Hong Kong’s flourishing economy and affluent lifestyle of the consumers set a solid foundation for its alcohol market. The influx of foreign brands in the market allows discriminating consumers to choose alcohols that suit their local tastes and preferences. Restaurants, pubs, night clubs and other social-gathering venues are ideal launch pads for brands looking to enter the market.
Competition in Hong Kong’s Alcohol Market
Not studying the Hong Kong market before selling alcoholic beverages is a serious mistake that many companies should avoid. It is important to know the existing competition and current consumer trends to have better chances of success in this dynamic alcohol market.
Beer consumption stands at 88% of the total alcohol consumption in Hong Kong. It has the largest market share, with a market volume of 164.8 million liters by 2023. Due to limited land available in the region, domestic beer manufacturing growth has been curbed, leaving room for international brands to enter the market. Major brands in Hong Kong are all foreign, including Heineken, San Miguel, Blue Girl, Carlsberg and Budweiser.
In recent years, there is a rising demand for imported mid and economy type lagers, as well as for imported premium lager in the region. Craft beer is a growing niche, rising in popularity among young adults who are looking for excitement and new flavors in their brews. Meanwhile, on trade channels outperforms off trade in sales, as Hong Kong residents buy most of their beer from bars and restaurants.
Since the weather is not suitable for growing grapes, there is very little wine production in Hong Kong. Almost all wines are imported and they mainly originate from European countries like France and the United Kingdom. Food and wine appreciation sessions are commonly held by restaurants and hotels in Hong Kong, while wine matching competitions are held annually during expos and fairs.
More consumers are appreciating New World wines which are cheaper but no less flavorful. Wine packaging should be eye-catching and easily recognizable, with clear labels written in English. Recently, consumers are interested in Augmented Reality (AR) labelling and application. Wines in small bottles are also great in encouraging drinkers who are leery of committing to buying full-sized 750 ml bottles.
Hong Kong’s spirits market is highly competitive, with many brands competing across categories. Some of the leading market players are Diageo and Pernod Ricard. On-trade channels continue to see higher volume sales of spirits than off-trade mainly due to huge number of pubs and bars in the region. While whiskey and brandy remain the most popular, other liquors are showing strong growth due to the rising demand among young consumers.
Cocktails are becoming popular, especially among the younger and female clientele segments who are turning away from straight liquors. Relatively sweet and palatable, Japanese whiskies also have a growing fanbase in Hong Kong. Meanwhile, e-commerce is developing rapidly in Hong Kong. More retailers are strengthening their online shopping services, with offers of discounts and other freebies.
Hong Kong’s wealthy population, established social scene and higher receptivity to alcoholic beverages offer huge opportunities for foreign companies. Market competition is high, but businesses can have the upper hand by carrying out a detailed market analysis to determine the ideal local markets and customers for their alcohol.