Synergies and Alliances of Hong Kong and Singapore in the Wine Industry – Interview with Hock Tong Bee (Private) Limited
15 December 2015
Hong Kong and Singapore are viewed by many as competitors, but wine traders in the region are encouraged by the synergies of the two economies.
Established in 1938, Hock Tong Bee (Private) Limited is a family-owned business, currently led by Managing Director Clinton Ang. The company started as a small retail shop in Singapore but grew into one of the largest general wholesalers in the country. Today, Hock Tong Bee is no longer just a traditional family-owned business but a dynamic presence offering one-stop solutions for wines and spirits. Operating in 28 countries and regions including Malaysia, Thailand, Hong Kong, Mainland China and Taiwan, the company is an increasingly significant regional player and is looking to expand to the rest of East Asia, the Middle East, Australia and Oceania.
Recent years have seen a boom in wine sales in Asia, catalysed by Hong Kong's abolition of wine duty in 2008. However, the market has become increasingly keen too. “The good days are gone,” says Ang. “Revenue growth and profit margins have decreased substantially due to saturation, hefty operating costs and disloyal brand owners.”
Ang says he seeks inspiration to meet the challenge from a chopstick metaphor: a single chopstick can be easily snapped in two, but a handful of chopsticks are hard to break.
Big brands are great for face value and volume, but profit is slim. By contrast, the niche market has a high margin but little scale. Ang is trying to achieve the best of both worlds, by putting a number of family-owned brands under one umbrella to create the scale.
Ang says brand owners have to face the reality that the order size for each market today is small, so they should make good use of Singapore and Hong Kong – the two wine hubs in Asia – to consolidate regional demand. “Singapore can never compete with Hong Kong in North Asia while Hong Kong cannot rival Singapore for its close relationship with Southeast Asian countries,” says Ang. “The two hubs should work together to create the synergies.”
- Southeast Asia