Hong Kong merchant hopeful for future of wine industry

Hong Kong fine wine merchant Wine’s Link has announced the unaudited results of the company for the third quarter and nine months ended 31 December 2020. The results reflected the increasing recovery trend in the wine industry in Hong Kong, driven by the expansion of off-trade channels such as grocery stores and convenience stores.

In the announcement, it was revealed that the revenue for the third quarter was improved by 7.3% to HK$90.2 million, meanwhile the gross profit for the quarter and the period surged 46.3% and 9.7% respectively.

The group’s first three quarters revenue was amounted to HK$204.3 million, down by approximately 7.2% from approximately HK$220.1 million compared to the same period in 2019.

The decrease was primarily caused by the outbreak of COVID-19. Yet, revenue for 3Q2020 the surge of revenue in the third quarter compared to the same quarter in 2019 showed a gradual recovery of sales in 2020.

The overall gross profit margin increased 3.7 p.p. to approximately 24.1% compared to the same period in 2019.

According to the company, the relatively higher gross profit margin was recorded due to the increase in the sales of certain highly sought-after premium collectible red wine which yielded a relatively higher gross profit margin.

As the announcement suggested, the bouncing back of the business was largely due to the new and diversified sales strategies devised in the year.

The company pointed out the digital transformation of its business in 2020. They implemented its e-commerce platform to further enhance its fine and luxury wine business, targeting red wine with selling prices at or above HK$10,000 per bottle.

Also, they have developed and launched an online auction platform, which the first rare and fine wine online auction was held from 25 Jan to 7 Feb 2021.

Key lots in this auction include a Nebuchadnezzar (15L) bottle of 2000 Château Mouton Rothschild, a bottle of 1985 Henri Jayer Richebourg Magnum (1.5L) and a sixty-bottle 1951 – 2010 Penfolds Grange Vertical Collection.

The highest bid price for the lots was more than HK$5 million. The company concluded the event was well-received by their VIPs and attracted the attention from young entrepreneurs and top executives of large Chinese corporations.

Aside from the online auction platform, the company also expanded its geography by setting up an office in Shanghai, China, to promote its products and expand its sales network through various marketing and sales activities including wine dinners, masterclasses, wine trips and excursions.

They are now set to expand its business from the wholesale and retail of a wide spectrum of wine products and other alcoholic beverages to delivering a luxury lifestyle and wine experiences to wine lovers, collectors and aspiring young entrepreneurs.

Despite the global economy and retail environment remain uncertain, the company stays optimistic as they have observed the increasing interest of general customers in wine – the popularisation and younger trend of wine is expected to benefit the wine industry and the company in the long run.