Luxury Wine: The World of Fine Wine is moving fast. Faster than ever before !
An editorial by Guillaume Jourdan
Every day, wine news and wine magazines are delivering a flow of information about industry consolidation and international developments. The world of fine wine is moving fast. In fact, the luxury wine market is moving faster than ever. Just have a look to the news today in Financial Times with Michael Spencer, chief executive of broking giant Icap, who is making a seven-figure personal investment in Bordeaux Index. What is it for? This investment will strengthen this online wine trading exchange that can already boast 13,000 registered traders and offices in London, Hong Kong, Singapore, Beijing and Shanghai.
Today, the luxury wine market enjoys unique and strong opportunities. Mobile marketing and social media (read a related post) are simply changing the way communication was done just two years ago. Applying the techniques and technology of financial markets to fine wines are also changing the rules with more transparency and liquidity. Moeover, new markets are developping fast. As an example, given the presence of an increasing number of affluent Chinese people and an increased presence of global luxury brands, the consumption of luxury brands in China is on the rise. Indeed, a recent McKinsey & Company report estimated that by 2020 China will overtake the United States and Japan as the world’s largest luxury market. These are real opportunities for luxury wines. In fact, Asia in general is moving fast. In Korea, from next month, wine importers will be allowed to directly sell imported products to consumers. The Financial Times also reports this extremely interesting comment : “India currently charges duty of 40 per cent on wine imports, but if the government drops that rate, it may well be the next big market to open up”. Brazil and Russia - among many others - are also new targets for Bordeaux Index. In fact, as FT reports "Wine is one of the last great commodities in the world to be dragged out of the dark ages and traded on a global index”. The world of fine wine is moving fast, faster than ever.
In fact, the creation of a new world of fine wine is taking place before our very eyes. It's a great and exciting experience. But for some, when things change, concerns arise...Concerns are understandable as the luxury wine industry is definitely going through new challenges such as counterfeiting (read a related post). But when reading the comment from Bordeaux Index in FT saying that in China, "one-third of its customers buy wine as an investment they will trade, rather than drink" I can already hear some new concerns that could get wine lovers upset by these new developments...
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