Industry Trend Analysis - Affluence And Booming Cocktail Scene Driving Premium Alcohol Demand - JAN 2018
BMI View: The robust growth in spending on alcoholic drinks in Hong Kong will be driven by rising affluence levels, as the Hong Kong consumer spends a higher-price point on premium and luxury alcohol. Hong Kong boasts a thri ving cocktail scene , p ushing up the demand for craft gin and l iqueurs a nd c ordials.
Hong Kong is projected to see a growth in consumer spending of 5.4% per annum over 2017 to 2021 in local currency terms, with total spending reaching HKD1.95trn (USD251bn) in 2021, up from HKD1.59 (USD204bn) in 2017. Within our consumer spending breakdown (made-up of food and non-alcoholic drinks, alcoholic drinks and tobacco, clothing and footwear, household goods and personal care and effects), we project the fastest-growing segment in Hong Kong to be a lcoholic d rinks and t obacco, which is estimated to grow by 7.1% per annum over 2017-2021, with the segment forecast worth HKD6.9bn in 2021.
Alcoholic drinks will be the fastest-growing segment out of the two, growing by 7.4% per annum over the medium term (2017-2021) compared to tobacco spending, which will grow by 7.0% in the same period. We forecast strong growth in the alcoholic drinks segment to come as a result of existing high wealth levels, which are continuing to grow. We believe this will drive up spending on premium and luxury alcoholic drinks.
|Alcoholic Drinks Spending To Outperform Other Retail Sectors|
|Retail Sub-Segment (HKD % y-o-y)|
|e/f = BMI estimate/forecast. Source: BMI, Hong Kong Census and Statistics Department|