Asia TFWA China's Century Conference 2017 by Paramount Publishing Ltd.

英中双语

TFWA CHINA’S CENTURY CONFERENCE 2017

DUTYFREEMAGAZINE.CA MARCH 2017 · VOL 21 · NO 1

CRUISE INDUSTRY

in Asia p. 22

Tracking uber-shoppers p. 14 Chinese travelers in Korea p. 24 Changi’s growth soars p. 32

LETTER FROM THE EDITOR

Capturing both sides of the Chinese consumer coin

he latest China market research report from Peter Mohn and the team at m1nd-set, reveals that almost 50% of 2,000 surveyed travelers would still favor buying at the departure airport duty free shop before heading home, while only one-third would prefer purchasing on arrival. However, 20% also reveal they favor the departure duty free shop on their outbound trip; a figure that will surely be music to many ears at this year’s TFWA China’s Century conference. With the planned rollout of 16 duty free arrival shops at 10 of China’s international airports and a further six land border point stores following the formal approval of applications by the Ministry of Finance, the country’s duty free and travel retail landscape is yet again, capturing industry-wide attention. China National Tourism Administration statistics put domestic travel under the spotlight, with a projected 10% year-on-year growth forecast to hit 4.88 billion visits and generating up to US$635 billion in revenue. Moves to augment domestic tourism spend and the ramping up of efforts to encourage inward FDI are major Government priorities, and while China’s major international gateways have long been the pack alphas, the rising affluence and influence of second and third tier cities cannot be ignored. According to m1nd-set, with Fortune 500 company investment into a growing number of Tier 2/3 cities coupled with significant GDP growth, the industry should be paying as much attention to places like Chengdu, Hangzhou, Nanjing and Suzhou, as Beijing or Shanghai. These cities are home to a new generation of traveler, around 25% of which are solo travelling millennials, and a further 40% representing a marginally more mature genre of semi-independent autonomous tourist with a love of regular travel. And with global research company GfK noting that Chinese travelers are expected to make 123 million trips this year, representing a 4% increase on 2016 figures, this validates the country’s ambitious aviation infrastructure development strategy. China’s burgeoning aviation sector is in the throes of opening up new destinations and route options to citizens across every tier, and with around 50 new major airports pegged for development with the goal of growing capability to 272 civil aviation hubs by 2020, international travel is available on, literally, every doorstep. The detail, as always, is in the data and a report from i2i Group provides unique insight into the mega trends shaping Chinese global traveler behavior. Long haul travelling global Chinese shopper numbers reached 30 million travelers in 2016, with über shoppers – those who spend in excess of US$25,000 per person per trip just on shopping accounting for 20% of that number Independent travelers with luxury on the brain are also replacing the bus tour style of travel, with iconic shopping destinations such as New York, Paris, London and Seoul attracting Chinese consumers with healthy wallets. These fully independent travelers are buying higher end products and spend over US$6,800 per person per trip, up to four times a year. So, as the Year of the Rooster, considered to be an astute, resilient, hard-working and creative sign takes effect, the multi-layered Chinese traveler has much to offer our industry. Kindest Regards,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca 4

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

MARCH 2017 · TFWA · VOL 21 · NO 1

Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published by Global Marketing Company Ltd. 26 Pearl Street, Mississauga Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldives Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. March 2017, Vol 21, No.1. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2017 Asia Duty Free & Travel Retailing.

ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Rebecca Byrne Faye Bartle Claire Malcolm

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

LETTER FROM THE EDITOR

吸引各类中国游客 P

eter Mohn 和 m1nd-set 团队的最新中国市场研究报告显示，在接受调查的 2000 名游客中，将近 50% 的游客仍然青睐返程前在离港机场免税店购物，只有三分之一的人喜欢在抵港时购物。

但是，还有 20% 的人表示，他们喜欢出境旅行时在离港免税商店购物；这一数字对今年 TFWA（世界免税协会）“中国世纪”峰会的许多与会者来说无疑是一个好消息。中国财政部正式批准了在十个中国国际机场开设 16 间抵港免税商店以及在其他六个陆地边境口岸开设商店的申请，让中国的免税旅游零售格局再一次受到业界的广泛关注。中国国家旅游局的统计数据让国内旅游受到大众瞩目，它预计国内旅游年增长 10%，旅行人次达 48.8 亿，旅游收入达 6350 亿美元。刺激国内旅游消费和积极鼓励对内 FDI（外商直接投资）是政府的首要任务；中国的一线城市（国际性大都市）长期以来占据着重要地位，但二线和三线城市的影响力也在不断上升，不可忽视。 m1nd-set 调查显示，财富 500 强公司向越来越多的二三线城市投资，而且二三线城市的 GDP 也在显著增长，因此旅游业应给予成都、杭州、南京、苏州等城市和北京、上海等国际性大都市一样的重视。这些城市是新一代游客的家园，他们中大约 25% 的人是独自旅行的千禧一代，还有 40% 的人是更成熟的、喜欢经常去旅行的半独立自由旅行者。

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

全球调查公司 GfK 指出，预计中国游客今年旅行 1.23 亿次，与 2016 年相比增长 4%，这也证实了中国宏大的航空基础设施发展战略。中国的航空业发展迅猛，目前正处于为各等级城市的居民提供新的通航目的地及航线选择的关键时刻，当前约有 50 个全新的主要机场正在开发，以便到 2020 年将民用航空枢纽增至 272 个，让国际旅行真正走进每一个家门。细节总会在数据中表现出来，爱戴爱 (i2i) 集团的报告提供了独特的视角，让我们了解大趋势如何塑造中国出境游客的行为。 2016 年，中国长途出境购物者人数达 3000 万，人均单次旅行购物花费超过 25,000 美元的超级购物者占上述人数的 20%。关注奢侈品的自由行游客正在取代团队巴士旅行方式，纽约、巴黎、伦敦和首尔等购物天堂吸引着钱包满满的中国消费者。这些自由行游客购买更高端的产品，人均单次旅行花费 6,800 美元，每年旅行达四次之多。今年是鸡年，鸡代表着敏锐、坚韧、勤勉、富有创造力，在鸡年里，不同层次的中国游客定将为我们的行业带来更多惊喜。此致

Hibah Noor 主编 hibah@dutyfreemagazine.ca

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CONTENTS

What’s inside LEAD STORIES 10 China Overview CHINA TRAVEL RETAIL COMES HOME TO ROOST

A new wave of revolutionary domestic retail experiences is expanding industry opportunity across the country, while travelers from second and third tier cities add increasing international value

12 中国旅游零售业再分析

新一波革命性的国内零售体验带来了绝佳的行业扩张机会，而来自二三线城市的游客越来越多地走出国门

14 i2i Group TRACKING THE UBER-SHOPPERS

Researcher i2i Group reveals the most important mega trends among Chinese global travelers that will shape the shopping environment this year

16 追踪超级购物者爱戴爱集团 (i2i Group) 调查表明，中国出境游客最重要的大趋势将决定本年度的购物环境爱戴爱集团凭借对中国旅游业的专业深入研究，对未

来一年间中国出境游客的全球奢侈品购买和消费情况做出了一系列预测。

22 Cruise Industry CRESTING THE WAVES

The global cruise industry is booming and shows no signs of slowing down. The increase in cruise travel is set to continue throughout 2017, with an estimated 25.3 million passengers expected to sail, a dramatic increase from 15.8 million just 10 years ago with the Asian market seeing an explosion in growth

24 Chinese Travelers in Korea GOING IT ALONE

South Korean travel retailers have seen a rapid growth in the independent travelers visiting and purchasing in their stores. These travelers have very different habits from the more traditional customer and look to new channels for information

26 独行天下韩国旅游零售商接待的自由行游客数量迅速上升。自由行游客与传统跟团游客习惯截然不同，前者更留意新的信息渠道。

28 King Power Group (Hong Kong) Travel Retail AN INDUSTRY GURU

Fresh from submitting his company’s bid for the highly contested concessions at Hong Kong International Airport, Sunil Tuli, Managing Director of King Power Group (Hong Kong) Travel Retail, talks to Asia Duty Free Magazine about his long and successful career within the travel retail industry

34 Guest Writer FACING FUTURE CHALLENGES

In this guest writer piece, ETRC President Sarah Branquinho provides a detailed overview of some of the major issues (threatening the industry in Europe and elsewhere) that are being addressed by ETRC

40 Oriental G.T. TAPPING INTO THE NEW WAVE OF CHINESE SMOKERS

By addressing a gap in the market for an international Chinese tobacco brand that’s rooted in heritage, Oris China is winning listings around the world

FEATURES Plus Max stores in Vietnam and Laos Changi’s growth soars Misaki celebrates 30 years Temptations galore Kavlan makes a splash Camus targets Chinese consumers

20 32 36 38 42 44

CHINA OVERVIEW

China travel retail comes home to roost

Erik Juul-Mortensen, President, TFWA

A new wave of revolutionary domestic retail experiences is expanding industry opportunity across the country, while travelers from second and third tier cities add increasing international value by

CLAIRE MALCOLM

he evolution of the Chinese traveler and the country’s duty free and travel retail market is both an intriguing case study and commercial conundrum, with change the only constant in a rapidly shifting retail landscape. With the extension of arrivals duty free at airports and border locations, offshore duty free developments and a tightening of inbound allowances, capturing increased domestic spend is a government priority, and growth in domestic travel is yielding results. According to China National Tourism Administration statistics, domestic travel is set to grow further in 2017 with a forecasted 10% year-on-year increase to reach 4.88 billion visits, generating up to US$635 billion in revenue (an increase of 12.5%). With domestic travel on an uptick, this is opening up new avenues of retail opportunity, as TFWA President, Erik JuulMortensen, explains: “Duty paid retail facilities, such as that announced at the start of this year at Shanghai Hongqiao International, give China’s consumers access to brands that they don’t find on the high street, and are becoming a key feature of airport development plans across the country.” Nonetheless, this hasn’t dampened the desire for international travel and for Jaya Singh, President, APTRA, it’s the millennial generation who is calling the shots in every respect. “Gen X and Y are the product of an increasingly affluent society. Broadly speaking, they have high disposable income, like to travel, are brand aware, seek unique experiences, are tech savvy, and, crucially, are the most connected generation ever. And there are millions of them,” he notes.

Wheels up for expansion China’s booming aviation sector is also a catalyst for both domestic and outbound tourism growth. Around 50 new major airports are earmarked for development in the country’s 13th Five-Year Plan with 6-7% per annum passenger volume predicted over the next 20 years. Major carriers are adding new routes thick and fast. Air China launched 29 international routes in 2015 with China Southern adding 15 new international routes from Guangzhou and Shenzhen last year, and a further eight to nearby Asian countries including Japan, Korea and Thailand. China Eastern added 40+ long-haul aircraft to its fleet in 2016,

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

increasing international capacity by 30%, and added six new routes to key European, Russian, US and Australian destinations. Low-cost carriers have also jumped on the lucrative ChinaJapan connection with like Shanghai’s Spring Airlines, and its subsidiary Spring Japan, operating 25 routes between the two countries. And Tianjin Airlines is positioning the city as the second access point to super-congested Beijing, by opening international routes to popular international cities.

All eyes on the East The rationale for ambitious route expansion is borne out by data from Ctrip, with Chinese outbound tourists, of which 73% is made up of Gen Y consumers, GfK data, expected to take 123 million trips this year; a 4% increase on 2016. Top destinations for Chinese travelers continue to be within Southeast Asia, with South Korea, Japan, Thailand and Taiwan the most popular destinations in 2016, and France and Australia, US also on the bucket list. Professor Zhang Guangrui, Honorary Director of the Tourism Research Centre of the Chinese Academy of Social Sciences highlights a number of emerging market segments with cruise holidays and self-drive both hot vacation options. He also reports growth in interest for ‘red tourism’ experiences, which encompasses trips to historical international sites linked to the communist and socialist political movements, from Russia to Cuba. Says TFWA’s Juul-Mortensen: “Younger Chinese travelers want products that have a personal and cultural relevance. Airports, retailers and brands need to understand this shift, whether that means creating more snapchat-worthy displays or running eye-catching promotions.” Unique travel experiences beg equally unique retail presence. Says Singh: “By creating unique experiences, we increase store penetration and drive sales. It is an expensive strategy but the returns, we hope, justify the investment. Some brands, working hand in hand with airports and retailers, have been truly inspired in their marketing efforts.” He reels off numerous examples from spirits brand pop-ups offering one-on-one ambassador taste journeys to confectionery company dipping stations and barber shop experiences from leading cosmetics labels.

Welcome home

Model for moderation

The decision of China’s Ministry of Finance to approve applications to open 16 duty free arrival shops in 10 international airports, and six stores at land border points, is supporting the ‘domestic first’ agenda. “From the consumer’s perspective this adds choice, convenience, entertainment, and often savings, on global brands. For the suppliers these emporia offer a new outlet where the practical issues of space restriction and inflight carriage are removed so, potentially, shoppers can, conveniently, buy large, bulky products, clothing, technology, liquids and multi-pack offers,” says APTRA’s Singh. New airports in the reported running to offer arrivals duty free are said to include Chengdu Shuangliu, Chongqing Jiangbei, Dalian Zhoushiuzi, Guangzhou Baiyun and Tianjin Binhai International Airport. Says Juul-Mortensen: “Arrivals shopping is a phenomenon that is very successful in many airports around the world. By opening up the arrivals duty free experience in China, it will ultimately increase competition as well as widen and strengthen the sector.”

Professor Zhang Guangrui, Honorary Director of the Tourism Research Centre of the Chinese Academy of Social Sciences, is confident that the Chinese outbound travel market will continue its strong growth trajectory, but believes it will gradually mature into a more recognizable ‘Western tourism model’, with a switch towards more controlled spending. Singh disagrees, and says: “It would be misleading to describe the evolution of the outbound Chinese travelers market as becoming more Western. This is a whole new type of market where the consumer is often younger, is brand savvy, and is looking not so much for luxury brands as such, but for unusual experiences and tangible proof that he is cosmopolitan and ahead of the trend. “Chinese and other Asian high-end brands are establishing a marked footprint in the luxury market in their own right. This is not strategy for the long or the medium term but for now!” “There is, and always will be, a fantastic market for luxury and super-luxury products,” notes Juul-Mortensen, adding: “However, increasingly it is also important to provide more middle market and premium products. For a significant number of new travellers, these will be aspirational and very desirable.”

Tiered approach to travel Independent research firm, m1nd-set has been keeping an eye on travelers from China’s second and third tier cities. Like their gateway city compatriots, preferred destinations include Thailand, Taiwan and South Korea plus Malaysia and Singapore; all popular due to limited budgets and available holiday time. Peter Mohn, Owner & CEO, m1nd-set, notes that Tier 3-based travelers favor Macau and Hong Kong, while Australia, the US and certain European cities are attracting Tier 2 residents. “The increasing number of international travelers from Tier 2 cities is mainly due to the opening of direct flights from these cities. Outside Asia, France is clearly the dream destination for Tier 2 residents,” he remarks. Differences in the Tier 2/3 city demographic is also a major influencing factor. Says Mohn: “Around 25% of solo travelers are millennials, while 40% can be classed as ‘older’ millennials, who are semi-independent, who tend to travel a lot and plan organized travels, but who like to remain autonomous. “The other 35% only travel every two to three years, and are typically 40+, and who prefer group travel. So, this clearly demonstrates that group travel is in decline.” This also raises the question if there needs to be a different airport duty free and travel retail experience in Tier 2/3 destinations. “These travelers are becoming more cosmopolitan and familiar with the Internet, and consequently have the ability to explore new countries and organize trips themselves. It is still a relative small segment, but there is a growing group who want to explore more ‘daring’ destinations, such as New Zealand and South,” says Mohn.

With rampant aviation sector development on the cards, Mohn believes that, besides Tianjin, cities like Chengdu, Hangzhou, Nanjing and Suzhou, are ones to watch, due to impressive GDP growth and industrial importance with many Fortune 500 companies already investing. Erik Juul-Mortensen, TFWA President adds his own expert insight: “Retailers and brands need to understand that the demographics are very different in each province. DFS and China Duty Free Group have done considerable research into the way the province of origin affects customer spend and behaviour, and the differences are indeed marked.”

Peter Mohn, Owner & CEO, m1nd-set

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

CHINA OVERVIEW

中国旅游零售业再分析新一波革命性的国内零售体验带来了绝佳的行业扩张机会，而来自二三线城市的游客越来越多地走出国门务，而目前国内旅游增长已初见成效。中国国家旅游局的统计数据表明，2017 年，国内旅游将继续保持增长势头，预计年增长率为 10%，旅行人次达 48.8 亿，旅游收入达 6350 亿美元（增长 12.5%）。国内旅游业的增长为零售业带来了新的机会，正如 TFWA（世界免税协会）会长 Erik Juul-Mortensen 所说：“付税零售店（例如，今年年初上海虹桥国际机场宣布开立的付税零售店）让中国消费者能够接触大街上无法找到的品牌，它正在成为全国各地机场发展规划的重要特征。”

Jaya Singh, President, APTRA

中

国游客和中国免税及旅游零售市场的变迁是一个耐人寻味的案例研究，也是一个难解的商业谜题；在快速变化的零售市场上，只有变化才是永恒的主题。随着机场及边境口岸入境免税店的扩张、离岸免税的发展和入境限额的紧缩，刺激国内消费成为政府的首要任 12

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

但这不会抑制对国际旅行的需求。APTRA（亚太旅游零售协会）会长 Jaya Singh 认为，千禧一代已成为各领域的主力。他说：“X 一代和 Y 一代是日益富裕社会的产物。一般而言，他们有着较高的可支配收入，喜欢旅行，有着较强的品牌意识，寻求独特体验，精通技术，最重要的是，他们是与互联网关系最密切的一代。他们的人数达数百万。”

开始扩张中国蓬勃发展的航空业也是国内和出境旅游增长的催化剂。“十三五”规

“Gen X and Y are the product of an increasingly affluent society.” says APTRA’s Singh

划中，计划新建约 50 个大型机场，预计未来 20 年间，每年旅客数量增长 6-7%。大型航空公司纷纷增加新的航线。中国国际航空 2015 年推出了 29 条国际航线，中国南方航空去年新增 15 条从广州和深圳始发的国际航线，还增加了 8 条飞往日本、韩国、泰国等亚洲邻国的航线。 2016 年，中国东方航空新增了 40 多架长途客机，国际航空运载能力提高 30%，同时新增了 6 条飞往欧洲、俄罗斯、美国和澳大利亚重要地区的航线。低成本航空公司也扑向了利润丰厚的中-日航线，例如，上海春秋航空及其子公司春秋航空日本经营着 25 条中日航线。天津航空通过开设飞往热门国际城市的国际航线，将城市定位为超级拥堵的北京的第二入口。

关注东方雄心勃勃的航线扩张理由得到了携程旅行的数据支持。携程数据表明，73% 的中国出境游客为 Y 一代消费者；GfK 数据预计，今年的出境旅游将达到 1.23 亿人次，比 2016 年增加 4%。

中国游客出境游的首选目的地仍然是东南亚地区，韩国、日本、台湾成为 2016 年最受中国游客喜爱的旅行目的地，法国、澳大利亚、美国也位居榜上。

他举了许多例子，如烈酒品牌的一对一烈酒大使品鉴之旅、糖果糕点公司的制作台活动，以及化妆品领导品牌的美容体验。

中国社会科学院旅游研究中心名誉主任张广瑞教授突出介绍了若干个新兴的细分市场，其中邮轮旅行和自驾游成为热门的度假选择。

中国财政部决定批准在 10 个国际机场开设 16 家免税入境商店以及在陆地边界开设六家免税入境商店的申请，支持“国内优先”计划。

他还提到，人们对“红色旅游”体验的兴趣日益增加，从俄罗斯到古巴，与共产主义和社会主义政治运动相关的国际历史遗迹大受欢迎。

“从消费者角度来说，这为全球品牌增加了可选性、方便性、娱乐性，也节约了资金。这些商业中心为供应商提供新的销路，使空间限制和空中运输等实际问题得到解决，因此购物者可以方便地购买大宗大件产品、服装、技术、饮品和合装包，”APTRA 会长 Singh 说道。

TFWA 会长 Juul-Mortensen 表示：“年轻的中国游客希望产品更具个人风格和文化意义。机场、零售商和品牌应该了解这一变化，不管是需要进行更多图片展示还是开展夺人眼球的促销活动。” 独特的旅行体验需要同样独特的零售业务。Singh 表示：“通过创造独特体验，我们增加了到店访客量，推动了销售量的上升。这一策略花费巨大，但我们希望它的回报对得起这样的投资。一些品牌与机场及零售商携手合作，采用了多种营销手段。

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开设入境免税店的新机场据说包括成都双流、重庆江北、大连周水子、广州白云和天津滨海国际机场。 Juul-Mortensen 说：“在全世界许多机场，入境购物是一种非常成功的模式。在中国开设入境免税购物店，终将强化竞争，扩大行业规模，增强行业实力。”

稳健之道中国社会科学院旅游研究中心名誉主任张广瑞教授对中国出境游市场充满信心，认为它将继续强劲增长，他也相信，这个市场将逐步成长为更具认可度的“西方旅游模式”，消费控制程度也会更高。但 Singh 不同意这一观点，他认为：“说中国出境游客市场变得更加西方化，可能会产生误导。这是一个全新的市场类型，消费者更年轻、有更强的品牌意识，追求的不再仅仅是奢侈品牌，而是希望拥有不同寻常的经历以及实实在在地证明自己处于都市和时尚前沿。 “中国和其他亚洲高端品牌凭借自己的实力在奢侈品市场赢得了一席之地。这不是中长期战略，而是当前的战略！” “奢侈品和超级奢侈品现在拥有，未来也会一直拥有巨大的市场份额，”Juul-Mortensen 指出，他补充说道：“但是，提供更多的中间市场和高端产品也越来越重要。对于人数众多的新游客来说，这是梦寐以求、非常值得的。”

各等级城市出游方式独立研究机构 m1nd-set 一直密切关注着中国的二三线城市。和一线门户城市的人们一样，二三线城市居民出境旅游的首选目的地是泰国、台湾、韩国、马来西亚和新加坡—— 这些地方都非常受欢迎，因为人们的预算有限、假期时间也不长。 m1nd-set 所有者兼首席执行官 Peter Mohn 指出，来自三线城市的游客更喜欢去澳门和香港，而澳大利亚、美国和部分欧洲城市则吸引着二线城市的居民。 “二线城市的出境游客数量不断增加，主要是因为这些城市开通了直航航线。亚洲之外，法国无疑是二线城市居民梦寐以求的旅游目的地，”他评论道。二三线城市的人口差异也是一个重要的影响因素。 Mohn 说道：“大约 25% 的独立旅行者是千禧一代，而 40% 的独立旅行者可归为“更老的”千禧一代，他们是半独立旅行者，经常去旅行，常常选择有组织的出行方式，但也希望保持独立。

“剩下 35% 的人每两三年旅行一次，他们的年龄通常在 40 岁以上，喜欢跟团旅行。这些数据表明跟团游正在走下坡路。” 这也提出了这样一个问题：二三线城市游客的目的地是否需要提供各种不同的机场免税和旅游零售体验。 “这些游客变得越来越国际化，他们熟悉互联网的使用，有能力自己探索新的国家并自行安排行程。他们的数量现在还不多，但是越来越多的人希望探索更“大胆”的目的地，例如新西兰和南方地区，”Mohn 说道。 Mohn 相信，随着航空业的蓬勃发展，除天津之外，成都、杭州、南京、苏州等城市也值得关注，因为这些城市的 GDP 增长显著，许多财富 500 强企业都在这些地方投资，具有重大的行业意义。 TFWA 会长 Erik Juul-Mortensen 进一步阐述了自己的专业见解：“零售商和品牌得了解，各省的人口情况大不相同。DFS 和中国免税品集团对出生省份如何影响客户消费和消费行为进行了大量研究，研究结果表明，各省之间的差异确实非常显著。”

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I2I GROUP

Tracking the

ubershoppers

Alipay, the financial payment system of online sales giant Alibaba, and WeChat Wallet, part of Tencent (China’s largest company by market capitalization), own this world of mobile payments

Researcher i2i Group reveals the most important mega trends among Chinese global travelers that will shape the shopping environment this year by

HIBAH NOOR

hina-based research specialist i2i Group has made a number of predictions for the coming year about the world of luxury shopping and spending by Chinese global travelers. The company has drawn on its pool of nearly 20 million people. More than nine million Chinese global travelers and shoppers read its Galerié magazines, in addition to five million focused on just shopping and another five million WeChat readers. Here, the firm unveils the mega trends and most important considerations for luxury brands and retailers in the coming year who are focused on Chinese global travelers and shoppers.

The rise of frequent independent travelers (FITs) For years, luxury brands and retailers have been focused on the busloads of Chinese tour groups traveling the globe and trying to get them to spend a few minutes in their stores or boutiques. After all, groups made up the vast majority of Chinese travelers and shoppers. In 2016 this trend shifted substantially, with premier shopping destinations such as New York, Paris, Los Angeles, London, Singapore, Tokyo and Seoul seeing the majority of their arrivals as independent travelers, in some cases as much as 60%. Based on i2i group’s reader and WeChat fan research, the independent traveler and shopper stays longer, shops more and spends more by as much as 100% compared to the typical group traveler. FIT shoppers buy higher end products and spend over US$6,800 per person per trip and travel as much as three to four times each year around the world. This translates into approximately US$40 billion of luxury buying. Brands and retailers who focus on this segment will find that their average sale increases in value while extending brand loyalty to a frequent global shopper as compared to the once-in-a-

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

lifetime group traveler. “There is little doubt that this will be your primary Chinese shopper for years to come. While global group travel was stagnant in 2016, FIT travelers increased by as much as 30% to some destinations,” says Alexander Glos, CEO, i2i Group.

Uber-global Chinese travelers and shoppers Much has been written in the past year about the slowdown in the Chinese economy and how it will impact global Chinese shopping. The country’s 7% growth rate is, by Chinese standards, slower than before. But Glos believes these Chinese macro numbers do not do justice to the micro influences that are thrusting the high-end Chinese global luxury shopper to be the world’s number one international customer. Long haul global Chinese travel shoppers in 2016 reached 30 million travelers, out of the 140 million total international Chinese travelers. Long haul means from China to Europe, North America, Australia and New Zealand. Of this group, approximately 20% are uber-shoppers, which i2i defines as spending more than US$25,000 or equivalent per person per trip exclusively on shopping. These shoppers take only 6 million annual trips and count about 4.5 million travelers – just a quarter of 1% of the population. In its research, i2i focuses on how these travel shoppers act, behave and how their income affects their travel shopping tastes and spend. These uber travel shoppers earn their income largely through independent businesses; they own their businesses. Glos gives an example: “I once met a man on a flight in China who told me his company, which he founded about 15 years ago, manufactures over 100 million glasses, mugs and cups each year for sale throughout China and the world. His average profit

Premier shopping destinations for Chinese include New York, Paris, Los Angeles, London, Singapore, Tokyo and Seoul

Alexander Glos, CEO, i2i Group

margin per item is approximately 20 cents, which translates into US$20 million a year. He told me he loves to hear the sound of glasses being dropped and breaking in restaurants or bars.” No matter how the Chinese economy grows or slows in 2017, these businesspeople, these uber travel shoppers, will manage their businesses to their bottom line. If sales drop because of Chinese or global economic woes, they will simply cut costs, dismiss staff, etc. Their bottom line, their take home income each month, will not be affected. Hence their disposable income will remain strong no matter and they will continue to travel and shop.

Hence they pay higher rates of interest to the customer, take no fees, and offer cash discounts and loyalty incentives. It’s an easy choice for the Chinese global shopper. In 2016, China will generate over US$1,700 in mobile payment volume per capita, compared with US$475 in the US. In real terms, this is over US$2 trillion. “If you are opening a WeChat store, or want to offer China home delivery, pre-arrival shopping to independent travelers, or just looking to be very China friendly, you need to take Alipay and Wallet,” says Glos.

Alipay and WeChat Wallet

The Trump effect

“I live in China and I am really glad I don’t work in the credit card business,” says Glos. “To paraphrase a recent Nobel Prize winner, The payments they are a-changing!” Alipay, the financial payment system of online sales giant Alibaba, and WeChat Wallet, part of Tencent (China’s largest company by market capitalization), own this world of mobile payments. Over 800 million people in China are using one or both mobile payment systems for virtually all of their non-cash payment transitions. According to Worldpay’s 2016 Global Payments Report, Alipay accounts for 44% of global mobile wallet spending and is on pace to reach 60% by 2020. “No matter if you are topping up your metro card, paying for a taxi, at a convenience store, checking into a hotel, buying an airline ticket or now shopping in Asia, Europe or North America – Alipay and Wallet are the way the Chinese consumer wants to go and so you need to follow,” says Glos. The reason for this upsurge in mobile payments? Glos says they are easy to use, cheap, and offer discounts and benefits. Unlike banks with capped interest and expensive transaction fees, Alipay and WeChat Wallet are not banks and unregulated.

Chinese global travel shoppers can be fickle. As seen over a year ago, European terrorism impacted travel choices for all tourists and particularly the Chinese, who are especially risk adverse and safety conscious. If hot words between the US and China under President Donald Trump translate into hotter deeds by either country, it’s logical to assume that Chinese travel shoppers will shift their travel plans to locations perceived or propagandized to be more appealing and welcoming to Chinese travel shoppers. Two years ago, exchange rates propelled the Chinese to Japan and South Korea because global luxury brands were underpriced by shifts in exchange rates. Suddenly stores in Tokyo’s upscale Ginza district were awash with Chinese shoppers. No matter what happens politically, the Chinese will still travel and shop. The only question to be determined is where. Smart brands will watch these trends and monitor travel and spending behavior as the political temperature swings, concludes Glos.

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I2I GROUP

No matter what happens politically, the Chinese will still travel and shop. The only question to be determined is where

追踪超级购物者爱戴爱集团 (i2i Group) 调查表明，中国出境游客最重要的大趋势将决定本年度的购物环境

爱

戴爱集团凭借对中国旅游业的专业深入研究，对未来一年间中国出境游客的全球奢侈品购买和消费情况做出了一系列预测。

团游。但是，这一趋势在 2016 年出现了大幅度改变。前往纽约、巴黎、洛杉矶、伦敦、新加坡、东京和首尔等热门城市的大部分游客是自由行游客，有时这一比率甚至达到 60%。

这些预测都以对近 2000 万中国游客资源库的调查为基础。其中，900 多万人是阅读其《Galerié》杂志的出境游客和购物者，500 万人是热情的购物者，还有 500 万人是微信用户。

根据对爱戴爱集团读者和微信用户的调查，自由行游客和购物者的逗留时间更长、购物数量更多、购物开销更大，是传统跟团游客的两倍之多。FIT 购物者购买的终端产品价值更高，他们每人每次旅行花费超过 6800 美元，每年全球旅行三到四次。这就意味着约 400 亿美元的奢侈品购买量。

爱戴爱集团为重点关注中国出境游客和购物者的奢侈品牌和零售商揭示了未来一年间的重大趋势和最重要的考量因素。

小标题：频繁自由行游客（以下简称“FIT”）的出现多年以来，奢侈品牌和零售商都将注意力放在满车的中国出境跟团游客上，竭力让他们在自己的店铺里停留片刻。毕竟绝大多数中国游客和购物者会选择跟

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

关注此类客户的品牌和零售商将发现，与难得出行一次的跟团游客相比，频繁全球购物者不仅所购商品的价值更高，对品牌的忠诚度也更高。“毫无疑问，他们将成为未来几年中国购物者的主力。尽管 2016 年全球跟团游表现不佳，但某些旅行目的地的 FIT 游客增加了 30%，”爱戴爱集团首席执行官 Alexander Glos 表示。

中国超级全球旅行者和购物者过去一年间，很多文章都谈到中国经济下行及其对中国游客全球购物的影响。中国的经济增长率为 7%，低于前些年的增长速度。但 Glos 认为，中国的宏观经济走势并未影响高端中国游客对全球奢侈品的购买力，实际上，高端中国游客已经成为全球最庞大的客户群体。2016 年，中国长途出境旅行购物者达到 3000 万，而当年中国出境游总人数为 1.4 亿。长途旅行是指从中国到欧洲、北美、澳大利亚和新西兰。在长途出境游客中，大约 20% 的人为超级购物者——在爱戴爱看来，单次旅行购物花费超过 25,000 美元或等值金额的人即可称为超级购物者。这部分购物者每年的旅行次数仅为 600 万次，人数约为 450 万，仅占中国人口总数的 1%。

I2I GROUP

在此项研究中，爱戴爱关注的是这些旅行购物者的行为表现及其收入对旅行购物品味和花费的影响。这些超级旅行购物者的收入大都来自独立的自有企业。 Glos 举了一个例子：“我曾经在飞机上遇到过一个中国人，他告诉我，他 15 年前创立了一家公司，现在这家公司每年生产一亿个玻璃杯、马克杯和其他杯子，销往中国和世界各地。每件产品的平均利润率大约是 20 美分，因此他一年的利润大约是 2000 万美元。他说，他喜欢听餐馆或酒吧的玻璃杯掉到地上或打碎的声音。” 不论中国经济在 2017 年是增长还是放缓，这些商人，这些超级旅行购物者，都能够让企业盈利。如果销售因为中国或全球经济不景气而下滑，他们就会缩减成本或裁员等；所以他们的利润、他们每月实际到手的收入还是不会受到影响。因此，他们的可支配收入依然非常丰厚，他们仍会继续旅行和购物。

在线销售巨头阿里巴巴的金融支付系统支付宝和腾讯（中国市值最大的公司）旗下的微信钱包共同占据了中国的移动支付市场。中国有 8 亿多人正在使用这两种或其中一种移动支付系统，进行几乎所有非现金交易。Worldpay《2016 年全球支付报告》显示，支付宝占据全球移动钱包花费的 44%，到 2020 年，这一比率将提高至 60%。 “不论是充地铁卡、付出租车费、在便利店购物、入住酒店、购买机票，还是去亚洲、欧洲或北美购物，支付宝和微信钱包都是中国消费者惯用的支付方式，所以你得按照他们的喜好来，”Glos 说道。移动支付兴起的原因何在？Glos 指出，这是因为它们使用简便又便宜，还能提供折扣和优惠。

支付宝和微信钱包

银行利率受限、交易费昂贵，而支付宝和微信钱包不是银行，所受束缚更小。因此，它们可以向客户提供较高的利率、不收交易费，还可以提供现金折扣和老用户福利。中国的出境购物者当然会选择它们。

Glos 说：“我住在中国，我真的很庆幸我不从事信用卡业务。”“套用诺贝尔文学奖得主鲍勃·迪伦的名句，就是——支付方式在变革！”

2016 年，中国人均移动支付金额为 1700 美元，相比之下，美国仅为 475 美元。中国的实际总额超过两万亿美元。

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

“开微店、提供送货上门服务、自由行旅客抵达前购物，或者只是想要变得“非常中国”，那就需要支付宝或微信钱包”，Glos 如是说。

特朗普效应中国的境外旅行购物者心态难以捉摸。就像一年多前，欧洲的恐怖袭击对全球游客，特别是中国游客赴欧旅行产生了不利影响，因为中国游客有着极强的风险趋避和安全意识。唐纳德·特朗普就任美国总统后，如果中美之间的激烈言辞演变为激烈的行为，我们有理由相信，中国旅行购物者会改变旅行计划，转而前往感觉上或宣传上对他们更具吸引力、更欢迎他们的地方。两年前，汇率的变动让中国人蜂拥前往韩国和日本，因为在当时的汇率下，这两个国家的全球奢侈品牌价格偏低。一夜之间，东京银座的高档店铺内挤满了中国人。不论政治局势如何，中国人都会旅行和购物。唯一需要考虑的问题是，目的地是哪里。聪明的品牌将关注这些趋势的走向，同时密切注意政治局势变幻对旅行及消费行为的影响，Glos 总结道。

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PLUS MAX

Naina Mohamed Sultan, COO, Plus Max

Plus Max adds two border stores in Vietnam and Laos Plus Max expands its Far East presence as the company builds on its existing portfolio Plus Max is building both brand and consumer partnerships at its showcase events

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

Dato’ S. Prakadeesh Kumar is spearheading Plus Max’ regional expansion strategy

alaysia-headquartered Plus Max is expanding its Far East presence as the company builds on its existing portfolio of seaport shops, border stores, cruise terminal and downtown locations. According to Naina Mohamed Sultan, COO, the addition of two border stores in Vietnam and Laos represent the first wave of expansion. “We’re looking to become a regional player and will also open a seaport location in Sri Lanka within the next 12 months. Our immediate expansion strategy is based on looking at opportunities within a six-hour flight radius of Malaysia,” he said. All stores under the Plux Max banner are currently undergoing a complete renovation with Sultan confirming the phased delivery of an entirely new look and feel, anchored by the company’s distinctive red and silver branding. According to company head Dato’s. Prakadeesh Kumar, this will be completed within the next three to six months. “We have two prototype shops, the Star Cruise Terminal at Port Klang in Kuala Lumpur and a border store at Padang Besar, and we will use these as test beds to add more variety in terms of product lines and categories to see what works for each location,” he said. “From this we can create a benchmark for each type of store whether it’s land based, diplomatic, seaport or airport; and tailor the offering to suit the customer,” he added. One of the largest Malaysian duty free operators outside of the

An annual calendar of diplomatic corps receptions and other events is a major focus

traditional airport environment, Plux Max also supplies to the diplomatic corps. Sultan also sees significant potential within the seasonal cruise market sector, as he explained: “In high season we are getting around 30 ships with an average of 5,000 passengers per cruise ship per month. Another market that Sultan says holds promise is Myanmar. “We will see exponential growth there in the next decade, and with multiple border points under consideration, the floodgates will be opened. We want to specifically target the less mature markets in Asia for this reason,” he remarked. He also cites India as a country as one to watch in the mid to long term. “There are currently around 300 million middle income households in India, and more and more people are now choosing to travel outside of the country to places in South East Asia,” he said. One of the biggest challenges, according to Sultan, is persuading principals to look beyond traditional or established markets, as he elaborated: “By providing support and product we can build brand presence for them in emerging markets. What many people don’t realise is that these emerging destinations are very affluent, with people who want luxury products and who are willing to pay for the experience.” The grand plan for Plux Max is to develop a distribution channel for the region, working with smaller players in the confectionery, tobacco, perfumes and alcohol categories.

Said Sultan: “We want to get brand distribution rights for the entire region and handle this out of Malaysia, as the central hub, and we already have some brands on board. By starting with the smaller brands and successfully growing their presence, and commercial numbers, this will help us when approaching bigger brand owners in the future. “While we think that 2017 will be another slow year for the industry, it’s important for us to get in on the ground now as we expect things to turn around from 2018.” With cost cutting and increased sales projections something of an oxymoron, Plus Max is pitching itself as an affordable distribution alternative to more expensive locations such as Singapore, and a regional logistics expert. Another crucial element to securing awareness and driving sales is a planned calendar of quarterly diplomatic receptions and other events, the first of which took place recently in Kuala Lumpur and welcomed over 200 guests from 60 embassies. “These are a showcase and at each event we will partner with a brand so that they can meet the customers in person and promote new launches or special offers etc.,” said Kumar. This will be coupled with an aggressive e-commerce strategy, which includes a dedicated website and online purchase portal, an e-brochure, print magazine as well as a team of customer service agents who will visit clients in their offices.

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CRUISE INDUSTRY

Starboard Cruise Services showcase luxury products aboard the Genting Dream in a series of Dream Boutiques

Cresting

the waves by

REBECCA BYRNE

recent study by the Cruise Lines International Association (CLIA) showed that Asian markets have experienced the most growth year-onyear in ocean cruise passengers with an impressive 24% increase from 2014 to 2015 and a total of 2.08 million passengers in 2015. Asian cruise deployment, capacity and destinations have also been showing remarkable growth. In 2016, around 60 ships were operating, up from 43 in 2013 with the number of cruises and voyages almost doubling over the same period.

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

Helping fuel the growing Asian cruise market is the large increase of Chinese cruisers. China is now the industry’s fastest growing market, with package sales expected to hit US$10 billion next year. From 2012 to 2015, the number of Chinese passengers grew at an annual compounded rate of 66%. More than one million mainlanders hit the high seas in 2016 representing close to half of the Asian volume, and whilst Chinese Ministry of Tourism expects the number to more than quadruple by 2020, industry pundits say that this is a more than conservative estimate.

The cruise industry has set the course for China’s lucrative yet barely tapped leisure market, a decade after the major players began docking along the Asian giant’s Pacific coast. Royal Caribbean’s most technologically advanced cruise ship, Ovation of the Seas, headed straight for China after delivery in 2016. Royal Caribbean is adapting its ships to suit Chinese tastes. That means more shopping and new restaurants, for example A “Kung Fu Panda” themed noodle bar has replaced the Johnny Rockets diners usually found on Royal Caribbean ships. Carnival, the world’s largest cruise operator, is also betting on the growing market. It currently has six ships based in China, with three more joining this year and another two arriving by 2020. The industry’s third largest company, Norwegian Cruise Line is preparing to enter the Chinese market this year. China is also sinking billions into the industry. Indeed, port infrastructure in China has been improving remarkably over the last few years. Ten new ports are under construction and the first MadeIn-China cruise ship is expected to hit the water in 2020. It is part of a US$4 billion joint venture between China State Shipbuilding, China Investment Corp and Carnival.

Chinese customers on board the Genting Dream enjoy both international and Korean make up brands

When the Genting Dream cruise ship arrived in Guangzhou, it marked the first time a luxury cruise ship of this scale had home-ported in Guangzhou. Being the first company to offer cruises in China over 20 years ago with Star Cruises, Genting Hong Kong conceived Dream Cruises as the first-ever Asian luxury cruise line. When World Dream joins her sister ship Genting Dream in November 2017, Dream Cruises will have the newest fleet, 100% dedicated to the Asia cruise market. Starboard Cruise Services manages Dream Cruises’ onboard shopping. Starboard, owned by worldwide luxury provider LVMH Moët Hennessy Louis

Vuitton, specializes in duty free shopping and has special expertise in luxury brands, two important attractions for Asian travelers. With a separate Asia division based in Hong Kong, Starboard has been steadily building its presence in the Asia market. The company is a long-time onboard retailer for leading cruise lines in Asia. David Goubert, Starboard Cruise Services Senior Vice President, Luxury and Asia Office says: “China is a very important market for Starboard. We have been investing resources there for many years and are now the market leader in China. With rapid growth in recent years, this market now represents a significant

share of our business, and we expect the growth to continue in coming years.” The company’s strategy is to partner with different cruise lines to align on the best positioning of its stores, providing the best brands and tailoring the experiences to the guests. Goubert adds: “We have a wide variety of brands at many price points, so we are able to customize the experience for each cruise line. But we find that we are especially strong in the premium and luxury cruise sectors in China, partly due to our strong relationship with our parent company, the worldwide luxury retailer LVMH Moet Hennessy Louis Vuitton. And, of course, our emphasis on creating memorable experiences rather than merely selling objects aligns well with the Asia cruise guest’s desire for unique and authentic experiences. We also know that our longtime experience in tax and duty free shopping has a strong appeal for the Asia guest, who appreciates value as much as name brands.” Goubert comments that Genting is a key strategic partner for Starboard. The company provides a range of travel retail onboard the Genting Dream, including: Swiss timepieces, with brands such as Cartier and Omega; jewelry with brands including Bulgari and Mikimoto; a range of beauty products from international brands such as YSL, Estee Lauder, and top Asian brands such as WHOO, and su:m37; fine-leather products from Bally and Burberry; and sunglasses including Gucci, Prada and Ray-Ban.

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CHINESE TRAVELERS IN KOREA

The Shilla Duty Free has been successfully operating more than 30 years

GOING IT

ALONE

ut of the six million Chinese nationals who visited South Korea last year, nearly 60% were independent travelers, according to the Korea Tourism Organization. As a result, South Korean duty-free operators have stepped up customized marketing targeted at millennial shoppers and cash rich travelers from China, who have become key customers over the past few years. The Shilla Duty Free, a travel retail company that has seen success over the past 30 years, says that millennial shoppers from China are now its main visitors. The rate of increase in this demographic is startling. Taking the Chinese National Holiday as an example, in 2009 millennials accounted for 30.2% of visitors to Shilla stores. In 2016 they accounted for 72.7%. The Shilla Duty Free says that this age group shows unique behavior throughout their travel including both pre- and posttravel stages. First of all, they gather information for their travel from on-line and mobile channels where they are influenced by friends and spokespeople. During their trip, millenials utilize mobile devices for information searching, purchasing and sharing. They look up details of where they are next heading, they ask for recommendations and suggestions from their friends in China in real-time. After their experience, they upload pictures or videos on their timeline instantly to share them with their

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

REBECCA BYRNE

friends who are also looking for an authentic voice of real people before they begin their visit to South Korea. According to a Shilla company spokesman: “These young Chinese travelers show completely different travel pattern from older generations. They look for deeper and more detailed experience of their travel destinations. Due to such demands, a simple shopping tour is less attractive to this younger generation. They are eager to have more chances to explore the city.” “Many young Chinese still get aid from travel agencies however it’s quite different from what it was like before. Travel packages only cover some parts of the entire trip and leave the rest to the travelers’ own.” Indeed, travel agencies now have much less influence on the travelers’ choice and schedule than they had before. How is The Shilla Duty Free capturing this explosive market? By offering unique benefits and experiences to cater to the younger generation’s distinctive needs and preferences, for example, The Shilla Duty Free has a special membership for Chinese foreign international travelers (FITs). This covers not only additional discounts and shopping benefits, but also gives them access to cultural experiences in Seoul such as the theatre as well as discounts at restaurants in the city. As the young Chinese are affected by word of mouth, The Shilla Duty Free recruits power-

Seongho Han, Director of Duty Free Shop Division, Hanwha Galleria Timeworld, said: “Instead of shopping spontaneously, Chinese FITs plan in advance by collecting frank reviews and recent information via mobile, and then purchase various brands and products based on their personal preferences and characteristics. In addition to shopping, they also prefer experiencing the local area while visiting. “To meet the needs of travelers with fast-changing travel patterns, we are constantly developing experience-based content, including eight different themed tour courses to explorer Yeouido area.” For millennials visiting the store in the evening, Galleria Duty Free 63 provides special gifts for purchases after 6pm. Moreover, in-store promotions are focused on experience-based shopping. Promotions provide numerous benefits offered based on the amount purchased such admission tickets to 63 Art, Aqua Planet 63, Yeoui Ice Rink, vouchers for chicken & beer package and Han River duck boat ride.

At Galleria Duty Free 63 popular products with the Chinese independent traveler includes local Korean delicacies

ful Chinese social media key opinion leaders to create content about benefits of The Shilla Duty Free. The company is also extending a mobile app service to tap into mind set of the younger generations. This offers a variety functions over and above the official website and on-line duty free shopping. This includes the ability to purchase with a QR code in downtown stores, voice recognition and access to the Incheon International Airport pick-up lounge smart queue. More functions are being added to better serve the users. As various mobile payment measures are competing in mainland China to win the market and FITs are active users of this payment system, The Shilla Duty Free has also introduced Chinese payment measures to further facilitate the millennial’s shopping experience. The travel retailer has already introduced Alipay and Wechat pay enabling customers to easily make a purchase with their mobile device both on and off-line. In addition, The Shilla Duty Free was the first to introduced the UnionPay simple payment system in South Korea and will continue to extend its coverage for various payment services. A newcomer to the market, Galleria Duty Free 63 has been operating its 10,153 square meter store in Seoul since its preopening in December 2015. With Chinese nationals accounting for 90% of total customers, the company has also seen a sharp increase in FITs. Although this demographic only accounts for 5% of the overall customer, with over 50% of this number being millenials, it is increasing significantly every month. Among Chinese FITs visiting Galleria Duty Free 63, 60% is female in their 20s to 30s. Popular products include Korean cosmetics, such as Sulwhasoo, It’s Skin and Whoo, as well as various Korean goods. However, it has been noted that young travelers in their 20s have recently been showing a shift in their shopping patterns towards luxury brands like Chopard and Stefano Ricci. Galleria Duty Free 63 also recognizes that the independent customer has a different approach to travel plans.

Galleria Duty Free 63 celebrated its grand opening in July 2016

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CHINESE TRAVELERS IN KOREA

独行天下韩国旅游零售商接待的自由行游客数量迅速上升。自由行游客与传统跟团游客习惯截然不同，前者更留意新的信息渠道。

Galleria Duty Free 63 celebrated its grand opening in July 2016

During their trip to Shilla Duty Free stores, millenials utilise mobile devices for information searching, purchasing and sharing.

Shilla offer unique benefits and experiences to cater to the younger generation’s distinctive needs and preferences

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

Young travelers in their 20s have recently been showing a shift in their shopping patterns towards luxury brands like Chopard and Stefano Ricci

据

韩国旅游发展局统计，去年以来韩旅游的中国游客数量为 600 万，其中将近 60% 为自由行游客。因此，韩国免税运营商专门制定了针对来自中国的千禧购物者和豪客的营销方案，过去几年间这些人已经成为韩国免税运营商的重要客户。有着 30 年成功历史的旅游零售运营商新罗免税店表示，目前进店购物的主力军是来自中国的千禧购物者。到店的千禧购物者数量的增幅令人乍舌。以中国国庆假期为例，2009 年千禧游客占新罗免税店店内访客的 30.2% 。2016 年，这个比率上升至 72.7%。新罗免税店表示，从旅行开始前到旅行结束后，这个年龄层在整个旅程中都表现出独特的行为方式。首先，他们从网上和移动平台上搜集旅行信息，因而很容易受到朋友和信息分享者的影响。在旅程中，千禧游客使用移动设备搜索信息、购物并分享信息。他们会查找下一个目的地的详细资料，还会向在中国的朋友实时咨询，寻求意见和建议。旅行结束后，他们会立即上传图片或视频，与计划去韩国旅游的朋友们分享真实的体验。新罗公司发言人表示：“这些年轻的中国游客展示了与旧一代完全不同的旅行模式。他们想要从旅行中寻找更深切、更具体的体验。因此，简单的购物之旅对这些年轻一代没有多少吸引力。他们热切希望能有更多机会来了解这个城市。” “许多年轻人仍会从旅行社获取帮

Millennial shoppers from China are now Shilla’s main visitors

助，但与从前的方式大不相同。旅行套餐只包含部分行程，旅客可以自行安排其他的活动。”事实上，当前旅行社对游客选择和行程的影响比以前更小了。新罗免税店如何把握如此火爆的市场？提供独特的福利和体验，迎合年轻一代的独特需求和喜好，例如，新罗免税店为中国的 FIT 游客提供了特别会员资格。这不仅包含额外折扣和购物福利，还让他们能够使用首尔的文化设施（如剧院），以及在首尔的餐馆内享受折扣。由于中国的年轻游客会受到口碑的影响，新罗免税店招募强大的中国社交媒体关键意见领袖，发布有关新罗免税店福利的内容。该公司还将移动应用服务扩展到年轻一代。这比官网和在线免税店提供的功能更多，包括在市区商店扫二维码购物、语音识别、进入仁川国际机场候车厅智能队列等。更多功能正在陆续增加，以便为客户提供更好的服务。由于各种移动支付方式在中国大陆激烈竞争，且 FIT 是这种支付系统的积极用户，新罗免税店也引入了中国支付方式，以进一步提升千禧一代的购物体验。旅游零售商已经引入了支付宝和微信支付方式，让客户能够轻松利用移动设备在线或离线购物。此外，新罗免税店是韩国首个引入中国银联支付系统的商家，并会继续将其使用范围扩展到不同的支付服务。格乐丽雅免税店 63 是免税店的后起之秀，自 2015 年 12 月筹备开业起，该免税店在首尔拥有 10,153 平

方米的经营场地。随着中国顾客占到总客户人数的 90%，这家公司的 FIT 数量也在急剧上升。尽管这个数字只占全体客户的 5%，但其中 50% 为千禧游客，而且数量还在逐月大幅增加。在格乐丽雅免税店购物的中国 FIT 中，60% 是 20-30 岁的女性。雪花秀 (Sulwhasoo)、伊思 (It’s Skin) 和后 (Whoo) 等韩国化妆品和各类韩国商品都极受欢迎。但也有调查注意到，20-30 岁的中国年轻游客的购物模式最近有一些变化，他们更青睐萧邦 (Chopard)、史蒂芬劳·尼治 (Stefano Ricci) 等奢侈品牌。格乐丽雅免税店 63 也发现，自由行客户有着不一样的制定旅行计划的方式。韩华格乐丽雅 Timeworld 免税店部门主管 Seongho Han 说：“中国的 FIT 在购物前会做好充足功课，用移动设备提前搜集评论和最新信息，然后根据个人喜好和特点购买各种品牌和产品。除了购物，他们还喜欢在旅行时体验当地生活。 “游客的旅行模式正在迅速变化，为了满足其需求，我们不断开发体验式旅游内容，其中包括汝矣岛地区八大主题旅游线路。” 针对晚上进店购物的千禧游客，格乐丽雅免税店 63 为下午 6 点后进店购物的顾客提供特别礼品。此外，店内促销活动关注体验式购物。促销活动根据购物金额提供各类优惠，如 63 艺术、海洋星球 63、汝矣溜冰场入场劵，鸡肉啤酒套餐和汉江鸭子船乘坐代金券等。

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KING POWER GROUP (HONG KONG) TRAVEL RETAIL

industry

guru by

REBECCA BYRNE

“I

am addicted to this industry,” says Sunil Tuli, Managing Director of King Power Group (Hong Kong) Travel Retail. “It is a fascinating business to be in, the products you deal with, the people you meet, the technology part of it, the store design. It is a lot of fun.” Indeed, he has been working in travel retail for the past thirty years, moving from Delhi, where he worked with the India Tourism Development Corporation to Singapore, with Weitnauer (now Dufry), where he was responsible for their operations in the Asia Pacific and Middle East regions. He has been with his latest company King Power since 2003. With his breadth of knowledge in the industry garnered over the three decades, Tuli is eminently qualified to talk about the changes and challenges both in the past and future. 28

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

Tuli begins by talking about the many game changers in the industry such as the EU abolishing duty free in the 1997, the restrictions on tobacco and liquor, 9/11, the SARS crisis. He sees technology as being the latest game changer bringing as many opportunities as it does challenges. “Technology has transformed the industry, from stock control and payment methods, designs, marketing innovations etc and will continue to do so with the era of virtual reality and artificial intelligence on the near horizon.” Of course, the downside is the multitude of channels that bring increasing competition in terms of prices. Duty free prices are being undercut by online sellers who do not have high fixed costs to cover. However, as Tuli points out threats of this kind have always faced the industry with the increased competition from discount-

ers, outlet malls and parallel traders. He says that the secret is to grow and adapt. Similarly, he does not believe that there is a magic solution to counter the burgeoning threat of e-commerce, but that retailers will need to do the best that they can in terms of pricing, service, technology, store design and convenience to attract customers. He highlights the fact that people will always want to shop in stores so that the industry will not collapse under the online threat, but that retailers have to keep up with the advantages technology offers and look to maximizing their potential. In fact more companies have been pushed out of business, not by the threat of technology, but by the faltering global economy, adverse currency movement and a reduction in spending by the Chinese.

AWARD-WINNING FLAVOR

C R A F T E D C A R E F U L LY. D R I N K R E S P O N S I B LY. W O O D F O R D R E S E R V E K E N T U C K Y S T R A I G H T B O U R B O N W H I S K E Y 4 5 . 2 % A L C . B Y V O L . T H E W O O D F O R D R E S E R V E D I S T I L L E R Y V E R S A I L L E S , K Y. WOODFORD RESERVE IS A REGISTERED TRADEMARK. Â©2017 BROWN-FORMAN. ALL RIGHTS RESERVED.

KING POWER GROUP (HONG KONG) TRAVEL RETAIL

Looking to the future, Tuli has stark words for landlords. “I have said this many times, but airports have to understand that operators paying unreasonably high rents does not help the industry. So many companies have come and gone because of it. It is not so bad when the economy is doing well and you can make money, but bids have to be sustainable throughout downturns as well.” Tuli points to the recent tender at Hong Kong International Airport, where the current operator has not exercised the option of extending its lease. The economic climate has changed markedly from when they originally won the business. King Power is one of three companies that have put in a bid to manage both the beauty & accessories and liquor, tobacco & gourmet core concessions. Tuli says that King Power’s bid is a pragmatic one. “We have put in all the key measures in 30

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

the bid from technology innovation to store design. The one thing I will say is that we feel our bid is a solid one, we can make something out of it and not cut corners or back off from what we have promised. This helps the airport, the customer and is a good experience for everybody.” Tuli admits to having made mistakes in the past in putting in bids that have been overblown and lost money. He has learnt from this and now sees little point in putting in an unrealistic bid simply to gain brand exposure when this is not sustainable. “You work the numbers out to the best of your ability, if someone wants to make unrealistic expectations then you have to hope the airport will see through that.” Outside of Hong Kong, Tuli says that King Power is looking for opportunities in China. The company is somewhat of a

duty free pioneer in the mainland. Back in the 1970s, King Power’s owner, Antares Cheng, introduced the concept of duty free in China. The first store was operated by the government with King Power holding the rights to supply product from its base in Hong Kong. In the early 2000s King Power joined forces with China Duty Free Group, to develop and build the first downtown stores in Shanghai and Dalian. This joint venture lasted for a few years. Since then, the King Power business in China has grown exponentially. Now it runs travel retail stores at domestic airports in China, an area where Tuli sees tremendous growth. “The travel retail business in China is huge, you only have to look at the hundreds of millions of Chinese traveling during their holidays. We have done lots of business with China and have all the distribution channels, and infrastructure in place with other group businesses, for expansion into secondary airports.” On a more personal note, Tuli believes that his longevity in the industry is due to the fact he is constantly upgrading his own skills. Every time he sees something new in travel retail he wants to know how it works. He shares an example of coming to Singapore when computers were being introduced and attending evening classes to understand how to use Lotus123, and upgrade his knowledge from what he knew, which was in essence how to play Pacman. Almost thirty years on he is researching virtual reality and its implications for travel retail. “Never ask someone to do something that you cannot do yourself ” is his motto. “You have to know everything and I make sure that I understand my business better than anyone else.” Tuli is a keynote speaker at the TFWA China’s Century conference on March 9, 2017. Sunil Tuli, Managing Director of King Power Group (Hong Kong) Travel Retai

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CHANGI AIRPORT

Changi’s growth soars Changi Airport, the world’s sixth busiest hub, is going through a transformation over the next few years with the openings of Terminal 4 and Jewel Changi Airport. Asia Duty Free Magazine talks to Teo Chew Hoon, Senior Vice President Airside Concessions about the successful retail offering already at the airport, and what we can expect in the future

Jewel Changi Airport will enhance the overall passenger experience with its myriad range of lifestyle offerings when it opens in 2019

Set to open in the second half of 2017, the upcoming Terminal 4 will see unprecedented retail concepts for Changi

Asia Duty Free: You have had a successful 2016, posting an all time high concession sales turnover of S$2.3 billion (US$1.6 billion) in 2016, up 5% year-on-year. To what do you attribute your success? Teo Chew Hoon: Over the past two years the growth in air traffic and passenger footfall has enabled a bigger audience to gain exposure to our retail offerings. Besides this, our retail performance for the last year can also be attributed to an effective retail mix and the various promotions we have that have helped to drive concession sales at Changi Airport. These include the annual ‘Be a Changi Millionaire’ retail promotion and ‘Pokémon at Changi’ year-end celebrations. These campaigns have created much excitement and buzz among our shoppers and provided strong support to the concessionaires at Changi. ADF: What new retail innovations will passengers have experienced over the past year? TCH: Experiential retail concepts continue to be an area of focus for Changi, as we constantly look to enhance the retail mix and experience to delight passengers. Last July, we celebrated the opening of the second DFS Wines & Spirits Duplex store at Terminal 2 that boasts three unique in-store concepts – the Wine Reserve, the Cigar Room and The Whiskey House, where guests can enjoy complimentary tastings of over 100 different whiskies from around the world.

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

With a total space of 195,000 square meters, the two-storey terminal will have 17,000 square-meters of retail and dining space for more than 80 outlets

Pop-up activations such as the recent Male Grooming Club, a partnership with Philips Shavers and L’Oréal Paris Men Expert, also surprised our male travelers with complimentary pre-flight pampering. We also saw the global launches of products in our most popular categories of Cosmetics & Perfumes and Liquor & Tobacco –Shiseido’s new Rouge Rouge collection and the Martell Cordon Bleu Extra, to name two examples. The demand for delicatessen and confectionary products has seen a 25% year on year increase in 2016, presenting a good opportunity to expand the offerings available. Changi has hence been introducing more of such products to its shoppers, including souvenir food concepts, which have proven to be very popular with our passengers. ADF: You have talked in the past about the importance of e-commerce, how is ishopChangi doing? TCH: Online shopping is a growing lifestyle choice, and we are pleased that iShopChangi is increasingly gaining traction with our passenger base. As an extra avenue of sales complementing our offers at the retail outlets at Changi Airport, it has seen very positive growth over the years, with both website traffic and sales increasing by over 70% year-on-year. The range of products has also been expanded to over 10 categories since its launch in 2013, now offering more than 6,000 items for passengers who prefer to shop online. New product categories last year include books &

Teo Chew Hoon, Senior Vice President Airside Concessions

Airlines which have confirmed operations at T4 include Cathay Pacific, AirAsia Group (includes AirAsia Berhad, Indonesia AirAsia, Thai AirAsia), Korean Air,and Vietnam Airlines, Cebu Pacific and Spring Airlines.

Changi Airport has seen impressive growth over 2016

toys, LEGO and the highly popular Love SG featuring souvenirs, which are uniquely Singapore. ADF: What can you tell us about Terminal 4? TCH: Set to open in the second half of 2017, the upcoming Terminal 4 (T4) will see unprecedented retail concepts for Changi. The terminal is designed in a way that will allow passengers more time to indulge in a variety of fashionable shopping and dining options, and explore the terminal’s visionary retail concepts – impressive high ceilings and double-volume façade shops. In a Changi first, passengers will have a unique walk-through experience shopping for Liquor & Tobacco and Cosmetics & Perfumes. Furthermore we have a heritage row of shops which will sell our local and ethnic offerings. With a total space of 195,000 square meters, the two-storey terminal will have 17,000 square meters of retail and dining space for more than 80 outlets.

ADF: How important do customers from China continue to be in terms of retail spend? TCH: Making up Changi Airport’s third largest country market in terms of passenger traffic in 2016, travelers from China remain the top spenders at Changi. Spend by Chinese nationals accounted for 30% of Changi Airport’s total concession sales last year and we are seeing a mix of independent and group travelers. Perfumes and cosmetics, and liquor and tobacco continued to be the two most popular product categories, followed by luxury goods, electronics and gadgets, and chocolates and candies. ADF: Finally, what is the update on Jewel, the lifestyle destination being developed in the heart of the airport? The retail experience at Jewel will be customized and curated to deliver the vision of it being a world-class icon of Singapore. The commercial offerings will be unique and attractive to both international travellers as well as local visitors. Jewel’s offerings will appeal to the middle-income and wellheeled residents and travellers. At the same time, there will be affordable retail offerings and familiar home-grown brands that will appeal to the everyday shopper and add a local flavor to the international travelers. There will be approximately 300 shops in Jewel, with about 30% of the space dedicated to F&B and 70% to retail, occupying approximately 90,000 square meters. Shoppers can look forward to a comprehensive range of product and service offerings and a good mix of new-to-market and unique concepts to create a great shopping experience. Jewel Changi Airport is expected to open in early 2019.

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GUEST WRITER

Facing

future challenges In this guest writer piece, ETRC President Sarah Branquinho provides a detailed overview of some of the major issues (threatening the industry in Europe and elsewhere) that are being addressed by ETRC by

Restrictions on carry-on baggage Although some airlines have relaxed excessive restrictions on carry-on baggage, many still require items purchased in duty free shops and carried in shopping bags to be placed inside their hand baggage or charge for the additional items to be placed in the hold. Seen by some airlines as an opportunity to increase ancillary revenues, the variation in policies is creating confusion for travelers and undermining passengers’ confidence in carrying their duty free purchases onboard their flights. This is not only an issue for low-cost carriers, as restrictions are also being applied by some legacy carriers. While RyanAir is currently contemplating the reintroduction of a strict one-bag rule

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

SARAH BRANQUINHO, President, ETRC

policy, the recent announcement by United Airlines to charge passengers for the use of overhead lockers to stow carryon luggage through the introduction of a new “basic economy fare” is the latest in a range of varying rules that is contributing to the confusion for travelers making duty free purchases. Elsewhere, we are now seeing restrictions being imposed by airlines that hand luggage must be within a certain weight limit, sometimes as low as 7/8 kilos. This confusion and uncertainty for travelers and our customers arising from differing rules imposed by airlines, and even by the same airline on different routes, leads many potential customers to decide not to purchase duty and tax free items in case there is a problem carrying such goods onboard. It is important that the duty free and travel retail (DFTR) industry works with our airport partners to ensure that they understand the implications for their retail income and address this issue with the airlines within their air service agreements.

Information to consumers and product labeling The ever-increasing demand from legislators, consumer organizations and many politicians for new and additional information to be provided on all products to allow consumers to make informed choices is creating enormous challenges for the global DFTR industry. It is anticipated that as well as tobacco, all leading product categories in our retail channel, including alcohol, food and confectionery, beauty and fragrances, will at some point in the future be subject to demands for the labeling of allergens and ingredients and additionally for consumables, nutritional information and health attributes. The requirement to provide all consumers with information on-pack creates substantial problems for the DFTR channel, particularly when national language requirements or specific national/regional labeling rules are incorporated in regulatory initiatives. One of the issues the food industry has been struggling with for the DFTR channel is EU legislation on food information to consumers where there

“We are now seeing restrictions being imposed by airlines that hand luggage must be within a certain weight limit, sometimes as low as 7/8 kilos,” says Branquinho.

cannot be more than one nutritional table, e.g. the EU table, for food products sold in the EU. A nutrition declaration in the format required by the US, for example, would not be in line with the EU requirements, making it extremely difficult to have only one global product for our retail channel. The industry urgently needs to find alternative ways to provide the required information to the consumer, other than placing that information on the product and its packaging. ETRC is currently assessing a number of alternative technological solutions that may achieve the goals of the regulator but without placing the DFTR industry at a competitive disadvantage and reducing consumer choice.

Mexico, Uruguay, Chile and Argentina have all tabled proposals for the removal of tobacco branding within the next few years. The removal of tobacco branding and the imposition of standardized packaging is now a primary goal of the tobacco control NGOs when influencing governments on health policies, as was confirmed during the recent World Health Organisation’s conference on tobacco control in New Delhi last November. In our view, it will be critical that the DFTR industry closely monitors these developments and is ready to react wherever such a policy proposal is forthcoming from government agencies seeking the provision of an exemption for our unique retail channel.

In Europe, we are in the process of agreeing arrangements for increased cooperation with our airport partners, ACI Europe, to defend the uniqueness of airport retail from regulatory and legislative developments and to highlight the importance of non-aeronautical revenues. ACI Africa is currently considering how to reach out to their airport members to focus on non-aeronautical revenues and airport retail, particularly as there is a growing move towards regulatory restrictions on many of the core product categories for duty free in the region. Enhanced cooperation with our airport partners must be a primary goal for all our duty free/travel retail trade bodies across the globe.

Cooperation with ACI regional teams

The industry’s active regional and national trade associations continue to address these and the many other challenges facing the DFTR industry but can only continue to do so with the support of all retailers, brands and other allied stakeholders operating in this unique and vibrant industry.

ETRC very much welcomed the adoption at the ACI World Governing Board in Panama on August 30, 2015 of a resolution entitled “Protecting Airports’ Non-Aeronautical Revenues – Global challenges facing the industry”.

We need your support

The challenge to tobacco from standardized packaging Following Australia’s decision in 2011 to adopt standardized (or plain) packaging, the UK, France and Ireland have all introduced legislation removing branding for tobacco products, and all without providing an exemption for the duty free channel. A number of other countries are now planning to follow suit in the near future, including New Zealand, South Africa, Singapore and Canada, as well as Norway, Finland, Belgium and Hungary in Europe. In Central and South America, Brazil,

ETRC’s President Sarah Branquinho with Violeta Bulc EU Commissioner for Transport

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MISAKI

The pearl of the jet set Misaki celebrates 30 years of travel retail success with the unveiling of a new collection based on a fresh creative concept

uxury jewelry brand Misaki celebrates its 30th anniversary in travel retail this year. A forerunner in the market, the brand began by offering its collections exclusively onboard airlines, before expanding into the wider travel retail channel. Three decades on, Misaki has also continued its growth with its entry into the domestic market. Thanks to its purchase by the Altéal group in 2014, the brand has multiplied its business partnerships in different channels. Today Misaki is present in over 80 countries. Airline customers include Air France, Lufthansa, Swiss, and Aeroflot In Asia, it counts Lotte, Valiram, Trend Mecca, and KLCC as clients, while in Western Europe the brand can be found at Munich Airport and Vienna Airport. In Eastern and Central Europe, it has a presence in Moscow Sheremetyevo Airport, Moscow Vnukovo Airport, Kiev Boryspil Airport, and Kiev Zhulyany Airport with clients in the cities of Moscow, Budapest, Riga, Vilnius and Baku. For the 30th anniversary of the brand, Misaki will unveil a fresh visual identity, with its new logo, Misaki Monaco. The brand aims to establish its legitimacy and know-how by linking its image directly to that of its home country, Monaco, visibly marking and underlining its origins that make it an integral part of the Principality. A specific “30 year” logo will also accompany all visual and communication materials for the brand in 2017. Powered by its well-established presence internationally, which continues to grow, Misaki is finally launching its collections in France, thanks to its new partnership with a French distributor. In addition, a Misaki store will begin trading

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

Created for Misaki’s 30-year anniversary, this collection pays homage to the core identity of Misaki, and to its home base of Monaco.

in Beijing in the spring. This opening will feature the brand’s all-new boutique concept, which will be presented exclusively at TFWA in Cannes next October. Created in 1987, Misaki is a luxury jewelry brand, specializing in an emblematic material – the pearl: cultured pearls, and glass pearl beads. Based in the Principality of Monaco, Misaki combines the beauty and perfection of pearls with original and modern designs. Born from a love story between two globetrotters, a French photographer and a Japanese illustrator, the Misaki brand considers itself the pearl of the jet set. The design of the collections is refined and contemporary, mixing pure shapes with precious, quality materials. At the end of 2014, the brand was bought by the French group Altéal, which wanted to develop it and give the brand a fresh dimension. Misaki modernized its image thanks to a new artistic direction. A new collection concept was created, inspired by jazz music and dance. Each of these collections is reminiscent of a melody, a tune (Cheek to Cheek, Almeria), and each creation is named after a song lyric.

Far from the usual clichés surrounding classic pearl jewelry, the brand now offers more contemporary and creative interpretations, highlighting a “new wave” pearl, inspired by the glamorous sophistication of being Made in Monaco. The first collection, Cheek to Cheek, inspired by the famous duo of Ella Fitzgerald and Louis Armstrong, presented very graphic models, that played with asymmetry and interlacing, where the pearls were placed alongside each other, as if cheek to cheek. The second collection, Almeria, paid homage to the passionate love story between Brigitte Bardot and Serge Gainsbourg which he wrote about in his song entitled “Initials BB”. The jewelry pieces are rhythmic and sensual, with the pearls tenderly entangled together. The next collection, created for the 30-year anniversary of the brand this year, pays homage to the core identity of Misaki, and to its home base, the emblematic town of Monaco. Certain lines will be previewed at the TFWA Asia Pacific show in Singapore.

For Misaki’s 30th anniversary, the company will unveil a fresh visual identity, with its new logo

EDITOR’S CHOICE

Temptations galore An inspired collection of the most covetable luxury items for globe-trotters

1. Godiva Expression Artistique: The Belgian chocolatier introduces an artistic addition to its gifting portfolio. The unique gift box displays colors reminiscent of an artist’s palette, ensuring the box is as tasteful as its contents 2. Balmoral Dominican Selection – Private Collection 25: Balmoral releases its exclusive limited-edition box of Dominican Selection cigars. The elegant piano lacquer finish and self-regulating humidification system work to keep the contents fresh 3. Furla Spring/Summer 2017 collection: Inspired by Arabian architecture, tribal prints and wild animal coats, these summery bags feature softer and lighter materials with decorative lines defined by embroidery, lace, laser perforation, and adornments such as tassels, fringes, charms and knots

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

4. Lindor Mango & Cream: Lindt & Sprüngli unveils its new flavor of white chocolate encasing smooth, melting mango and cream. Chocolate lovers are promised a taste of tropical paradise in a yellow limited-edition 387g tube 5. Clé de Peau Beauté Spring/Summer 2017 Concentrated Brightening Serum: Perfect for travelers, the reformulation of this serum has been enhanced with Illuminating Complex EX, which moisturizes and retextures the skin while reducing effects caused by environmental stress, boosting radiance 6. Frey Wille Hommage à Gustav Klimt collection: Gustav Klimt’s “The Kiss” painting inspires the intricate design on this bangle. The design demonstrates the two aspects – the male and the female – each portrayed by specific elements 7. The Portable Hookah by Mazaya: Easy to use, this hookah enables shisha to be enjoyed anywhere and at any time. A variety of flavors are available, including Lemon with Mint, Blueberry Exotica, Grape, Watermelon, and Cherry. Perfectly suited for travel retail, it is compact and easy to use

8 11

8. Philips DiamondClean Rose Gold toothbrush: This toothbrush removes up to 10 times more plaque from hard-to-reach places than a manual toothbrush. The travel case and glass charger with charging function makes this product suitable for travelers, allowing you to take your toothbrush everywhere 9. Cabeau Luggage Tags: Cabeau helps you travel in style with bold and colorful luggage tags. The synthetic leather construction offers durability and the selection of shades allows for accurate luggage identification. The tags are available in grey, purple black and green 10. The Ritual of Ayurveda Hand Balm: Soothe your hands with this Rituals Hand Balm that has been developed to soften dry hands. It contains shea butter and panthenol, a vitamin B5 moisturizer. The Ayurvedic ingredients, Himalaya honey and Indian rose, combine to relax your hands 11. Bottega Bacûr Gin: This gin is produced in Italy using botanicals like juniper berries, sage and lemon zest, ensuring it stands out with its fragrant and natural ingredients. Bacûr is a smooth and balanced gin that warms the palette

12. Buckley London Finsbury collection: This affordable luxury collection is striking in its simplicity, with a shimmering two-tone fin design showcasing a modern, fashion-forward twist on the classic style of fine jewelry 13. Gucci Guilty Absolute: Described as an innovative expression of a men’s woody scent, the intense juice contains three forms of patchouli oils with a sweet, dark and earthy character, and vetiver, the fresh and earthy grass from woods. The bottle offers the textures and colors of cigars and Cognac 14. Maui Jim Monstera Leaf: These glamorous, cat-eye sunglasses feature a handcrafted acetate frame with a temple decor of Hawaiian tropical flowers in 24ct white, yellow or rose gold. The lightweight MauiGradient SuperThin Glass lenses are treated with patented PolarizedPlus2 to provide protection from ultraviolet and glare 15. BioMiracle Pure 24K Gold & Ginseng Hydrogel Mask: This mask improves and revitalizes the skin. Ginseng helps with antiageing and refreshes the look of your skin, while hyaluronic acid lifts and firms. The 24ct gold locks in the moisture for ultra-hydrated skin 16. Sisley Paris Izia: Promising a bouquet in a bottle, this new fragrance has top notes of white bergamot from Calabria, freesia and tea. The bottle, with its rose tints and golden facets, is an abstract piece comprised of two glass sculptures placed one upon the other www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

ORIENTAL G.T.

Tania D’souza, Marketing Manager, Oriental, at the launch or Oris China at MEADFA 2016

Tapping into the new wave of

By addressing a gap in the market for an international Chinese tobacco brand that’s rooted in heritage, Oris China is winning listings around the world

CHINESE SMOKERS

here are more than 300 million smokers in China, according to World Health Organization – that’s nearly a third of the world’s total – but creating a brand that meets their unique preferences can take years of experience. While both homegrown and foreign cigarette brands have found success in the country, the latest player on the scene, Oris China by Oriental G.T., is bridging the gap between these two worlds. As such, the brand has quickly gained an impressive number of listings in travel retail since its launch in November 2016. “Our knowledge and experience in the tobacco business allowed us to grasp the growing needs and demands of Chinese consumers to cultivate our own brand – one that speaks directly to this target market,” said Tania D’souza, Marketing Manager, Oriental, which is headquartered in Dubai. The company, which has been in the Chinese tobacco industry for

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

more than 15 years and was one of the first suppliers of Chinese tobacco and liquor to travel retail in the Middle East and Africa, launched Oris China at MEADFA 2016, marking a bold statement to the industry. The idea for the concept had only come about 18 months prior. “We saw a window of opportunity where we could foresee the unpredictable nature of the Chinese tobacco and liquor industry and nature of Chinese travellers outside of China,” said D’souza. “The influx of Chinese travelers in the last few years has grown exponentially, particularly in areas where their presence was, at one stage, quite small. Thanks to the expansion of airports and overall growth in the aviation industry, Chinese travelers now find it much more convenient to travel abroad whether for tourism or business.” The move certainly seems to be paying off. Oris China is already listed and available in Dubai Duty Free, Qatar

FAYE BARTLE

Duty Free, Qatar Airways Inflight Duty Free, Nur Duty Free – Addis Ababa Airport Ethiopia, King Power Duty Free – Bangkok, Don Muang and Phuket, King Power Duty Free Macau and Lotte Duty Free Jakarta. “Oris China was established to provide Chinese smokers with the perfect combination of an international brand that respects and adopts the vital cultural values with the product preferences of modern-day consumers,” said D’souza. “Our aim is to capture the attention of Chinese travelers on a global scale exclusively through travel retail and tax-free channels such as airport duty free shops, border and downtown stores.”

Cultural connection A substantial amount of research has gone into ensuring every detail of Oris is at its most appealing to Chinese smokers. The word Oris (pronounced Hao Li Shi in Mandarin) means prosperity, luck and

Oris China Chao Menthol Flavour Lights is a popular variety in the affordable super slims line

The Noble Dragon (purple pack) is a premium product with a price range of US$55-60 while The Classic Dragon (red pack) is priced between US$40-$45

Oyuka Byambadorj, Travel Retail Manager, Oriental

The design details for the Oris China brand convey special meanings

good fortune. What’s more, each of the designs convey a special meaning. The cigarettes themselves, which come in six variants, were designed and developed in China by Oriental’s dedicated team of Chinese tobacco experts. “Everything from the tobacco to the packaging and other raw materials used are from China, however, the manufacturing takes place in the UAE,” explains Oyuka Byambadorj, Travel Retail Manager, Oriental. “One of the unique aspects about these cigarettes, aside from the smoke experience, is the attention to detail and the stunning design, which makes them ideal for gift-giving.” Another significant feature is highlighted by the Oris Peace variant, which is the first queen-sized Chinese cigarette in the market. “Queen-sized packaging is common for international brands but not for Chinese brands,” said Byambadorj. “This further reiterates the core values that Oris China brings, namely, our determination to provide something for various

segments of Chinese smokers, whether they prefer a traditional or more modern smoking experience.” Each of the six variants satisfy different price segments. In the premium to mid-range line of king-sized Oris Dragon Empire, for instance, The Noble Dragon (purple pack) is a premium product with a price range of US$55-$60 while The Classic Dragon (red pack) is priced between US$40-$45. Oris Peace costs around US$25-$30 per pack. For the affordable super slims line – Oris Chao Society, Oris Chao Lights and Oris Chao Menthol Flavour Lights – prices range from around US$15-$20. “Since consumers, especially millennials, are becoming more price conscious, we are always looking to provide a variety of products in terms of affordability and exceptional quality to target this particular segment,” said Byambadorj. “Even if we consider pricing as our main strategy, we will never compromise on quality to ensure there is consistency across all our variants, irrespective of price.”

Igniting the future Oriental aims to launch Oris not only in all the major, well-established travel retail outlets but in those tax-free channels where there is a high demand for Chinese products that’s unsupported due to a lack of choice. Well-timed promotions are already helping to raise awareness on the brand. To mark the Chinese New Year, for instance, promotional ‘Rooster edition’ boxes have been available to buy in Dubai Duty Free, Qatar Duty Free and Ethiopia Duty Free. Looking ahead, Oris will be exhibiting at IAADFS in Orlando in March. “For us, travel retail outlets in the Middle East, Africa and especially Asia are the main focal points for the brand,” said D’souza. “Destinations such as Dubai, Abu Dhabi, Qatar, Hong Kong, Singapore, China, Korea and Japan are desired locations. The major growth markets, however, are Africa and South America, where there is a huge population of Chinese people to reach.”

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KAVALAN

Ian Chang, Director of Global Export, is in charge of Kavalan’s global travel retail business, which is a growing market for the brand

Making a

splash

Ambitious Taiwanese whisky distillery Kavalan is breaking out onto the world stage with its high quality single malt whisky portfolio – including a travel retail exclusive product

aiwan is well known as a strong whisky market, so it’s perhaps not surprising that a superior whisky distillery has been created in the country. But Kavalan has really taken the world by storm. In 2015, its Solist Vinho Barrique Whisky was named “the best single malt whiskey on earth”, according to the World Whiskies Awards (WWA), beating out several Scotch whiskies. That is quite an accomplishment, especially given that the distillery was only completed in December 2005, and produced its first spirit in March 2006. So what is the secret to the success of the distillery, which is located at Yuanshan Township, Yi-Lan County. Ian Chang, Director of Global Export, Kavalan, which is a growing market for the brand explains: “Without the climate and natural resources of Yi-Lan, we would not be able to produce these high quality Kavalan whisky expressions. The combination of our craftsmanship and great cask selection contribute to the unique flavors of Kavalan whisky. Moreover, we could not make it without the help and the endeavors of the whole Kavalan team and management. We’ve been greatly encouraged by receiving the prestigious WWA awards twice in a row in 2015 and 2016, which have made people within the industry and consumers alike seriously take notice of us, which in turn encourages us to continue promoting Kavalan and doing our best to make quality whisky.” The two-row malted barley used by the distillery is from Scandinavia and from

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

other parts of Europe and mixed together in the mashing process. In terms of products, the company offers both unpeated and peated whisky. Kavalan Distillery Reserve Single Cask Strength Single Malt Whisky - Peaty Cask is matured in peated malt barrels. The company has even started experimenting with smoking barley itself in Taiwan. Beside that, all of its expressions are unpeated whisky.

Curious and openminded drinkers Kavalan made a big splash at the TFWA World Exhibition last year. The company promoted Kavalan Original – a very limited expression crafted exclusively for global travel retail – to large numbers of potential duty free and travel retail operators in Cannes and was highly praised and appreciated by them, enthuses Chang. Ian Chang, Director of Global Export, is in charge of the global travel retail business. However, due to a prior commitment in London, his colleagues Emma and Kellie will attend the IAADFS show this year. Travel retail is a developing market for Kavalan whisky, says Chang. “According to Airports Council International, the top 50 international airports’ passenger traffic in 2015 was around 2.6 billion. Hence, it is a very good opportunity not only to build a brand image in general, but also to expand brand awareness in the global travel retail market.” Chang believes that as there are more and more curious and open-minded drinkers who have a thirst for informa-

tion behind the label and experiences, there are good opportunities for the firm. “Since the start of its global expansion in 2012, Kavalan has exported to more than 60 countries,” notes Chang. “Kavalan was awarded the Best Single Malt in 2015 and the Best Single Cask Single Malt Whisky in 2016 by the World Whiskies Awards, which means we have become more and more popular and well known in the industry. All of the retailers are very supportive and very keen to promote Kavalan whisky to their customers. Kavalan, both in Asia and outside of Asia, has become a stable growing whisky brand.” To this end, in March 2017, Kavalan is planning to stage an official launch event in the US for its new line of sherry casks, which are Amontillado, Manzanilla, PX, and Moscatel. Chang is also the distillery’s Master Blender and he and the company’s consultant Dr Jim Swan will host a master class to explain how these special expressions are crafted. In addition, as part of its push into the US market, Kavalan’s award-winning whiskies were at time of writing being projected onto the Thomson Reuters Building at No. 3 Times Square, central Manhattan. The company’s hopes are running high. With the addition of its second distillery, its annual capacity could reach 10 million bottles, enabling it to keep releasing different types of barrels to satisfy consumers and meet the rising demands of Kavalan whisky globally. “As Kavalan becomes more and more recognized as a premium whisky brand in the world, we shall keep delivering a spirit of good and consistent quality. The production of high quality whisky sets the foundation and is the first step towards establishing a millennium distillery,” concludes Chang.

Kavalan Original single malt whisky is a very limited expression crafted exclusively for global travel retail

CAMUS

Ambassador

to China Harnessing more than 150 years of spirits expertise, Camus Wines & Spirits is targeting Chinese consumers with Moutai baijiu products and new innovations in the Cognac category

The launch of Camus GMC La Grande Marque Cognac three years ago – only sold in China’s domestic market – has boosted sales

Cyril Camus, the President of Camus and the fifth generation of the founding family, spends a lot of time in China promoting the company and meeting customers

hina has always been a key market for French Cognac specialist Camus. Indeed, Cyril Camus, President and owner of the company, representing the fifth generation of the founding family, created a distribution company in China 10 years ago, back in 2007, and it has never stopped investing in this important market since then. Cyril Camus spends a lot of time in China promoting the company and meeting customers, according to Camus Global Commercial Director, Anne Blois. “Cyril Camus, who speaks Mandarin fluently, is the best brand ambassador a Cognac company could dream of! Chinese customers are very proud to meet him. This has definitely had a positive impact on our business there.” And as Chinese consumers are now among the top consumers in travel retail, the company’s strong presence in China and its travel retail success are certainly related, Blois adds. For more than 12 years, Camus has had a partnership with Chinese baijiu brand Kweichow Moutai, which has also contributed to developing its strong ties with the market. Together the companies developed two Moutai products which are travel retail exclusive and not available in the Chinese domestic market: Moutai Small Batch Blend (SBB) and Moutai Limited China Collection (LCC). The Libai edition is the first product in the LCC collection, and more will be launched in the coming months.

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

Explaining the importance of baijiu in Chinese culture, Blois says: “Baijiu is consumed by all generations in China as it is considered the national liquor. Additionally, Moutai is the top baijiu brand, the one served at official State banquets; it is a luxury brand not everyone can afford.”

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CAMUS

Chinese Cognac market is growing again Turning to Cognac, the mainstay of the Camus portfolio, the anti-corruption policy that started three years ago has affected its sales of XO and above, like it has affected the rest of the industry, the company confirms. But the situation has stabilized over the past year, stock at the wholesale level has been back to normal and the market is growing again. The launch of Camus GMC La Grande Marque Cognac three years ago – only sold in China’s domestic market – has helped sales “greatly.” observes Blois, but the Extra also continues to have a strong share of the market and remains a focus of its business. In China duty free, as well as in worldwide duty free, Camus focuses on its Borderies range with two selections: VSOP and XO. These Cognacs are “single crus” from the rare and exquisite Borderies area (Cru). “The Camus estate of 180 hectares is all in the Borderies cru, making us one of the most important Borderies producers in the region. The Borderies cru, the smallest of all, is considered to be the first district to have been given a name, a century before any other,” explains Blois. Camus also focuses on Extra with two products: Extra Elegance, the original launched in 2000, and the new Extra Dark & Intense, an Extra with a special finish in gently heated barrels to develop gourmet aromas of pastry and spices, which was launched last year.

Targeting the millennial consumer With the spirits industry’s focus on the important millennial consumer group, Cognac suppliers have tried to change their somewhat old-fashioned image. “Cognac is indeed seen in many countries as an old person’s drink, but in the last 10 years our industry has made great efforts to change that perception by portraying different ways and atmospheres in which Cognac can

Thanks to a partnership with Chinese baijiu brand Kweichow Moutai, Moutai Small Batch Blend has been developed as a travel retail exclusive product that is not available in the Chinese domestic market

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2017

A year ago, Camus launched the Destination Collection, spanning Hong Kong (pictured here), Singapore, Paris, Taiwan and Thailand, targeting younger or new consumers who are not necessarily Cognac drinkers

be served and enjoyed,” says Blois. “In the US, it is common for Cognac to be consumed with a mixer or on ice while in China it is largely consumed on ice.” A year ago, Camus launched the Destination Collection, spanning Hong Kong, Singapore, Paris, Taiwan and Thailand, targeted to younger or new consumers who are not necessarily Cognac drinkers. The concept is to offer an exclusive collectible gift or souvenir for travelers to take home from the destination shown on the bottle, with each one only available in the vicinity of that particular city. The Hong Kong edition is available in both 1-liter and 50cl formats. Furthermore, a few years ago, Camus launched Ile de Ré Fine Island and Double Matured Cognac, in a very distinctive bottle to attract younger consumers. In further efforts to boost sales in China, Camus has staged key activations at airports including special displays, gifts with purchase (travel bags, miniature sets), and other promotions. “The Chinese consumer is always looking for a good deal. Additionally, we carry out training sessions with sales promoters, and focus on service, as advising the consumer is very important,” notes Blois. In other Asian airports that target the Chinese consumer, the company has held very similar activations. While the Chinese economy has seen a slowdown, growth is still pretty strong. Certainly, the number of Chinese travelers continues to climb, so how does Camus see that impacting the company in the coming years? “We will continue focusing on travel retail, the China market and Chinese consumers! No doubt the trends we are seeing today will bring our company further growth and opportunities,” Blois concludes.