On the Ground in Asia: Signs of a Selective Recovery
Following a trip to Hong Kong and Singapore, Paolo-Luca, Broker for Asia, shares what he heard from merchants, what’s driving activity and where caution remains.
The aim of the trip was to grow and build relationships with members and non-members alike, and to give credence to the whispers of growth in the region this year. It appears there is a reason for hope, but also a feeling of caution around Bordeaux in the market.
‘The world has changed.
I see it in the water.
I feel it in the Earth.
I smell it in the air.’
- J.R.R. Tolkien
It’s no secret that trade in the East has perhaps suffered the worst coming out of Covid. When Covid cleared, excitement was ripe for a big Asia comeback – but what we found was the opposite. Crackdowns on grey-market trading in Hong Kong pulled a lot of hutzpah out of the market, and stock overhangs (a dragon’s haul of undrunk and immovable recent release stock) were gathering dust in the several warehouses and private client cellars. On top of this, the hospitality scene in both Hong Kong and Singapore never really recovered in a post-Covid world and there were stories of some of the top Michelin Starred restaurants going bust – DHK, Seasons and Ancient Moon to name a few.
All in all, it’s been a rough ride, and more recent events didn’t help. Each year, mispriced vintages of Bordeaux, and Beyond Bordeaux have added more stock pressure to an already pressurised market. Purchasing slowed drastically. Then, a crackdown on gift-giving and a general fear of being ostracised meant many high rollers stopped buying and drinking the top names; instead settling for humbler 2nd to 5th growth Bordeaux, and village Burgundy.
So, amidst all the doom and gloom, what’s changed? We noted that demand out of Asia started to pick up early Summer and there has been more demand for Champagne and Burgundy especially the top names. As trade picked up, so did enquiries, and on the grape vine we started to notice that a lot of our members were taking advantage of private clients returning to the market.
Starting my trip in the gateway to China: Hong Kong seemed more alive than usual. On previous visits merchants in the country had ofttimes spoken of a ‘dead’ market and have garnered a feeling of dread about business. However, there was a palpable sense of returning demand – driven largely by foreign operators. A mixture of tourists and businesses we’re coming into Hong Kong to satiate their demand for fine wines. Namely these are coming from South Korea, Taiwan, and Singapore amongst another few select South-East Asian countries. As well as this, there is word of an increase in tourism again from Mainland China – with some shops in Central reporting sell-outs across the Golden Week with tourists coming into the local market.
Things are also looking up on the hospitality side. In contrast to the ‘empty Friday nights’ of 2023, looking around a Michelin starred restaurant, I notice its full on a Tuesday. Wine bar hopping on a Wednesday showed that people are going out again, and people are drinking. Speaking with one of the sommeliers at the wine bar – he remarked this was ‘quiet’ for a Wednesday… even though the bar was mostly full! People are going out; however, they are paying less per head than pre-Covid.
After Hong Kong I headed through a lightning storm over Ho Chi Minh to Singapore. Singapore has seemed similar positive signs in recent months, and I was told as much. As a financial hub, Singapore has attracted people of all areas to the small country, and so there is quite diverse drinking. People are keen to find out the new and trendy of Burgundy and explore different regions. Nonetheless, the big rollers seem to be returning, and there is an increased trade of people servicing the Southeast Asian market via Singapore.
Across both counties there are several similarities.
In terms of the general secondary market activity, one thing that was noted is private clients aren’t cellaring anymore. They’re looking to drink. And with that in mind, its Champagne and Burgundy that are the words on everyone’s lips. To quote one merchant: ‘French, French, French’ is what’s wanted. Demand is returning for some top-notch Burgundy that we haven’t seen for a while – with names like DRC and Leroy obviously there – alongside those brands which seemed to have been abandoned in the fallout of the covid boom: namely Bizot and Rousseau.
For Bordeaux, its not such a pretty picture. Although some of the stock overhangs have cleared (especially for rarer wines and back vintages), there is seemingly more stock coming to market for recent vintages. This is putting more pressures on prices locally, whilst prices stabilise or even grow in Europe and UK markets. This has made recent vintage Bordeaux a very difficult and tight market to operate in.
For merchants, there is a reported increase in market activity. I’d say that the wine market across the region has grown by 10-20% – with the lowest flat and the highest almost up 40%. This is a substantial shift in trends after 2025: a year that one merchant described as ‘the worst year on record’.
For Liv-ex, it was also an important time to share what we’ve got going on. Over the past year we’re had a real drive to personalisation of the platform with the release of Personalised Market Reports, Buying Recommendations, and Offex. We’re also growing our presence in France, with team members across Business Development, Broking, Account Management, Customer Success and Market Intelligence in our Bordeaux office. We also wanted to reaffirm the value of the exchange and a broker-relationship to help grow sourcing routes efficiently.
For me, it was an important chance to meet some clients and friends in Hong Kong and Singapore. It’s very important to me, that we focus on building long-term relationships with merchants in both countries both commercially and personally. As part of this, what a pleasure it was to meet members, ex-members and prospects alike and grow these relationships, whilst laying the foundations of that network for some new ones. I also managed to get a last-minute Bouldering session in before my flight home. So, all in all, a very good trip!
