Becoming a major hub in the distribution of wine: Hong Kong as a gate to Asian markets

Abstract

This paper examines the conditions of emergence of a hub in the distribution of wine. We illustrate this through a detailed discussion of wine distribution in Eastern Asia and an examination of the case of Hong Kong as an emerging regional wine hub. Indeed, the Hong Kong Special Administrative Region (HKSAR) Government has imposed zero import tax on wine since June 2008. Since then, the city has attracted a large volume of wine from foreign countries and established a wine bond warehouse in the Asia-Pacific. In total, only 16% of the wine has served for local Hong Kong consumption, with 84% being transshipped to Macau and Mainland China. Well positioned at the heart of Chinese business diaspora with good global connections, Hong Kong is currently capturing important value from wine trade. But its position may be threatened by competing hubs (i.e. Singapore), if these are able to adapt to the needs of the rapidly changing market of wine. To analyze this situation, this paper uses the concept of agility, explaining how market knowledge, flexibility and responsiveness are key elements for regional competitiveness.