong Kong. There is a very good reason for that.

FOLLOW UP. Sending a container to China and believing that this will grow the market organically is a fallacy. Follow-up is crucial. Relationships are a key part of South African brands that are successful here; their marketers and winemakers frequently visit and service the market.

* Edo attended the Hong Kong Wine & Spirits Fair as a guest of the Hong Kong Trade Development Council.

Article Archives

Author

Search for more articles

Generic selectors
Exact matches only
Search in title
Search in content

Stay current with our monthly editions

Shopping cart
There are no products in the cart!
Continue shopping
0