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TFWA AP 2017

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India on the fast track p. 16  Lagardère grows in China p. 30  Chinese tourists home and away p. 54

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The sky’s the limit A

ll eyes are on Asia in duty free/travel retail, and with good reason. This region has taken over the top spot globally for duty free, and more growth is expected well into the future. Although growth is in the offing throughout the entire region, the focus tends to be on two countries, China and India, the two most populous countries in the world and both with a rapidly increasing middle class. By 2025 this economic class in China is expected to reach 800 million, and in India that number is expected to be approximately 550 million – but still growing. The rate of increase in travel is exponential among this demographic. In this issue Francis Gros, Head of Global Channels for Luxottica, discusses the incredible potential of the Chinese market. He says in the US, 247 million adult consumers buy 104 million sunglasses per year, a penetration rate of 42%. In China 1.4 billion adult customers purchase 37 million sunglasses, a penetration rate of only 3%. Indeed, the Chinese traveler continues to be an important consideration throughout Asia. Korea-based The Shilla Duty Free is just launching its first store outside of Korea in Tokyo, The Takashimaya Duty Free, chosen in part because of the city’s reputation as a tourist destination for Chinese travelers. Meanwhile, travel retail has never had more potential in India. For the successful operator, 2017 will be a year of growth. Mumbai Duty Free sales grew by over 10% in 2015, and 2017 sales trends are showing to be even higher. As Abhijit Das of Delhi Duty Free Services (DDFS) and Paul Topping of Flemingo affirm, the Indian government has helped duty free through its growing economy by investing in ports, airports, and railway stations, leading to an increase in retail space. Airports in India have also seen banner years. For Bangalore International Airport Ltd (BIAL), all commercial categories recording the highest sales since the airport opening eight years ago. There was an increase in sales of 24% for duty-free, 29% for F&B and 25% for domestic retail. Add to all this the reality that even the smaller countries in Asia are increasingly popular as travel destinations for the rest of the world, and it’s easy to see why this region is becoming the duty free-travel retail market of the future. Asia Duty Free will be there every step of the way. Please enjoy this issue, created for the ever-growing TFWA Asia Pacific Exhibition and Conference, where you’ll learn about all this and much more. Kindest Regards,

Hibah Noor Editor-in-Chief



MAY 2017 · TFWA AP · VOL 21 · NO 2

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. May 2017, Vol 21, No.2. 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 PUBLISHER Aijaz Khan EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor SENIOR EDITOR Wendy Morley ASSOCIATE EDITOR Jas Ryat ART DIRECTOR Jessica Hearn CONTRIBUTORS Rebecca Byrne




What’s inside LEAD STORIES 16 India Overview ON THE FAST TRACK

With airports being built and upgraded, a burgeoning middle class with aspirations, and airport retail at international standards, travel retail has never had more potential in India. For the successful operator, 2017 will be a year of growth


As part of its international growth strategy, leading luxury travel retailer, DFS Group has forged key long-term partnerships in Asia

28 Shilla Duty Free BIG IN JAPAN

The Shilla Duty Free’s international expansion program has led to a joint venture duty free store in Japan with department store company Takashimaya and ANA Trading


As a Lagardère Travel Retail continues to grow its business in China, Asia Duty Free talks to Emmanuel de Place, Chief Operating Officer, Asia Pacific and Eudes Fabres, CEO Greater China, about how to succeed in such a large and unique country


2016 was a year of strong growth for Eraman, the duty free arm of Malaysia Airports (Niaga) Sdn Bhd as the company has expanded and developed its portfolio


2017 is a major year for airport tenders in Asia, with several big contracts up for grabs. The competition for airport retail space has never been stronger for the major travel retail companies

30 FEATURES Capturing the Chinese tourist Airports only forum takes off Bhatia Traders’ expanding horizons

40 46 50

Chinese tourists home and away 54 m1nd-set’s Indian insights 58 Louis Vuitton launches at Changi 62






Italian accessories brand Furla has plenty to shout about this year as it marks 90 years in business with a variety of novelties



Lotte Duty Free and Lancôme partner on new store at Seoul’s Lotte Hotel

70 Tateossian TRENDING NOW

The owner of Tateossian is set on replicating the domestic market success of his men’s jewelry brand in travel retail


Roma Boots sets sights on travel retail market, focusing on Asia and Middle East


Already in a leadership position domestically and a power player globally, Loacker is getting set for further travel retail growth with its new innovations

FEATURES Editor’s Picks Confectionery News Liquor News Kavalan makes a splash

65 76 80 82

Edrington’s strong commitment TFWA’s China’s Century conference review Questionnaire: John Gates

84 88 90

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On the

fast track With airports being built and upgraded, a burgeoning middle class with aspirations, and airport retail at international standards, travel retail has never had more potential in India. For the successful operator, 2017 will be a year of growth by


Paul Topping, Director and Board Member Flemingo, comments that confectionary is the strongest growth category


F The Go Duty Free concept has increased retail space at Flemingo’s stores in Chennai

The Cosmetics category performed strongly for Flemingo during 2016

or Flemingo, the biggest player in Indian duty free, 2016 was a year of contract wins and increased store space. The popular GO duty free concept was extended and integrated into shops in eight airports in India, including Chennai, with the rest such as Goa and Calcutta being completed in 2017. This led to strong growth overall with sales in arrival and departure shops increasing by over 50% on last year and new perfume departments showing a 150% growth rate. Mumbai Duty Free sales grew by over 10 % on 2015 and 2017 sales trends are showing to be even higher. There was also growth in India related products at the airport following the introduction of Bollywood related food tea. In Mumbai’s arrivals, the supermarket is being extended with gourmet food and toys soon available. Indian made liquor has started to make a reappearance in the store due to a change in local excise rules. Pre-order is a major sales driver, contributing over 10% of liquor sales. Looking forward to 2017, Paul Topping, Director and Board Member, comments that confectionary is the strongest growth category while perfumes has the potential to grow more. With many shops doubling space in 2016 he also anticipates growth from a wider product offering such as Indian food and gifting. Flemingo is able to continually finesse its product offering through data garnered by its I SAY research program, Topping adds that with data on over 18,000 buyers and non buyers, at airports where the company has stores, they are able to better understand international travelers, their changing desires and expectations. When asked about the integration of e-commerce into operations, Topping talks about the work done through social media platforms such as Facebook and twitter, especially with the highly successful Bollywood promotion. E-commerce has already been established at Kolkata and Chennai locations with Mumbai following soon. While Indian regulations


Ahn Sang Joon, Vice President – Commercial, Bangalore International Airport

Delhi Duty Free Services finished the 2016 with positive growth

and limitations on promoting liquor online, restricts the scope of this platform, he believes that other categories have great potential. Topping comments that the Indian Government has helped duty free through its growing economy and improved and upgraded airports leading to an increase in retail space. He would like to see a better deal on GST, additional allowances on liquor and further development of tourism in India. Of particularly concern looking forward is price perception as online, downtown retailers and the fake market, particularly in the beauty category, could continue to hamper business. At the airport, airlines restrictions on hand baggage could pose as a challenge for duty free retailers. Delhi Duty Free Services (DDFS), which offers the largest duty free retail space in India, finished 2016 with positive growth in spite of the tough trading environment in travel retail. According to Abhijit Das, Head of Marketing, this was achieved by: “innovative marketing campaigns, correct range strategy and 18


focus on superior customer service.” During 2017, DDFS will be undergoing refurbishments on its shops as part of its vision to deliver the best shopping experience to its customers. Das adds that DDFS is focused on achieving a seamless execution of all its refurbishment projects with minimal disruption to passengers. He expects DFSS to perform strongly across all categories during the year, in particular he is expecting Cosmetics & Perfumes to be major growth categories while Scotch & Tobacco are

Abhijit Das, Head of Marketing expects DFSS to perform strongly across all categories during the year

#catchthewave -

likely to prove somewhat challenging. He believes that premiumization in Malts/Liquor & Perfumes will continue to drive growth as customers are always looking for an exclusive product. DFSS has just launched an online prepaid order service for all categories, except tobacco, as part of its commitment to delivering a complete omni-channel experience. Das comments that: “it’s essential to offer these types of services to cater for an ever growing digitally active population.” Das believes that India’s stable central government is supportive of trade and business in general saying: “The government is focused on infrastructure development by investing in ports, airports, railway stations through PPP mode, which will help travel retail growth. In 2017 a GST taxation system will be launched and this is major focus area for government.” He would like to see the avoidance of deep discount based pricing strategy, as the market has become almost too competitive on certain popular products. Rationalization of duty free allowances which are at least 30-40 years old would help travel retail operators in India. Other macro concerns include the impact of Brexit, reduced spends by Chinese passengers and currency fluctuations. Bangalore International Airport Ltd (BIAL) had an outstanding year in 2016 with all commercial categories recording the highest sales since the airport opening eight years ago. There was an increase in sales of 24% for duty-free, 29% for F&B and 25% for domestic retail. During the year BIAL opened seven new outlets, four retail and three F&B. During 2016 BIAL focused on collaboration with conces-


sionaires to introduce and try out new concepts of pop-up shops in F&B category. It started daily product shop to appeal to Middle-East bound passengers as a measure of exploring new market potential, which is already performing well. Other initiatives launched included pick-up on arrival, early bird discount, redeemable voucher and seasonal shopping festivals. According to Ahn Sang Joon, Vice President – Commercial, the airport is constantly improving to provide a new offering and experience for passengers. However the phenomenal passenger growth has also brought challenges in terms of high congestion leading to long wait times for check-in and security which has impacted on sales and performance. He adds that this is a common challenge for all Indian airports and will continue to be for some time into the future. Looking forward Ahn believes that in 2017, the growth in retail will be positive because as the airport prepares to launch nine new stores. He anticipates that growth will remain around 20% with the Fashion & Accessories category showing development potential. Growth in high-end watches and luxury items may slow because of transaction regulations and the possible impact of GST, which will be introduced in July 2017. Ahn comments that this category will need clear price advantage compared with the domestic market and destinations like Middle East or Europe to return to the growth curve. The digital program is the most important initiative for the airport. The commercial team is making efforts to integrate all

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the marketing activities onto the airport mobile app and social media, and will launch an omni-channel service at the airport during the year to provide another easy way for customers to purchase items. Ahn believes that the Indian government is supporting retail sector by opening the door for new brands and investment. More and more global brands are coming to Indian consumer market. If he had one wish it would be that the allowance in alcohol and tobacco would be increased especially for arrival passengers as it is still the single most important category in sales contribution and has great potential for growth. For Raja V Bommidala, Director & CEO of BBM Bommidala Group, the year was stable for its business in India. During 2016, the company added travel accessories and signed new distribution partnerships. The highpoint for the business was its foray into the retail side through its partnership with Porsche. Bommidala Group does the retail design and also opened a Porsche Design shop at Hyderabad Domestic Departure terminal. A new store is planned to open in New Delhi’s airport in the first quarter of 2017. Bommidala believes that in 2017 performance will be strong saying: “India is well positioned as the third fastest growing air travel market in the world. Airports are already seeing growth in the passenger traffic in 2017 and we will see new airports opening and existing ones expanding. We will look to capitalize on these opportunities and I believe 2017 will be a year of positive growth for us.”

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Growth through Partnerships As part of its international growth strategy, leading luxury travel retailer, DFS Group has forged key long-term partnerships in Asia. Philippe Schaus, Chairman and CEO, DFS Group


uring 2017 an upgraded and redeveloped duty free store will open on the Chinese island of Hainan at the Heikou Meilan International Airport. DFS has been an integral member of the partnership to develop the Haikou Meilan Airport Duty Free together with Hainan Provincial Duty Free Company (HNDF) and Hainan Airlines (HNA). DFS has collaborated with HNDF since 2011, when the Chinese operator started its duty free operations, as a consultant on the store design, brand management, assortment planning, product supply, staff training and store operations. This relationship was developed and was instrumental in the successful opening of HNDF’s downtown retail space in 2011. Philippe Schaus, Chairman and CEO, comments: “Over the past five years HNDF has grown into a world class operation. We have been blessed to work with the company and now with HNA, two fantastic partners, in this new project.” According to HNA Group, the parent company of HNDF the store will ‘take advantage of the Hainan international tourism island’s preferential policy given by the country (China) to develop the hot





consumption spots.” The growth of the store has been dramatic with space and brands added over the past five years. Sun Yong, Vice Chairman and GM of Haikou Meilan Airport Duty Free, shares some statistics which demonstrate the success of the store saying: “During the five years since we started, our operating area has expanded from 23,142 square

feet to the present 328,794 square feet; the number of brands has grown from the initial 50 to today’s 350 brands; and our retail revenue has quadrupled to RMB 1.65 billion in 2016 when compared to RMB 380 million five years ago.” He adds that the business has maintained an average annual growth rate of 44%. During this period, Haikou Meilan

The Haikou Meilan Airport Duty Free has maintained an average annual growth rate of 44%


DFS has collaborated with Hainan Provincial Duty Free Company since 2011

Airport Duty Free won the “China’s Best Airport Duty-Free” and the “The World’s Duty-Free with the Greatest Growth Potential” awards. In fact the HNA Group believes that the smooth opening and operation of Haikou Meilan Airport Duty Free Shop has opened up new opportunities for

Hainan’s duty-free businesses as it has promoted the level of the high-end shopping and enhanced the quality of tourism service on the island. In 2016 DFS signed a supply partnership with the Jeju Tourism Organization (JTO) ‘to raise awareness and attract international tourism to Jeju Island, South

During the store’s five years of business, floor space has expanded from 23,142 square feet to the 328,794 square feet



Korea, as well as to provide an elevated retail experience for international tourists’. This partnership was forged after months of discussions with DFS agreeing to use its global network and marketing reach to encourage tourism to Jeju Island, Korea’s largest island and a leading tourism destination in North Asia. In return, it reached an agreement to supply international luxury merchandise to JTO’s new duty free store, which opened in Jungmun in Southern Jeju in 2016. The Jeju Duty Free store is located in one of the largest 5-star beachfront and gaming resorts in Jungmun and carries global brands, as well as local offerings. Schaus comments that: “there is scope for the partnership to extend to other channels in future.”


Big in Japan The Shilla Duty Free’s international expansion program has led to a joint venture duty free store in Japan with department store company Takashimaya and ANA Trading The Takashimaya Duty Free store is located in the new Takashimaya Times Square development in the heart of Tokyo


orean based The Shilla Duty Free (Shilla) launched its latest international project in April 2017 with a 2,800 square meter store in the heart of Japan’s capital. The company said that it chose Japan for its latest international project because of the popularity of the country as a tourist destination, especially with Chinese travellers. With Shilla’s extensive know-how on catering for the needs of Chinese tourists and Japan being in such close proximity to Korea, The Takashimaya Duty Free store was an ideal fit in the company’s international portfolio. A spokesperson commented that Shilla chose to do a joint venture with local experts, Takashimaya and ANA, as “it enhances the stability and speed of launching in a new market”. The Takashimaya Duty Free store is located in the new Takashimaya Times Square development in Shinjuku, Tokyo, one of the most accessible places in the capital city. The district is in the very center of the city and located next to a major transportation hub allowing easy access to Tokyo’s airports and train network. The Shinjuku Takashimaya Department store, which will incorporate the new duty free store, is so popular with tourists that it is already seeing a two-digit increase in tax



refund sales. A spokesperson added that the Takashimaya Duty Free will be fully utilizing the competitiveness of this location to attract foreign travelers. The duty free store offers various brands across Luxury Fashion, Watches & Jewelry, Fashion & Accessories, Cosmetics & Perfumes and local goods including souvenirs and foods. It also has a “Tax Free Zone” offering a wide selection of Japanese local goods. The store is planning to introduce the most extensive line-up of J-cosmetics among downtown duty free stores in Tokyo. J-cos is regarded as one of the most important categories and will be a key focus of the store with considerable space allocated to it. It is anticipated that the new store will attract young and trendy consumers mainly in their 20s to 30s and predominantly female. A main customer will be the Chinese FITS, but the store will also target Chinese Tour Groups, developing offers to appeal to this demographic. A spokesman added that all nationalities would be catered for due to the popularity of Japan for tourists all over the world. The store will provide various ways of payment to ensure convenient and barrier-free shopping experience for foreign customers. To enhance Chinese customers’ in-store experience, popular

Chinese payment methods such as Alipay and Wechat pay will be supported. Foreign customers will be able to collect their purchase immediately without waiting until their departure. Moreover, foreign customers can purchase tax-free items no matter which airport they depart from this will appeal to foreign travellers using airports other than Haneda and Narita airport. The new store opened its doors on April 27, 2018. Alongside a press conference with senior executives from all companies, Takashimaya Duty Free prepared free gift promotions for guests on the opening date. Customers enjoyed various gifts including a tote bag with Takashimaya Duty Free. In addition, the store will offer “Hello Kitty card” to all its foreign customers. “Hello Kitty card” is an exclusive discount card with famous “Hello Kitty” character design for tourists to use throughout the shopping mall.


Lagardère’s first foray into high-end luxury concession was at Kunming’s Changshui International Airport in 2015

Success through Innovation

As Lagardère Travel Retail continues to grow its business in China, Asia Duty Free talks to Emmanuel de Place, Chief Operating Officer, Asia Pacific and Eudes Fabres, CEO Greater China, about how to succeed in such a large and unique country


agardère Travel Retail is one of the major players in the Asia Pacific region with over 300 outlets in eight countries. It employs a different model from the traditional travel retailers with operations across all segments through its three distinct business streams: Travel Essentials, Duty Free & Luxury and Foodservice. The company began its operations in China a decade ago, starting with its news and convenience stores in airports and has made steady progress, gradually introduced luxury brands and food concepts to airports and high-speed railway stations, with over 150 stores in more than 10 airports in Mainland China and Hong Kong.

Lagardère Travel Retail’s first foray into high-end luxury concession was in 2015 at Kunming’s Changshui International Airport, in South-West China. With a store of 1,000 square meters, featuring brands such as Emporio Armani, Salvatore Ferragamo, and Dior, the company sought to capture consumer spend from the 40 million passengers passing through the airport each year. De Place comments on this fast progress: “ We have had our share of learning in such a large country with a wide cultural difference in the many regions.” China represents a modest part of the global footprint but it is fast growing. As tourism has developed over the years and with the dramatic growth of the middle

Eudes Fabres, CEO Greater China

Emmanuel de Place, Chief Operating Officer, Asia Pacific



class, the opportunities for a travel retailer that is agile and can innovate are limitless. The challenge is in being able to move fast enough to exploit the onslaught of opportunity and De Place is forthright in how this should be done. “For me the question is what does it take to be successful in travel retail in China and the rest of the world? I believe it requires the sum of a few core requisites which when added up become a much more complex equation. These are: the understanding of the travel chain specifics; the ability to adapt to the changing habits of the travelers; and the ability to tailor all of this to local needs.” De Place believes that fundamental to solving this complex equation is one key requirement - the ability to innovate. He adds: “This can only be done by empowering the right people. We must do differently things that we do well today and not only do them better.” Fabres echoes the need to innovate saying that 2016 was a wake up call for the industry. The fact that it was a good year of growth of Lagardère Travel Retail is due to the speed with which the company is able to implement new targeted programs facilitated by its well prepared and managed local teams that can react and engage quickly.

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The Liquor & Tobacco concession which includes the widest selection of Chinese liquor assortment, a whisky chamber and an in-store VIP lounge will open in November 2017 In winning the prestigious Hong Kong International Airport in partnership with China Duty Free Group, Lagardère shows its innovative approach to new business

Lagardère Travel Retail is looking at its business from a different angle, putting innovation at the heart of everything it does. It recently announced the creation of a new management board, which will meet six to eight times a year to direct strategy, innovation and transformation. De Place touches on the difficulties of the traditional business model commenting that the relentlessly changing environment, with new habits and new technologies, is putting intense pressure on retailers. To this end he believes that it is important for businesses within the industry to be open with each other. “We cannot work in the same way as we have in the past, innovating behind closed doors. We can do more by sharing and changing to better understand our customer needs and move quickly to meet their needs. We need to open up within our own industry but also to our peers in other industries. We need to look outside of our industry at different companies and even universities, for example, to get different viewpoints on the disruptors to our industry. By doing so we can learn a lot from others’ approach on such things as e-commerce, social media but also much more.” De Place talks about how Lagardère Travel Retail aims to be agile and apply new technologies and importantly get millennials’ viewpoint both as employees and advisors. Recently the company piloted a project with a university in Nantes in France. It challenged a group of



students to analyze the business and come up with what they felt the key disrupters would be and what innovation was needed. “Two weeks later the students presented their findings. It was amazing how perceptive the students were when they had limited experience of our industry. They had very impressive ideas.” When asked about Lagardère Travel Retail’s plans with regards to the digital platform, De Place believes it is required to integrate e-commerce and m-commerce into the company’s retail strategy, understanding the use of smart phones, which have proved a major disruptor to travel retail. He points to the opportunities e-commerce offers in terms of interaction with travellers but from a business point of view, there is much more to do to activate this channel. “It is essential that we adapt our organization and strategies to convert travellers into shoppers at our retail outlets,” he says.

Lagardère began its operations in China over a decade ago

A Combined Approach A recent partnership with China Duty Free Group shows the innovative approach Lagardère Travel Retail has to new opportunities. To pitch for the prestigious Hong Kong International Airport (HKIA) tender in Liquor & Tobacco, Lagardère Travel Retail aligned its expertise with China Duty Free Group’s complementary knowledge to make a formidable team. China Duty Free Group, with its strong position in China and knowledge of the local market, is ideally placed to lead the joint venture. De Place comments that Lagardère Travel Retail can bring considerable expertise to the joint venture with its experience of airports business and knowledge of successfully navigating large tenders such as Hong Kong and Singapore. He points to the company’s good relationships with international suppliers in the liquor industries as being an advantage as is Lagardère Travel Retail’s understanding of merchandising in these categories. HKIA clearly believed that this partnership would be the perfect match for its airport, awarding it the Liquor & Tobacco tender in April 2017. The new concession, containing the widest selection of Chinese liquor assortment, a whisky chamber bringing an extensive offering under one roof, an in-store VIP lounge and tasting bars, will open in November 2017


Eraman is undergoing a comprehensive brand overhaul focusing identity and image

A successful year 2016 was a year of strong growth for Malaysia Airports (Niaga) Sdn Bhd, which is also known by its ERAMAN Malaysia branding, as the company has expanded and developed its portfolio.


raman operates more than 50 outlets across Malaysia including five international airports, Sultan Ismail Petra Airport and Labuan Airport. In 2016, the duty free company saw an impressive increase in revenue of 10% growth against the previous year. The biggest contribution came at Kuala Lumpur International Airport (KLIA), klia2, and Kota Kinabalu International Airport. The strong 2016 year-to-date performance followed a challenging 2015 which was affected by the dip in tourists from China; the global economic crisis and the weakening of the Ringgit; and a goods and services tax that affected general market sentiment and resulted in slower growth. However, as Zulhikam Ahmad, General Manager, Malaysia Airports Niaga comments, there were also positives. “During 2016 we saw a major reconfiguration of our space that has delivered a

Ahmad Zulhikam, General Manager, Malaysia Airports



more sustainable business at the airports serving Kuala Lumpur through ‘operational streamlining of activities’ enhancing EBITDA as a result”. The company attributes this success to the implementation of various quick wins strategies and initiatives. During the year Eraman launched sales promotion and collaborations with its strategic business partners, tactical campaigns and aggressive marketing activities, price revision, and more. The strengthening of other foreign currencies as against the Ringgit also added to the price competitiveness of its merchandise. One of the major promotions launched in 2016 was Eraman’s Shopping Extravaganza Campaign. This year-long promotion began in March and is being presented in three phases: Shop & Style, Shop & Win and Shop & Drive. The objective of the campaign was to reach out and connect with its travellers everywhere, while at the same time reward loyal customers. In each phase shoppers only need to spend a minimum of MYR250 (US$60.45) at Eraman in a single or cumulative receipts to be in the running to take home attractive weekly prizes and a grand prize of a car. The final phase of the campaign, Shop & Drive, ran in January and February 2017. This campaign was also designed to increase the brand awareness of Eraman and the location of its outlets, as well as tap into the pool of travellers patronising the airports. It contributed an incremental revenue of MYR27 million (US$6,130,094.00) a double digit growth

compared the same period of the previous year. Collaboration with strong business partner such as Pernod Ricard and FNA Marketing Malaysia has helped the successful of this campaign. The Shopping Extravaganza Campaign will start again in June 2017. In 2016, Eraman worked closely with leading partners and hopes to collaborate even closer with the top travel retail brands for 207. The company will work very closely with its parent company, Malaysia Airports Holdings Berhad (MAHB) to create more excitement in the airport, to offer a bigger and better prizes and to create a joyful experience for the customers. The winner will be able to win a BMW 318i car for each cycle and the campaigns will be held in three phases: June to July 2017; November to December 2017; and April to May 2018 The company also recently launched ‘EXpress’, the newly renovated and rebranded store in KLIA. Formerly known as Airport Shoppe, the store delivers a modern concept of a convenience store designed to meet the varied tastes of diverse customers at the airport. The upgrading of this store involved two major sections, the convenience store retail section and the new deli section, the latter offering light meals and drinks for on the go customers. Promotions supporting the launch and daily deals are offered on a regular basis, for example ‘EXpress’ is the only store airport-wide to offer a bottle of mineral water at RM1. To enhance value as part of the cus-


tomers’ shopping experience, Eraman has embarked on a strategic marketing campaign with a leading bank in Malaysia to reach out to its premium card regional database of about two million members within Malaysia, Indonesia, Singapore and Thailand. This will offer a preferential incentive to generate greater sales revenue. Eraman is also working together with an Express Rail Link company that joins the city to KLIA and klia2 on a joint marketing campaign. Frequent commuters and passengers can present their tickets to receive a discount voucher when they spend any amount at Eraman outlets and vice versa. Apart from this, Eraman is collaborating with Union Pay International (during the second quarter on a further campaign which will see more market spend from China at Eraman outlets. Along with this promotion, Eraman has also started a strategic marketing campaign with hospitality and travel players such as Sama-Sama Hotel, Super Strap, Homeytouch, Malindo Airline and Valet Parking. With these collaborations, all Eraman Privilege card members will be rewarded with an exclusive discount structure for their purchases made or service used at our partners’ retail outlet. Currently Eraman has more than 20,000 card members. Eraman has launched Express at KLIA which delivers a modern concept of a convenience store

Eraman’s highly successful Shopping Extravaganza Campaign will launch again in June 2017



2016 saw further developments at KLIA. In October, Malaysia Airports Niaga under its brand flagship, Eraman, unveiled its latest Bally Boutique store at KLIA, showcasing Bally Men’s and Women’s Autumn Winter 2016 collections. The Eraman-operated Bally boutique spans 963 square feet and offers a variety of men’s and women’s products such as bags, shoes, accessories and belts within a modern shopping environment Looking forward, the sales trend for the early quarter of the 2017 is already encouraging and pretty strong especially in March where the company recorded the second highest monthly sales for the past three years, with perfume and cosmetics and chocolates leading the way. The momentum from sales achieved during the preceding year-end Christmas festive period helped to sustain the momentum during the Chinese New Year celebrations. Customers demand for liquor and cigarettes merchandise remain strong but price sensitive. Eraman will focus on liquor and tobacco, alongside confectionery and beauty that remains the central plank of the strategy. The company will continue to strengthen the core business through strategic marketing programmes and collaboration with partners. Eraman is constantly monitoring our product

range to ensure it is competitive against other duty free operators across Malaysian airports. Currently Eraman is focused on both consolidation and expansion. Most immediately, outlets at KLIA Contact Pier, Absolute Bar will undergo renovation and transformation of both external and internal store presentation from liquor bar to cigar and cigarettes contemporary store to generate even greater customer footfall. Eraman is also looking to develop the impact and consistency of its retail presence across the multiple locations and offerings at all airports in Malaysia. This includes looking at strengthening its brand presence through the introduction of a distinctive corporate identity with clear brand positioning throughout all platforms from website to shop façade. A total retail transformation from façade to the overall in-store ambiance will be implemented and new outlets will incorporate key elements of ‘fresh, exciting and welcoming’ stores to boost customer experience. The current stores located at the airside will undergo a total metamorphosis between now and the end of 2018. This refurbishment will foresee a significant impact on our penetration growth that serves Malaysian and international visitors delivering a new duty free retail experience. Zulhikam comments: “Strengthening our brand for both local and international markets has always been a priority to us. Therefore, our advertising campaigns are tailor-made to suit our corporate needs as well as our target markets. For this year, we are moving more aggressively in the area of social media marketing via our own Facebook, Instagram and Twitter pages which are effective platforms to immediately share our events and promotions with our brand loyalists, fans and followers.” The company is working with a branding agency on a comprehensive brand overhaul focusing brand identity and image, its root strengths, current target consumer base, the competitive environment, the value propositions as well as the essence of its brand in travel retail industry regionally. This will set the platform for the next phase which is fundamental to the whole exercise of brand refresh. This project is in the pipeline and Eraman aims to launch the new updated brand in December 2017.

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Airport travel retail opportunities abound

2017 is a major year for airport tenders in Asia, with several big contracts up for grabs. The competition for airport retail space has never been stronger for the major travel retail companies by REBECCA BYRNE As the Perfume & Cosmetics and Fashion Accessories concessionaire at HKIA, Shilla will offer a one-stop shopping destination for beauty and fashion accessories


n China, Hong Kong International Airport, Beijing Airport and Shanghai Hongqiua International Airport are all looking to upgrade the offering to travellers coming through their terminals. Hong Kong International Airport (HKIA) awarded its bids on two core category tenders in April 2017 for a restructured offering. When asked why the change in the structure of the concessions, a spokesperson for the Airport Authority Hong Kong commented: “Over the past years, the Authority has been conducting intensive consumer research to understand passenger needs in HKIA. Consumer insights indicated that larger stores with cross-over and yet related products will provide one–stop shopping with variety and convenience. The Liquor and Tobacco concession now contains gourmet foods whereas fashion accessories such as sunglasses, fashion watches, small leather goods, handbags etc. have been added to the Perfumes & Cosmetics concession. Confectionery will be offered as a separate single concession at a later date.” The current tender includes eight Liquor & Tobacco stores totaling 3,400 square meters, and six Perfume & Cosmetics and fashion accessories stores totaling 3,300 square meters. A CDF/Lagardère partnership was awarded the Liquor & Tobacco concession, and will be introducing new experiential concepts, including the widest selection of Chinese liquor assortment, a whisky chamber, an in-store VIP lounge, tasting bars and more. Shilla who will run the Perfume & Cosmetics and Fashion

Accessories concession will bring a wide spectrum of beauty products and fashion accessories, introducing almost 100 brands that are new to HKIA, a dedicated zone for male-specific products, as well as a “New Generation” zone providing a platform for emerging Korean and Japanese brands. China’s biggest and second busiest airport, Beijing Capital International Airport has issued a dual tender notice covering its duty free retailing concessions at Terminals 2 and 3. Sunrise Duty Free currently runs these businesses on a temporary license extension after its original 10-year duty free concession expired at the end of 2015. Bidding for the Terminal 2 covers the international terminal’s departure area of 3,186 square meters and arrivals zone of 417 square meters. Terminal 3 covers an outbound international space of 9,461 square meters and arrivals space of 1,939 square meters. The categories include perfume & cosmetics, tobacco & liquor, confectionery, fashion and accessories, watches, jewelry and other items. Sunrise Duty Free is mounting a defense of its T3 business, with leading Chinese travel retailers including China Duty Free Group and China National Service Corporation for Chinese Personnel Working Abroad (CNSC) also entering the fray for T2. Shanghai Hongqiao International Airport will offer an upgraded retail offer in Terminal 2 through a series of tenders this year. This terminal handled 33m passengers in 2016, an increase of around 4% over 2015. All major concessions will be

Shilla will introduce a “New Generation” zone providing a platform for emerging Korean and Japanese brands at HKIA

listed in the tenders including luxury brands, premium fashion, packaged food, books and F&B. The entire process is expected to take two to three years to complete. The current operators for retail concession are Dufry and Huai Hai. This year, luxury brands and F&B tenders have been launched in Q1 with other key tenders for premium fashion, package food and books to follow in Q2. For some of the tenders, brands will have the option to tender direct or appoint an operator to represent them. In addition the central luxury brand boulevard will be enhanced by the addition of three new boutiques this year. This tender is expected to launch in Q3 this year. Irene Chan, General Manager Retail at Shanghai Hong Kong Airport Management, commented: “It is our commitment to excel on the provision of a fabulous and unique shopping experience to our passengers. Through the upcoming tenders, we aim to refine and upgrade our retail and dining mix at our terminals, offering a wider range of international and local retail and dining

selections to our passengers and introducing new excitement to our terminals.” Also at the airport a new Terminal 1 building opened in March to replace the current T1 with an expanded 2000 square meters of retail area. Sunrise Duty Free will operate the departure and arrivals duty free in this terminal. Passenger numbers for both terminals is expected to reach more than 40 million in 2017. In South Korea, tenders for Terminal 2 at Incheon Airport are underway. The airport registered annual duty free sales of US$2bn in 2016 up 14.7% year on year, making it the biggest single duty free airport market in the world. This is the second time that annual sales have reached this figure, the first being in 2014. During 2016 Cosmetics & Perfumes continued to be the best selling category with US$770m, accounting for 39% of total annual sales. Liquor & Tobacco followed with US$440m while leather goods registered sales of US$280m. The airport’s stated objective is to maintain duty free sales at over $2bn. The Terminal 2 tenders offer a total of 10,208 square meters to be run by three large duty free retailers and three small and medium-sized companies. Commenting on the terminal, Kim Bum Ho, IIAC Deputy Executive Director Commercial Marketing Group, said: “Terminal 2 is totally new space and environment with centralized duty free shops for efficiency and better visibility. It is our new challenge to leap further and thus, I’d like to invite partners (operators) who can make it with us.” He added that with main carriers such as Korean Air moving to T2, the market is stable and demand is guaranteed. Furthermore compared to downtown duty-free shops in Korea, Incheon Airport duty-free is much more established with a balanced sales proportion between Korean and foreigners. He does not believe that the current political situation between Korea and China will last long and that Incheon Airport will perform well in spite of this challenge just like in 2015 with MERS. Bids closed in April. Four retailers tabled bids for the Perfume & Cosmetics and Liquor & Tobacco concessions: Lotte Duty Free, The Shilla Duty Free, Shinsegae Duty Free and Hanwha Galleria Duty Free. The main fashion and miscellaneous goods concession was retendered after no bidder came forward. The airport has said that this concession may go to a single bidder if there are no competing bids a second time around. And in Singapore, there are major opportunities to be had at Changi Airport’s new terminal 4 (T4). Set to open in the second half of 2017, 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. In a Changi first, passengers will have a unique walk-through experience shopping for Liquor & Tobacco and Cosmetics & Perfumes. 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. It is expected that the successful retailers for T4 will be announced in May. MIUMIU.COM

In winning the Hong Kong International Airport tender for Liquor and Tobacco, the China Duty Free/Lagardère partnership will introduce experiential concepts including a VIP lounge


A Chinese brochure is presented to passengers on arrival and contains articles at Schiphol Airport from Chinese

Capturing the Chinese tourist The middle class in China has seen a dramatic boom over recent years with predictions that it will number 800 million in 2025. The rate of increase in travel is exponential among this demographic and travel retail operators are increasingly looking at new ways of capturing the Chinese consumer by



he Chinese middle class is made up of urban, educated white collar workers with discretionary income, 90% of who own their own home. They have an incredible spending power. On singles day in 2016, Alibaba the e-commerce platform recorded a record US$17.8 billion of sales in one day. Millenials will be the major driving force in consumption over the next ten years. Typically only children from the one child policy, they are free spenders, mobile shoppers and importantly, they like to be entertained while they shop. Having only experienced the good times, they are used to being the center of attention, spoilt by both parents and grandparents. They have grown up with no siblings, therefore their social life is online, as is shopping with 82% using m-commerce to make their purchases. Two operators looking to exploit this booming market are: the Luxottica Group, designer, manufacturer and distribution of fashion, luxury and sports eyewear, which is growing its opera-

tions in China; and Schiphol Amsterdam Airport, which caters for Chinese tourists overseas. The travel retail division of Luxottica Group has expanded rapidly over the past decade, establishing a strong presence in Asia serviced by a dedicated team based in Singapore. Francis Gros, Head of Global Channels, has been responsible for this expansion and talks about the complexity of the Chinese markets and the myriad of approaches necessary to be successful. He talks about ‘Chinamplification’, referring to the enhanced scale of the growth of Chinese consumer and the potential of the China market in eyewear. As an example he compares China to the USA where there are 247 million adult consumers buying 104 million sunglasses per year, a penetration of 42%. In China 37 million sunglasses are sold to a market of 1.4 billion adult customers, a penetration of only 3%. Even more encouragingly the average unit retail on sunglasses in China is already higher than the USA. The Chinese travel retail market for eyewear with its 20% growth in 2016, outperformed domestic growth by almost threefold, albeit from a much smaller base. Gros comments on the potential of the market. “We are still in the process of recruiting consumers, educating them and developing a passion for our brands.”


Celebrity endorsement which is important to this market

To build Luxottica’s business and increase category penetration in China, the company is looking at five pillars of growth. Firstly, experiential eventing, using iconic brands such as Ray-Ban. Gros says: “Last year we completed an acceleration campaign targeting Chinese consumers in the top 15 first and second tier cities which was our largest investment in eyewear brand building in China. We held 100 experiential atrium events in leading shopping malls; we created brand experiences for millennials; and we invested in outdoor media reaching an estimated half a billion consumers.” Hand in hand with this is brand retailing. Using the experience garnered from the opening of 48 Ray-Ban shops in China in areas such as Guangzhou, Luxottica is looking to apply the same principles to travel retail. The third pillar is celebrity endorsement which is hugely important in this market. Famous media stars such as Cecilia Yu, mainland China’s highest paid TV actress endorsed Luxottica’s products, creating awareness. The fourth pillar is a dedicated sunglasses design. The Asian physique requires a different frame size and curvature. Gros adds that Luxottica now designs models solely from the Asian consumer perspective, rather than adapting from Western shapes. The final pillar, which is also used outside of china, is multiformating of the sunglasses category. Gros comments: “Inside our duty free store are generic areas; standalone specialized concepts; luxury and premium brand boutiques which are very important in China; and experiential pop-ups which we have

Luxottica created brand experiences for millennials

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Promotional items such as these houses ensure a sense of place so that tourists know they are in the Netherlands

Promotions with partners such as Union Pay has led to tremendous growth in sales

in the domestic market; plus high-profile promotions which we have in other airports”. Luxottica has recently opened Sunglass Hut standalone stores with partner Lagardère Travel Retail in duty paid airside stores at Xian and Kunming in China. First indications are very encouraging as the average unit retail price achieved is similar to that of the Sunglass Hut store at Hong Kong International Airport. Luxottica and its fellow category suppliers are seeking to increase the size of the global travel retail market in eyewear to 4% of the total travel retail sales by 2020, which is a step up from the 2.7% today. To do this will require more experiential and avant garde initiatives in airports in China and beyond to cater to the next generation of travelers. Chinese customers to Schiphol airport make up 35% of total passengers from Asia, easily the largest percentage, with seven Chinese airports flying direct into Schiphol including Beijing, Guangzhou and Xiamen. Plans to launch an app on popular e-commerce platforms in China are aimed at capturing more passenger spend. Schiphol Airport recognized the importance of the Chinese market as early as 2007. At the beginning, tailored marketing consisted of vouchers in Chinese and a little used app hosted on a European platform. Over time the marketing effort has evolved from just selling items to people from China to putting in effort

into getting to know Chinese consumers, 60% of who are transfer passengers. “Looking at 2017 we are continuing to improve our effectiveness but I still believe that we have a long way to go to unblock the full potential of the Chinese customer,” says Anne-Marie Zuidweg, Amsterdam Airport Schiphol Head of Commercial Services and Media. The airport is investing in getting in touch with consumers using digital tools to incentivize them and targeting the distribution of marketing messages. A Chinese brochure has evolved from a leaflet and now contains articles from Chinese influencers and special inserts during Chinese national days. Promotions with partners such as Union Pay have led to tremendous growth in sales and will be extended. Wi-Fi was optimized by the end of March so that when Chinese passengers land at Schiphol their browsing is rerouted to a Chinese web environment. The new app will be ready at the end of June and launched on Weibo and WeChat. Zuidweg adds that the airport is investing in more brand promotions, partnerships and ‘newness’ in terminals. It has introduced luxury brands to cater for Chinese passengers whilst at the same time offering a sense of place with emphasis on local products and flavors so passengers, in particular the ones transferring, know that they are in the Netherlands. Luxottica held 100 experiential atrium events in leading shopping malls in China

Using the experience garnered from the opening of 48 RayBan shops in China in areas such as Guangzhou, Luxottica is looking to apply the same principles to travel retail












Jaya Singh, President of APTRA

Airports only forum takes off by

A new initiative pioneered by Asia Pacific Travel Retail Association (APTRA) is set to change the way airports view data and manage best practice by enabling better communication and information sharing within this industry 46




PTRA is to step up its service to airports in the Asia Pacific region by launching a series of Airport Forums and a dedicated online Resource Centre. The first will be hosted by Changi Airport Group, in May 2017 to co-incide with the TFWA conference in Singapore. The Resource Centre will be an airport access-only section of the APTRA website

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that contains brand and retailer data, marketing activities, retail executions and research reports which will help landlords to benchmark and improve the way they operate travel retail in their airport. Jaya Singh, President of APTRA, comments that the initial response to the first forum has been promising. He adds that the first meeting will be an opportunity to brainstorm the services and the benefits that airports would like to see from APTRA and to share some of the concerns faced by the industry. APTRA has conducted its own research with m1nd-set and will provide some airport specific research at the Forum. Participating airports will also be able to share their insights. The first meeting will include an introduction by ‘honorary ambassador’ Andrew Gardiner of Melbourne Airport who is an APTRA board member. This will be followed by an open discussion on what airports wish to get out of APTRA and these airport peer forums. There will

be an update on issues affecting airport commercial revenues and how APTRA is addressing these issues. Singh says: “We value enormously the input of these ‘honorary ambassadors’ when we are preparing a defense of our industry, as their testimony is authoritative and highly respected by the regulatory authorities”. He adds that airports are key to APTRA’s advocacy work given their status for the most part as government owned companies. Airport senior management is in close contact with the aviation and tourism ministries and customs authorities and is pivotal to the trade association in getting the industry’s voice heard. The meetings will be held during existing industry events, so at least twice a year, during the main TFWA events, and by conference calls in the interim if there is demand. It will be funded through APTRA via membership fees and supported by members hosting the seminars, like Changi Airport, and others such as

DFS and Edrington, who are sponsoring the post meeting drinks. Andrew Gardiner, Chief of Retail & Launceston Airport, Melbourne Airport, comments: “Each airport faces different challenges, however, continuing to improve the customer experience in an environment of increased security risks is a challenge we all face.” He adds that the concept “best practice” is wide-ranging and subjective. Airports, historically, have not shared data or statistics, and therefore best practice is not measured, except through the eyes of the observer. This forum undertakes to address this through airports agreeing to the opportunity to share information. Gardiner concludes that going forward: “The forum offers airports in the Asia Pacific region the opportunity to share ideas pertaining to their commercial business and set the agenda with regards to fact finding and data sharing into the future.”

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Bhatia Traders’

expanding horizons Having built a solid network across the UAE, Bhatia Traders is catering to demand by adding hi-tech gadgets to its offering while eyeing opportunities to grow its duty free business within the wider GCC by


Typically, Bhatia Traders’ seamen’s’ clubs offer multicuisine dining, live entertainment, complimentary Wi-Fi, pool tables, table football and outdoor space

Rajeev Bhatia, Managing Director, Bhatia Traders


ith eight seamen’s clubs, 10 duty free shops and multiple bonded warehouses at seaports across the UAE, Sharjah-headquartered Bhatia Traders is taking a strategic approach to building its business. Since its inception in 1969, the company has grown to become present in almost all the major seaports of the UAE, with the exception of Dubai, yet it is currently focusing on strengthening its internal operations with a view to future expansion.



“We are in discussions with players in the industry for joint ventures and acquisitions,” revealed Managing Director Rajeev Bhatia. “We are also in conversation with the port authorities to provide additional services, such as cafés and restaurants, to port employees and visiting seamen.” Further to this, the company is seeking to grow outside the emirates in the near future. “We see ourselves expanding into territories outside the UAE,” said Bhatia. “Our seaport facilities are firmly in place with a continuous improvement process, which gives us time to expand into seaport opportunities within the wider GCC and seize any other duty free retail opportunities.”

Prime position A significant development for the company was the opening of a 500-squaremeter duty free shop and seamen’s club at Mina Zayed, Abu Dhabi’s oldest commercial port, just before Ramadan in 2016. Just like the company’s existing locations, it offers multi-cuisine dining, entertainment in the form of a live band, complimentary Wi-Fi, two pool tables, table football and an outdoor patio set-up for live barbecue stations during the winter.

The associated duty free shop also follows the existing format, offering more than 5,000 products from various categories. “This has been our most strategic step so far,” said Bhatia. “Mina Zayed is a busy port and it has added good revenue to our existing business. There are plans from the port authorities to further enhance the port, which will bring an added advantage to our services.” The developing shipping industry in the UAE, which is attracting liners from across the globe, has prompted Bhatia Traders to refine the offer to appeal to a broad range of nationalities. Today, the company caters to US Navy, French Navy, Indian and Sri Lankan and Turkish ships as well as customers from China, the Philippines, Korea and Vietnam. “We cater to large demographics, as all ports serve multiple vessels,” explained Bhatia. “Although all our locations follow similar planograms, we do offer some specialities depending on the mix of nationalities. For example, at our Abu Dhabi and Fujairah ports we cater to members of the US Navy, for whom we have introduced special cigars from Dominican Republic. In Ras Al Khaimah, we cater to a large Chinese crew, for whom we have introduced Chinese cigarettes and wine.”


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Special cigars have been introduced for members of the US Navy

Gifts packs of fragrances continue to be popular

Go gadget, go So far this year, the company has witnessed significant growth in all its major categories of liquor, tobacco, fragrances, electronics and confectionery. “We are continuously improving all these departments and are in talks with various suppliers to enhance the product line,” said Bhatia. “We expect to experience a promising Q2 due to the earlier dates projected for Ramadan, as well as the start of summer holidays.” Bolstering its electronics category is helping to keep the offer current. “In addition to our top product lines in liquor, tobacco, confectionery and fragrances, we are focusing on ‘big boy toys’ such as drones, Fitbit and other radio controlled devices, which are a big hit among seamen,” said Bhatia. “Shoppers have become more tech savvy and are inclined towards the latest gadgets. That said, they do continue to shop for gifts packs of fragrances and confectionery.” With an e-commerce portal and a new corporate video in the making, we can expect Bhatia Traders to continue to make waves in the region. Bhatia Traders’ duty free outlets, bonded warehouses and seamen’s clubs are located in Sharjah, Jebel Ali, Umm Al Quwain, Fujairah, Khorfakkan, Ras Al Khaimah, Ajman, Abu Dhabi and Hamriyah Free Zone. To find out more, visit



Shoppers are increasingly tech savvy, prompting Bhatia Traders to introduce a number of ‘big boy toys’ such as drones, Fitbit and other radio controlled devices to the mix

Bhatia Traders is present in almost all the major seaports of the UAE

E L B A L A RESE CH POU Please visit us at TFWA APE&C at our booth Basement 2/C28!


Chinese tourists home and

away by


With the middle class in China on the dramatic rise, a new breed of traveler is emerging. What does this mean for tourism on both the domestic and international front?

Dr. Dai Bin says that the typical Chinese tourist is no longer a ‘crazy shopper’ but more discerning




hina’s tourism can be seen in the ‘three tens’ according to Dr Dai Bin, President of the China Tourism Academy. It contributes over 10% to the Chinese economy, more than 10% to employment and over 10% to the world tourism. In 2016 domestic tourism reached 4.44 billion people, an increase of 11%, and inbound and outbound tourism reached 260 million. International tourism revenue increased 5.6% in 2016 reaching US$120 billion with a per capita spend of the 122 million Chinese outbound tourists of US$4,900. Although outbound tourists only take up 3% of the total number of Chinese tourists, they take up 16% of total tourism spending. China’s Premier, Li Keqiang, has talked of plans to make tourism a major part of structural reform and in 2016, tourism was made a key pillar of China’s 13th five year plan. Investment in the industry has been enhanced, regional based tourism was put high on the agenda and the China National Tourism Authority is advocating ‘tourism plus’, through improving policy and business environment for tourism investment, and integrated development to an unprecedented degree. Tourism is now a


frequent topic for Chinese state leaders on bilateral and multilateral platforms, especially the global role and influence of growing number of outbound Chinese tourists. Dai commented that while the Chinese were previously seen as ‘walking money’ overseas, scooping up all manner of items from toilet seat covers to cooking utensils, they are no longer such ‘crazy shoppers’. A new breed of discerning and independent tourist has emerged - one that eschews group travel for more freedom to enjoy the local culture in their own time; one that looks for travel with depth; one that likes to enjoy the experience of the birthplace of a brand, for example they will shop for Burberry products in the UK. Research indicates that their major shopping motives and decision factors include brands, quality, price country of origin and shopping experience. With tourism a key pillar in China’s five-year plan, the government is looking at initiatives to capture more of the inbound market, in particular foreign tourists, outside of Hong Kong, Macau and Taiwan. Although this sector of the market is still in recovery, it has already hit a record high growth rate since the



2008 international financial crisis. Measures to increase inbound tourism include: 72 hour visa free transit at major hub and port cities; increasing of tax free and tax refundable stores; improving the quality of Chinese goods; and increasing offshore duty free shopping quotas in the Hainan province. Dai pointed out that overseas consumption is under pressure from on-line shopping and the state’s encouragement towards domestic consumption with possible tariff and non-tariff measures. He also made reference to the plethora of factory stores and outlets, department stores and even convenience stores that may be strong competition to tax free outlets. He concluded that whilst consumer demand for brands, quality and a luxury shopping experience remains unchanged, consumers now expect more from their shopping experience. Store layout, accessibility of airports and destinations, payment and logistical facility and changes in increasingly important state-to-state relations all count as influential factors when choosing tourist destinations and making shopping decisions for Chinese shoppers.

Unlocking gifting solutions to drive Confection growth. 44% of America’s airport Confection buyers purchase for a gift.* *CiR Global Shoppe Study, 2016

Arriving at Stand #G29, TFWA Singapore.

Having a greater offering of gifting solutions is considered a key means of driving future purchasing.*


Indian insights A new survey by travel research firm m1ndset on the behavior and motivations of Indian travelers in duty free makes fascinating reading


ravel research specialist m1ndset has unveiled a report on Indian consumers in duty free, indicating that many are price-sensitive and pre-planning shopping lovers. The survey centered on Indian nationals who had visited a duty free shop in the Asia Pacific region in the last three months, and 800 international travelers responded. The questionnaire was in the form of an online survey, which lasted about 15 minutes. The average age of respondents was 41, 81% male and 42% in the millennial demographic group. More than 40% (43%) had an income far above the national average, with 28% slightly above the average and 15% around the average. Some 32% were in senior management, 18% in middle management and 13% were engineers or technology executives. Some 65% were traveling in economy class, 15% in premium economy, 17% in business class and 2% in first class. Turning to the frequency of their duty free shopping, more than 60% (64%) of travelers reported that they shopped in duty free on every trip, with 22% shopping on every second trip, 9% on every third trip, and 4% said they shopped on every fourth trip or less.

Emotional brand image shoppers The survey identified five different segment families. The first group were classed as emotional brand image shoppers, spanning wealthy convenience shoppers, intensive brand image shoppers, inspiration seekers and emotional high



spenders. The second group of rational preplanners consisted of rational stock-up shoppers, conventional deal seekers, and executive pre-planners. The third group were identified as lowincome buyers, consisting of low-budget gift shoppers and those swayed by promoIndian duty free visitors on average purchased 2.3 categories, namely 58% tions. The fourth consumer confectionery, 51% alcohol, 37% perfumes, type included local touch 18% electronics, 14% fashion, 14% cosmetics, 13% souvenirs, 12% tobacco, 5% seekers who purchased accessories and jewelry, and 5% stationery local gifts, time-killing browsers and authentic product seekers. The fifth segment were price-sensitive shopping lovers, including bought their usual products to stock up, bargain-seeking self-indulgers. could also buy their usual products as Nearly 60% (56%) of survey respongifts, were very price-sensitive (they buy dents were classed as price-sensitive shop- only if the product is cheaper), always ping lovers and rational pre-planners. compared with high street prices, mostly One-fifth (20%) were emotional brand pre-planned their purchases, did not seek image shoppers, while 17% were local exclusivity or novelty, often bought prodtouch seekers, and just 7% were lowucts to use during their trip, liked simple income buyers. and informative shops, and didn’t spend m1nd-set’s survey delved into the moti- time in shops. vations of the top two segment groups. Almost one-third (30%) of the Indian Diverse motivations duty free visitors interviewed were pricefor purchasing sensitive shopping lovers who said they Once in-store, the Indian travelers needed cheaper prices, made comparisons surveyed visited on average 3.6 product with high street prices, needed promocategories. The majority (72%) visited the tions, were brand and image sensitive, confectionery section, 62% alcohol, 57% spent a lot of time in shops, liked novelperfumes, 41% electronics, 28% cosmetics, ties, didn’t want local products,and didn’t 25% souvenirs, 24% fashion, 18% accesstock up. sories and jewelry, 15% tobacco, and 11% More than a quarter of respondents stationery. The conversion rate (buyers (26%) were rational pre-planners who out of visitors) was 51% on average. The

8-11 May 2017 TFWA Asia Pacific Singapore Visit our stand Basement 2 Stand G1, Marina Bay Sands Hotel Contact us for an appointment: O: +44 (0)208 581 3611 M:+44 (0)7785 244934

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rates were 72% in the alcohol category, 70% in confectionery, 69% in tobacco, 57% in perfumes, 50% in fashion, 46% in souvenirs, 45% in cosmetics, 42% in stationery, 38% in electronics, and 24% in accessories and jewelry. Indian duty free visitors on average purchased 2.3 categories, namely 58% confectionery, 51% alcohol, 37% perfumes, 18% electronics, 14% fashion, 14% cosmetics, 13% souvenirs, 12% tobacco, 5% accessories and jewelry, and 5% stationery. As for share of wallet, alcohol achieved 24%, electronics 20%, perfumes 17%, fashion 13%, confectionery 10%, accessories and jewelry 7%, cosmetics 6%, tobacco 2%, and souvenirs 1%. Indian shoppers cited diverse motivations for buying duty free products. The majority (51%) said it was convenient to buy in duty free, 32% said the price was lower versus local stores, 27% said it was their favorite product, 25% said the price was lower than in other duty free shops, 24% were swayed by an appealing promotion, 23% said someone else asked them to purchase the item, 21% said the display caught their attention, and 20% said the product could not be bought at home. The survey found that alcohol, tobacco and souvenirs were the most planned purchases, with tobacco, perfume and fashion

Peter Mohn, CEO, m1nd-set



the most impulse purchases. Of all categories, 56% of purchases were planned and the remainder were on impulse. Indian travelers are keen on making price comparisons. By category, 64% compared prices in the tobacco department, 64% in electronics, 61% in alcohol, 58% in cosmetics, 55% in perfumes, 46% in souvenirs, 40% in fashion, and 36% in confectionery. Overall, half of all respondents compared prices, with 27% comparing them with local stores, 18% other duty free shops, and 6% making online comparisons.

Once in-store, the Indian travelers surveyed visited on average 3.6 product categories

Influence of sales staff and promotions Sales staff have a big part to play in the purchasing process, the survey found. Some 31% of Indian travelers were strongly influenced by sales staff, i.e. they bought something different than planned or would not have bought anything, while 43% said the sales personnel had no influence over their purchase. Some 57% of Indian travelers were strongly influenced by sales staff in the fashion department, while 46% were

strong influenced in the cosmetics category, 35% in confectionery, 29% in electronics, 24% in perfumes, and 20% in alcohol. More than half of the Indian travelers polled said they were influenced by promotions. The most popular promotions were in the fashion section, followed by cosmetics, fragrances, alcohol and confectionery. Why didn’t some Indian travelers buy in duty free? Most people said they were just browsing and had no intention of buying anything, some did not want to carry their purchases, while others were not attracted by the products, prices or promotions. When asked about what would spur them to buy in duty free, the top motivator was a higher number of duty free exclusive products, followed by better promotions and sales, more uncommon products, more products suitable for gifting and more samplings/tastings. Only one-third (27%) of respondents thought duty free offered excellent value for money, with only 7% citing poor or very poor value. In terms of categories, alcohol, tobacco and fragrances were perceived as giving good value for money. m1nd-set’s report also considered the online usage of duty free services. Almost a quarter (23%) of respondents checked on a duty free website what products or brands were available before their trip, while 12% checked on a duty free smartphone app what products or brands were available before their trip. Fewer than 10% (6%) pre-ordered their duty free products online. Interestingly, 67% of Indian duty free visitors had never used any of these services.




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Enjoy Johnnie Walker responsibly.

EMBARK ON A JOURNEY OF FLAVOUR EXPLORATION WITH A DRINK FILLED WITH DISCOVERY Kentucky in the 1990s, Johnnie Walker Blenders’ Batch Bourbon Cask & Rye Finish pushes the boundaries of blending like never before. It took more than 50 experiments exploring over 200 whisky samples to hit upon the blend, which features whiskies from just five distilleries including Dufftown and the now closed Port Dundas. The final blend, which is sweet, intensely honeyed and fruity with warming vanilla spiciness, is aged in first-fill bourbon casks and finished for up to six months in former rye casks.

If you are looking to embark on a journey of flavour exploration with a drink filled with discovery, authenticity and craftsmanship, then Johnnie Walker Blenders’ Batch Bourbon Cask & Rye Finish is for you. Enjoy neat or serve long as a cocktail – why not try the delicious Johnnie Walker Bourbon Cask & Rye Finish Manhattan, a new twist on the classic American rye whisky cocktail, inspired by New York. You can pick up a bottle of Johnnie Walker Blenders’ Batch Bourbon Cask & Rye Finish in selected duty free stores worldwide from January 2017.


Louis Vuitton launches at Changi

Changi Airport’s Terminal 3 Shopping Streets

Fashion house Louis Vuitton will open a duplex store in Changi Airport Terminal 3 in January 2018


he two-storey boutique will taking center stage in the airport’s latest themed garden – the ‘Crystal Garden’. Covering 530 square meters, this is the first airport store in Asia Pacific to be directly



managed by Louis Vuitton, with a strong, tailored product mix that will best fit travellers’ unique preferences. Lee Seow Hiang, CEO of Changi Airport Group, says: “We are thrilled to partner Louis Vuitton, with its rich travel heritage, who shares our vision to redefine the future of luxury retail in an airport. The revolutionary duplex store, set amidst an elegant Crystal Garden, will become a distinctive attraction for passengers who fly through Changi Airport, and we

look forward to embarking on an exciting journey of discovery with them when the store opens.” Since its opening in 1981, Changi Airport has pioneered the concept of airport gardens. This is the first time Changi will integrate a feature garden with a retail store. Michael Burke, Chairman and CEO of Louis Vuitton, adds: “Louis Vuitton awaits the perfect moment and chooses the perfect place to open a new store. Singapore Changi Airport is such an important location for us, and we are happy to offer this new store, not only to our Asian customers but also the international travelers who transit by this airport. Louis Vuitton is a brand intrinsically related to the history of modern travel. Louis Vuitton has refined the Art of Travel since its creation in 1854, constantly developing new innovations. Given the right place and the right timing, it was more than natural for Louis Vuitton to create a space inside Singapore Changi Airport, dedicated to modern travelers.” With over 76,000 square meters of retail floor space, Changi Airport is a destination for shoppers and diners from around the world. Offering a refreshing mix of exciting brands, extensive product ranges, and innovative concepts, Changi Airport achieved retail sales of S$2.3 billion in 2016.


Enjoy Johnnie Walker responsibly.


A superlative selection This season’s most-wanted delights in the travel retail universe 5

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1. Whitley Neill London Dry Gin: This award-winning premium gin (43%abv) contains nine botanicals, including aromatic African Cape gooseberries and the citrus fruit of the baobab tree 2. Cross Peerless TrackR: Losing your pen is a thing of the past with a state-of-the-art app that uses Bluetooth and Crowd Locate technology to keep people in touch with their writing tools while on the move 3. Daniel Wellington Classic Petite: This new 32mm watch offers a minimalist and contemporary look, imbued with attitude. Made from stainless steel, Classic Petite is available in rose gold and silver and with a black or white dial



4. Molton Brown Exquisite Vanilla and Violet Flower single wick candle: These candles exude a powdery violet and freesia fragrance, bringing you relaxing ingredients sourced from the English countryside 5. Sisley White Ginger Contouring Oil for legs: The oils in this toning product provide effective relief for legs that feel heavy. White ginger extract and ginkgo biloba target swollen tissues to provide a feeling of lighter legs 6. Vermouth Bianco Bottega: Pale, with light yellow hints, this unique recipe includes elderberry, wormwood, Ceylon cinnamon, nutmeg, greater galangal, bitter orange peel in a Pinot Grigio Doc Venezia white wine base

10 9


8 7

12 13 10. Delaire Graff Estate Cabernet Sauvignon Reserve: This award-winning wine portfolio comprises structured classic reds like the flagship Bordeaux blend, Cabernet Sauvignon Reserve (pictured) and superlative Laurence Graff Reserve

7. Leonidas Dora Spring/Summer Collection: These gift boxes in bright spring colors contain an assortment of either 22 Centenaires in milk and dark chocolate or 26 pieces from the traditional Leonidas range in milk, dark and white 8. Haribo Tropifrutti Pouch (750g): This travel-exclusive pouch is brimming with a tropical assortment of toucans, palm trees, passion flowers, bananas, and pineapple-shaped jellies in flavors such as passion fruit, banana, and melon 9. Clogau Feathers Collection locket: Ornate feathers were worn by Celtic druids. This exquisite silver and rose gold collection contains rare Welsh gold – the Gold of Royalty for over 100 years

11. Go Travel Power Bank 4000: This power bank keeps mobile phones and tablets working on the move with 4,000mAh power output and fast charging times, fully charging a standard smartphone in just 1.5 hours 12. Oakley Sliver sunglasses: This sleek, effortless street style has a stress-resistant O Matter frame that offers zero pressure, and three-point fit for comfort. The lens offers premium optical clarity with polarization and Iridium coatings 13. Dsquared2 He Wood Cologne: This masculine Cologne ushers ancient rituals into our fast-paced world. The fragrance brings a strong and vibrant element of wood to the eau de Cologne family for the younger generation ASIA DUTY FREE & TRAVEL RETAILING



Celebrating nine decades of success

“Bubble of time” concept celebrates Furla’s 90th anniversary

Italian accessories brand Furla has plenty to shout about this year as it marks 90 years in business with a variety of novelties


urla is celebrating its 90th anniversary with a new “Bubble of Time” concept that sees handbag styles and shapes corresponding to the nine decades since it was established in 1927. In addition, nine new models have been introduced, one for each decade. Each decade interprets the Furla woman and embodies the important elements of each era. A new clutch offer, Snap, represents a modern interpretation of the 1920s sophisticated woman, featuring a tortoise pattern resin on the closure system. For the 1930s independent woman, the Like line has a new top handle that becomes a double-handled tote by putting the flap inside the bag. The aviator girl of the 1940s is marked by Scoop, a military-inspired reversible flap shoulder bag with a snaphook closure.

Playful style in soft eco fur The strong 1950s biker woman is celebrated with the Blogger bowling bag, which has a sporty, sophisticated feeling, incorporating interchangeable sides. The 1960s college girl look is embraced by the Selfie frame bag with a squared geometrical design, while the free woman of the 1970s has the young and playful Caos style in soft eco fur with a lightweight construction. The rebel 1980s woman will carry the Hashtag saddle bag, renewed by a statement buckle on the front, and the sporty 1990s woman has the Meme soft leather handbags, featuring a striped motif on the front. Meanwhile, the tech-loving woman of the 2000s will cherish the robot lucky charm and the Dafne Avatar backpack with butterfly, patch and stud applications. Alongside the Mood concept, the collection also features a new basic Pin tote featuring a square, modern design in soft leather.

Men’s collection makes travel retail debut As it celebrates 90 successful years, Furla is launching its men’s collection in travel retail, starting from Fall/Winter 2017/18.

Furla is launching its men’s collection in travel retail this fall



“I’m very proud of this new chapter for travel retail,” said Global Travel Retail Director Gerry Munday. “Every year the men’s collection gets stronger and more relevant, and every year we are seeing increased demand for men’s products in travel retail.” The Fall/Winter 2017/18 men’s collection draws inspiration from various sources, from sporty to preppy. Three lines are offered – Leisure, Business and Design – with a selection on show at this year’s TFWA Asia Pacific exhibition. The Leisure line’s hallmark Ulisse backpack has clean lines and raw-edged leather handles with creative animal prints from Furla’s fantastic jungle. The backpack stands out for its bands, allowing customers to personalize their bags by inserting a detachable pouch printed with their animals of choice or a variety of other designs. The Atlante briefcase in the Business line is sturdy and geometric, featuring a trademark metallic clasp, which resembles that of the Metropolis, Furla’s signature women’s bag, but snaps open like a classic men’s suitcase. The collection offers a fresh take on two Furla classics in its Design line. The Giove line stands out for its preppy polish, while the Icaro line has been revitalized with acid-bright colors associated with skater culture. Textiles complement the leather goods, including a special “Man Camou-Jungle” capsule of animal print bandanas. “This is a huge year for Furla and this collection is a fabulous way to celebrate our 90 years,” concluded Munday.

TFWA 2017



The new Lancôme space is described as a place full of discovery

Beauty concept breaks rules


n partnership with Lotte Duty Free, Lancôme has unveiled a store at the Lotte Hotel in Seoul with the brand’s new look. The new store reflects a fresh visual identity, Lancôme said, offering travelers a Parisian “apartment with a view” infused with an artistic and casual-chic French touch. “As soon as they enter the new Lancôme space, they will be struck by its conviviality,” the French company said. “The brand wants to offer them a unique retail experience and share beauty and happiness with them.” The store is described as an inspirational place full of discovery. It is designed to be a modern, young and dynamic store where women can freely explore the Lancôme experience and discover or re-discover the various product families, including best-sellers such as La vie est belle, Advanced Génifique, and l’Absolu Rouge, as well as the latest launches and travel exclusives. The sharing table in the center of the store will encourage customers to play



Lotte Duty Free and Lancôme partner on new store at Seoul’s Lotte Hotel

with textures and colors guided by the beauty advisors. They will have the opportunity to discover the art of make-up or test tailor-made skincare routines in a joyful atmosphere, the brand said. Jeffrey Davis, Merchandising of Innovation Director, Lotte Duty Free, said: “I am very pleased to have the first new 2020 Lancôme travel retail counter in the world. It is an amazing shop that awakens the senses, from the virtual video walls of cherry blossom petals to the make-up counters that invite customers to explore the world of Lancôme. “This new beauty concept really breaks the rules of retail standards in travel retail

as it is fully consumer-centric, enabling each customer to play with the products. Sales have already improved since opening day and you can see the smiles and joy from customers that love the new look and freedom to navigate in a more playful manner.” “Lotte Hotel’s Lancôme store perfectly reflects the brand’s new design and concept,” the brand said. “Already available in local markets, this concept has been efficiently adapted to the travel retail channel to provide a smooth shopping experience, given travelers’ time constraints.” “The first results are amazing,” Lancôme added.



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The owner of Tateossian is set on replicating the domestic market success of his men’s jewelry brand in travel retail


K-based jewelry supplier Tateossian is known for producing fashion-forward, contemporary and timeless collections. Today, the company’s focus for 2017 in travel retail is achieving more listings on airlines and expanding its retail presence in airports. The brand’s expansion in the channel is already under way, as Tateossian is in negotiations with a number of operators. “A corner at Jakarta Duty Free is our latest addition, followed by Muscat,” says company owner Robert Tateossian. “We are also developing quite a few duty free exclusives for inflight, which shall be released at the TFWA Asia Pacific show in Singapore.” He adds that the company actively looks around the globe for opportunities in travel retail. “We currently have a presence in 71 countries in domestic retail – it would be nice to see that success replicated in travel retail!” he smiles.

Catering to a variety of preferences The brand’s main market is men’s jewelry. Robert Tateossian notes that men in general are homogenous in their buying patterns, but the company has found that it has two distinctive customer profiles:



men aged between 35 and 54 and the 18-34 age group, who tend to have different product preferences. “There are slight taste differences from market to market, for example the demand for more simple, subtle designs come from Asia and Europe, whereas bolder designs are more popular in the Middle East and the US,” he observes. Tateossian is very clear about the brand’s USPs: “The fact that we consistently offer high quality, unique designs that cater to a variety of preferences,” he states. “Also important, however, is that every season we introduce a large number of new styles – keeping our assortment constantly fresh and updated – capturing the latest trends in fashion.” Tateossian keeps its designs up to the minute in a number of ways. “Our designs are a reflection of what is happening artistically around us. We visit various fashion shows in Milan, London, attend art exhibitions, look at architecture, furniture, and observe what is happening in the street in cities from Cape Town to New York,” he says. Thanks to its distinctive design vision, Tateossian sells in over 71 countries around the world, with more than 1,000 points of sale, spanning travel retail locations as well as the most prestigious,

Robert Tateossian, Owner, Tateossian

fashionable boutiques and department stores, including Tsum in Moscow, Harrods in London, Saks in New York and Isetan in Tokyo. Tateossian is gearing up for the TFWA Asia Pacific show in Singapore, where the brand will launch its new travel retail collection that includes new designs and adaptations of some of its core pieces, that have been tailored to the needs and preferences of the sophisticated traveler. Tateossian’s main market is men’s jewelry


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For every pair of Roma Boots purchased, a pair is donated to those in need



looks to step into travel retail Roma Boots sets sights on travel retail market, focusing on Asia and Middle East


oma Boots is aiming to partner with travel retail distributors in a bid to spread its philanthropic message across the channel. The company’s main objective is to target Middle Eastern and North and South American duty free along with the cruise market. Samuel Bistrian, CEO and Founder of Roma Boots, was born in Romania,



but after his family moved to the US, he embarked on a successful career with Neiman Marcus. He never forgot his roots and founded Roma Boots seven years ago. For each pair of boots purchased, a pair is donated to those in need. In the past seven years, boots have been donated in 26 countries with almost 40,000 people in need receiving proper footwear. Roma Boots wants to achieve a goal of giving away 1 million boots by 2020. Boot styles consist of classic to urban styles, in a variety of colors. Popular product collections are the Classic Collection, Chelsea Collection, and Sadie Robertson Collection. The brand has just launched in Canada, and has enjoyed success in the US, including at Nordstrom. Additionally, there are expansion plans for domestic markets in Asia, South America as well as the Middle East. Travel retail is a new channel for the brand, and the company is seeking strategic distribution partners who understand the message of Roma Boots and want to partner in bringing this story to market, in locations where there is a need. In travel retail, the initial plan is to launch with the children’s line. The boot will come with a stuffed Roma mascot,

and for each pair purchased, a child in need will receive a pair of rain boots, and a stuffed animal. One area within travel retail that is being targeted initially is the cruise ship market, along with North and South American airports. The millennial generation is a prime target for the brand, as this demographic feels very strongly about the concept of social responsibility. “We believe that travel retail could be a wonderful fit for this brand,” said Bistrian. “Most who have the luxury of traveling do not know the pains of poverty; it is a way to communicate the reality of world, as well as showcase the product in locations that could potentially serve as a boot drop where boots are donated. Cruise ships, in particular, often dock in Caribbean locations where extreme poverty exists.” He continued: “In the travel retail channel we could work with partners to collaborate on boot drops (or boot give backs) that are directly linked. There are not many socially conscious brands in the travel retail market and we believe the time is right to communicate this message to this market as well.” For more information, contact Beatrice Pitocco, VP Sales/Marketing & International Expansion at



A leading light Already in a leadership position domestically and a power player globally, Loacker is getting set for further travel retail growth with its new innovations by


Loacker is based in South Tyrol, Italy


talian brand Loacker has big ambitions in the travel retail market for its specialty wafer and chocolate products, according to its CEO Ulrich Zuenelli. “The duty free channel is absolutely essential for our global marketing as well as multichannel distribution strategy,” Zuenelli tells Asia Duty Free. “The objective is to make Loacker a strong duty free brand whose position in the duty free channel shall reflect our international market position as a premium brand and quality leader of the wafer, patisserie and chocolate specialties categories.” Loacker, based in South Tyrol, Italy, will be present at the 2017 TFWA Asia Pacific show, where it will introduce items for formal and informal gifting, kids and family gifting, sharing/snacking, and products for self-consumption. The portfolio includes the Gran Pasticceria and Rose Range as well as children’s items containing an assortment of chocolate and wafer specialties. “Furthermore, we are working on par-



ticular innovations, which can be discovered at our booth J29 at the TFWA World Exhibition & Conference in Singapore,” adds Zuenelli.

Market-leading brand in the premium wafer segment Loacker already has a powerful and successful presence on the domestic market. The brand is represented in all five continents with some 877 million product units sold. “We could even go as far as saying that we’re on everyone’s lips,” says Zuenelli, citing the brand’s impressive export figures. More than 70% (73%) of overall tonnage of more than 36,600 tons are sold by the South Tyrolean company to export countries. “This makes us not only a market-leading brand in the premium wafer segment but with an impressive market share of 4.9% [source: Euromonitor wafers with and without chocolate] – even the global market leader for wafers,” he enthuses. Loacker wafer and chocolate specialties are manufactured in the heart of the

Dolomites at 1,000 meters above sea level, in Auna di Sotto, South Tyrol, Italy, and in Heinfels, East Tyrol, Austria. Loacker was founded more than 90 years ago by Alfons Loacker as a little pastry shop in the center of the South Tyrolean town of Bolzano. Since then, the company has become a global player. Even though the

Loacker CEO Ulrich Zuenelli

main market for Loacker continues to be Italy, where the company as a domestic player holds a leadership position, its exports are continuously growing. Loacker products are sold in more than 100 countries worldwide. The Middle and Far East are the main stakeholders in the export business, says Zuenelli. These two regions, when combined, represent a 73% share of turnover with strong growth rates aiming to reach even higher. Europe, North America and Africa follow. Asked about the brand’s consumer demographics, Zuenelli notes that Loacker’s wafer and chocolate specialties are made for the whole family, whether young or old. “Our customers, as consumers of our products, are the company’s focal point. Taking our customers’ wishes and suggestions into account, offering them a unique and light taste sensation, as well as achieving positive market reactions, are regarded as constant challenges by the entire company,” he explains. “Only when our customers trust and appreciate our products can we consider ourselves to have been successful.”

Loacker’s wafer and chocolate specialties are made for the whole family, whether young or old

Fine ingredients from all over the world The most important characteristic of Loacker products is their exceptional quality, says Zuenelli, quoting the company motto: “Take the best – untreated and free of additives.” He continues: “We go about selecting the ingredients with dedication and an unerring eye: finest Italian hazelnuts, freshly roasted by Loacker, real Bourbon vanilla pods, savory aromatic cocoa, the best quality milk and fresh mountain water. We, too, are invariably enticed by the fine ingredients from all over the world. The result: new compositions with crispy wafers and chocolate baked in the family tradition. Loacker products are without colorings, preservatives and hydrogenated fats.” For the company, the main pillars of this quality philosophy are respect for nature and environment, the selection of the finest ingredients and the use of state-of-the-art production and wrapping technologies. “All this makes sure that millions of consumers throughout the world choose Loacker,” says the CEO confidently. ASIA DUTY FREE & TRAVEL RETAILING



Perfetti Van Melle sweetens its sugar strategy in Singapore

Hello Kitty four piece (1.45oz/41g) boxes of milk chocolate covered macadamias

New sweets and gum join Perfetti Van Melle’s broad portfolio of sugar confectionery at this year’s TFWA Asia Pacific exhibition in Singapore (Stand: E29). New and notable is the Mini Mentos Passport Kit, which consists of a real kid’s passport with a contact page, games and drawings, two stamps, three crayons, travel-themed stickers, and seven rolls of Mini Mentos in the flavors cola, orange, lemon, and strawberry. Also new is the Mentos Choco Jumbo Roll, which contains six Mentos Choco rolls. The Chupa Chups Trolls Tin gift pack is available in three eye-catching designs and filled with eight fruity lollipops for kids to collect. Mentos chewing gum has a new natural green tea liquid filling. It is available in three new flavors, Pure Fresh Mint Euca, Pure Fresh Spearmint, and Pure White Sweet Mint, and each is packaged in quantities of 45 pieces. The company’s gum assortment now comprises six flavors. PVM has also revealed its key business-driving strategy for travel retail, including identifying a must-have assortment to drive sugar confectionery sales for retailers. The firm has also outlined snacking items that fulfil travelers’ needs at the cash till point. New products are also part of the strategy. “Besides having the right core assortment, it stays our ambition to continuously excite retailers and travelers with joyful and eye-catching products, perfect as a gift for somebody else or as a gift to share,” said PVM’s Area Manager Travel Retail Asia, Benedict Ho. “We also had a close look at our gum assortment, which resulted in an optimized portfolio by replacing four existing flavors with three new flavors. As mentioned before, perfect products for the cash till point.” On the brand’s regional ambitions, Ho continued: “PVM has seen much success in the Asia Pacific region, but we still see untapped opportunities for growth in Hong Kong, China, South Korea and Japan. Singapore, Malaysia and Thailand will also be expected to grow at a sustainable pace this year.” Speaking about the TFWA show in Singapore, he said: “We have an extended kids’ line-up that provides more than just candy – but something to keep and play with. We provide a wide range of snacking items and have suitable products for the cash till point like our Now Mints or gum items.”

Hawaiian Host goes green for Asian market Hawaiian Host is introducing a new line at TFWA Asia Pacific Conference & Exhibition (Focus stand B2/E28) aimed specifically at the Asian market. Hawaiian Host Matcha Macs are green tea chocolate covered macadamias in a presentation box of nine pieces (99g/3.5oz). “Green tea based products continue to be extremely popular in Asia, so we’re confident that this new item will do well in the region,” says Sam Ho, who has recently joined Hawaiian Host from Storck as Commerical Director – Asia Pacific and Middle East. “This product also meets the trend for healthier options in confectionery products, which it is important to address.” Also new are two new Hello Kitty four piece (1.45oz/41g) boxes of milk chocolate covered macadamias: Hula and Surfer designs which, again, are perfect for Asian travellers given the popularity of the character in the region. Hawaiian Host exhibits in Singapore this year after a strong year of sales in 2016. “Our business in the region was up 7% compared to 2015,” continues Ho. “Now we’re consciously rationalising our range for travel retail to concentrate and focus on our best selling skus; we believe this is the way forward to maximise sales potential.” With its Classic Original Macadamias covered with Premium Milk Chocolate the best seller, Hawaiian Host’s key travel retail locations are through Korea, Taiwan and Thailand. “Our top customers are Korean, Japanese and Taiwanese,” says Ho. “Based on this, we are really targeting Japanese duty free at this year’s event. There’s little focus on confectionery in Japanese airports and what there is tends to be very local,” he explains. “Given the popularity of our products with the Japanese, we therefor think there’s a clear avenue for growth here. It could be a key market for us and it’s a priority moving forward.”

The Mini Mentos Passport Kit consists of a real kid’s passport, games and drawings, stamps, crayons, travel-themed stickers, and seven rolls of Mini Mentos




An insightful strategy The Hershey Company is counting on its powerful portfolio of well-known American confectionery brands to drive travel retail growth in the Asia Pacific region

As snacking accounts for 25% of purchases in confectionery, the company recommends tablets and smaller pouches such as BarkThins at the check-out/grab-and-go area for self-consumption and snacking


n 2017, The Hershey Company is focused on giving its travel retail partners insights-based solutions and capabilities to increase footfall and conversion for the total confectionery category. These solutions are based on the company’s four strategic pillars, according to Nancy Giambanco, Global Team Lead Customer Marketing, World Travel Retail, The Hershey Company. The first is “ease of shop”, which aims to increase conversion by making the category easier to shop for consumers. Second, “unlocking occasions” seeks to drive growth through focusing on purchasing occasions along the shopper journey. Third, “maximizing unplanned purchases” aims to create grab-and go-opportunities throughout the category. And fourth, “captivating

shoppers” plans to grow footfall by implementing brand interaction and promotional execution. In the Asia Pacific region, the firm has a leadership position in the Philippines, Malaysia and Singapore, and its products are readily available throughout most of the region. The Hershey Company is supported by a strong breadth of brands in the portfolio such as Hershey’s, Reese’s, Brookside, and newly added BarkThins. The company takes a market-by-market approach, and Hershey’s Kisses have proved a hit across the Asia Pacific region, along with top-sellers Brookside and Hershey’s Miniatures. “Each brand has a differentiated strength and we tailor the focus brands based on the market and consumer

Inspired by vineyards, Brookside Dark Chocolate – a best-selling brand in the Asia Pacific region – now comes in a new Merlot grape and black currant flavor



purchasing profile, targeting the ones we know will have the highest affinity,” explains Giambanco. “In the Asia Pacific region, Hershey’s Kisses is our top brand and we have also seen strong growth on our Brookside brand over the last few years.” Plans for 2017 include targeting the Indian market. “The one area we are focusing on in 2017 is the India travel retail market now that regulation changes have opened up the market for global brands like Hershey’s to command a greater presence. Globally, we have great partnerships in place with all key retailers today and we continually look to partner with them to drive category growth together.” Depending on the region, Hershey’s brands and products appeal to a range of nationalities, ranging from Chinese, Japanese, Indian, European, Brazilians, to Americans. In addition to looking at brand affinity by nationality for an airport, the firm also targets its assortment based on purchasing occasions to ensure it capitalizes on the unplanned nature of the category. “For example, as snacking accounts for 25% of purchases in confectionery, we would recommend tablets and smaller pouches such as BarkThins and Brookside at the check-out/grab-and-go area for self-consumption and snacking,” says Giambanco. Hershey also wants to make sure the main confectionery area, which accounts for 79% of confectionery purchases, is focused on its travel retail exclusive pouches and gift collection boxes for informal and formal gifting, which account for 46% of category purchases.

The new Hershey World Traveler Collection of travel retail exclusive gift boxes comprises Hershey’s Kisses, Hershey’s Miniatures and Reese’s Peanut Butter Cups


Patrón Cask Collection Sherry Añejo makes appearance at Changi Patrón’s new ultra-premium GTR exclusive offering began as all the company’s tequilas begin – with the highest quality 100 percent Weber Blue Agave. The agave was then crushed, fermented and distilled using the time honored “tahona” process, together with the more modern roller mill method. After distillation, the tequila was aged for more than two years in oak barrels from Spain that were previously used to produce Oloroso Sherry. A very limited, exclusive allocation of Patrón Cask Collection Sherry Añejo was initially produced for global duty free in 2017, prior to a broader release in select domestic markets in the future. Patrón’s Master Distiller Francisco Alcaraz explains that he’s been working with sherry casks for many years to achieve the perfect balance of the unmistakable taste from the sherry-soaked oak without losing any of the characteristic flavor of the agave. “Sherry casks exhibit an elegant flavor and aroma of pecans, which marry beautifully with the taste of agave,” he says. Recently, this GTR exclusive was featured at DFS, Changi airport in Singapore. John Kilmartin, Vice President, Global Travel Retail at Patrón Spirits International, reaffirms the channel’s important position for the company: “Travel retail continues to play a vital role in the global growth and success of Patrón tequila, which is why we’re committed to offer unique duty free exclusive products and packages in this important retail channel.”

GTR exclusive Patrón Cask Collection Sherry Añejo, produced in limited quantities, was recently featured at Singapore Changi’s DFS store

Diverse Flavours adds sake and whisky to its stellar wine lineup Diverse Flavours is well known as distributors of fine wines from South Africa including the award-winning Groot Constantia wines, South Africa’s oldest winery, dating back to 1685; Ernie Els wines, from an iconic Stellenbosch winery; Avondale, which pioneered the BioLOGIC® methodology that incorporates certified organic, biodynamic and scientific farming principles in order to create living systems naturally; and Cederberg, South Africa’s highest winery from one of the most remote wine producing areas in the world. This year at Diverse Flavours’ alwaysbusy stand at TFWA Asia Pacific, owner Antony Budd will be introducing the company’s new Japanese Sake range from Sakuramasamune, one of Japan’s oldest sake makers. In 1840 the sixth head of the family, Tazaemon Yamamura, discovered the “Miyamizu” groundwater that continues to influence the sake industry today. He was also responsible for finding out the relation between the sake quality and the rice polishing ratio. He is credited as the originator of the “ginjo-shu,” a premium sake. Diverse Flavours is also launching a Scotch whiskies from the innovative new company Charles Edge London. Scots Gold, a range of high quality Scotch Blends



at attractive price points, has been awarded Silver and Gold Medals at the Asian Spirits Masters, the International Wine and Spirit Competition (IWSC) and the Global Travel Retail Spirits Masters. Scots Gold is the perfect all-rounder and can be enjoyed neat or in signature cocktails created by Masahiko Endo, Head Bartender at the iconic whisky bar Mizunara: The Library in Hong Kong. Charles Edge London will also offer an exclusive sneak preview to their new lifestyle Whisky Trilogy at the Diverse Flavours stand, D34.

Diverse Flavours is proud to introduce Scots Gold, a range of high-quality yet well-priced Scotch blends

Craigellachie celebrates global accolades

Since its launch a little over three years ago, Craigellachie has managed to win both Best in Show at the San Francisco World’s Spirits Competition in 2015 and World’s Best Single Malt at the World Whiskies Awards in 2017

Bacardi recently celebrated the selection of John Dewar & Sons’ Craigellachie 31 Years Old as the World’s Best Single Malt at the World Whiskies Awards 2017, beating competition from hundreds of entries from across the world. Craigellachie Single Malt originally launched into Global Travel Retail (GTR) in September 2014, making this a highly notable accolade for a whisky that has only been available in market for less than three years. This prestigious award follows the outstanding success of Craigellachie 23 Years Old being crowned Best in Show at the San Francisco World’s Spirits Competition in 2015. These accolades come on the heels of Bacardi’s decision in 2014 to focus on its age-statement malts, bucking what had been the industry trend to move away from stating a malt’s age. The launch of Craigellachie was part of this strategy. In GTR, the launch of the John Dewar & Sons Whisky Emporium soon followed, giving substantial presence to the brand around the world. Craigellachie and the John Dewars & Sons Whisky Emporium have all come a long way since their respective launches only about three years ago. Georgie Bell, Global Malts Ambassador comments, “Since launching, Craigellachie has built up a huge reputation in the on-trade and with whisky connoisseurs – its sought out and admired – and the accolade is true testimony to this.”

WGS shows Glenfiddich Cask Collection’s new look in Singapore At its stand in TFWA AP in Singapore, William Grant & Sons is reafThe Monkey Shoulder drinks trolley will also be at WGS’ Sinfirming its focus on the GTR channel in general and Asia Pacific in gapore stand, serving up contemporary pre-mixed cocktails and particular, a region that accounts for nearly 50% of William Grant & playlists to delight and reinvigorate delegates weary from their busy Sons total GTR sales in the ultra-premium and prestige segments. meeting schedules during the show. Monkey Shoulder is currently The primary highlight at the event is the new packaging for Glen- the fastest growing brand in the region, achieving an 88% growth fiddich Cask Collection, which aims to strengthen the collection’s increase since 2015. visibility on-shelf and enhances the premium cues of the range while Says Scott Hamilton, WGS Regional Director ASPAC: “The everreinforcing its contemporary appeal. This packaging refresh is sup- growing importance of the Asia Pacific region makes the TFWA Asia ported by a special Virtual Reality activation, where guests are not Pacific exhibition an essential show to connect with customers. only transported into the virtual world of Glenfiddich but can also Following our new JALUX agreement, this event will be particularly write their tasting notes in the air using a unique device. The written important for meeting potential new partners in Japan.” words are visible through goggles worn by the guests and also on a large digital screen, grabbing the attention of bystanders when activated at airport locations. A company well known for its unusual promotional ideas, William Grant & Sons will have cucumber themed activations throughout key airport locations globally in the build-up to World Cucumber Day on June 14th. Innovative, interactive promotions tools such as the “Master Serve ‘O’ Matic” bicycle is designed to bring the Hendrick’s brand to life in a fun and disruptive way, and will be on William Grant & Sons’ The new Glenfiddich Cask Collection packaging will be a highlight at the WGS booth in Singapore, stand for show visitors to test out. along with the Monkey Shoulder drinks trolley and the Hendrick’s “Master Serve ‘O’ Matic” bicycle ASIA DUTY FREE & TRAVEL RETAILING



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 by



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, located in Yuanshan Township, Yi-Lan County, has really taken the world by storm. In 2015, its Solist Vinho Barrique Whisky was named “the best single malt whiskey on earth” at the World Whiskies Awards, beating out several Scotch whiskies. That is quite an accomplishment, especially given that the distillery was completed a mere 11 years ago, producing its first spirit in March 2006. So what is the secret to the success of the distiller? Ian Chang, Director of Global Export, 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 in 2015 and 2016. This made consumers and people within the industry take serious notice of us, which in turn encourages us to con-



tinue promoting Kavalan and doing our best to make quality whisky.” The company offers mostly unpeated whisky, with the exception of Kavalan Distillery Reserve Single Cask Strength Single Malt Whisky – Peaty Cask. The company has begun experimenting with smoking barley itself in Taiwan.

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 the whisky was highly praised and appreciated by them. Travel retail is a developing market for Kavalan whisky, says Chang. “According to Airports Council International, passenger traffic at the top 50 international airports in 2015 was around 2.6 billion.” He believes that more curious and open-minded drinkers have a thirst for information behind the label and experience, and this creates 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

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

Malt in 2015 and the Best Single Cask Single Malt Whisky in 2016 by the World Whiskies Awards. This means we have become 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.” 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 continues to become 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.

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EDRINGTON Edrington’s The Macallan Boutique in Taiwan has proven to be a huge success, with Its stock of exclusive Macallan Fine & Rare bottles selling out within the first month




n January 2017, Edrington appointed Igor Boyadjian as Managing Director Global Travel Retail (GTR). Boyadjian had already worked with the company in the Middle East, first as distributor and then in a joint venture. “It’s been a great and successful entrepreneurial journey; over the years I developed a strong connection with Edrington people, brands and values. That’s the reason I decided to take on this new challenge,” he says. Since Edrington’s GTR department came about in 2014, its experienced and entrepreneurial team has delivered good growth for its brands in a difficult environment, he says. “Now I will build on this legacy, further strengthen our organization and continue to build in-house expertise and capabilities. I’m not here to change course, but rather to reinforce and accelerate.”

Optimism in a challenging trading environment Despite a trading environment that remains challenging, The Macallan single malt Scotch whisky is in high demand. “We have been able to roll out exciting new initiatives, like opening our first Macallan Boutique in Taipei Airport with



Edrington’s new Managing Director, Global Travel Retail, says the company remains committed to the channel, and backs this up with exciting innovation by


our partners Ever Rich in Taiwan, and launching a limited edition of Rare Cask Black. The Boutique has posted outstanding initial sales, especially in our prestige range. Its stock of exclusive Macallan Fine & Rare bottles sold out within the first month, and the Rare Cask Black limited edition has already created buzz and excitement.” Edrington’s ambition in the travel retail channel remains very strong for the long run, with commitments from the business to invest behind its core brands, emphasizes Boyadjian. “I’ve recently read a lot of articles predicting major challenges ahead for travel retail, but the fundamentals of the channel remain strong for the future, and we believe we can continue to build the equity of our brands in this strategic channel.” Asia remains The Macallan’s main market, fueled by initiatives such as the Taiwan Boutique, the shop-in-shop at the new DFS Terminal 2 store in Changi Airport in Singapore and some exclusive launches. “The Macallan is indeed our number one priority and has enjoyed a good momentum despite a very competitive and deteriorating environment. We have a right to win with a powerful brand equity behind which we’ll continue to

invest, and a solid ambition to grow our value share in the channel. So the focus will continue, and we have some very exciting projects in the pipeline,” he says, adding that Highland Park is also “a gem, which has a lot of potential to grow.” Edrington is always active with launches, innovation and activation concepts. Boyadjian says: “The latest to roll out has been the sixth edition of The Macallan’s Masters of Photography series, an exclusive collaboration with renowned photographer Steven Klein, a true master of visual ambiguity. Working with such world-leading collaborators takes our vision, values and alchemy to a higher level. This collaboration has also extended to a limited edition of our very successful Rare Cask Black, which features the art of Steven Klein and comes with a Wintersmiths Ice Ball Maker, which produces crystal clear ice spheres, adding to the unique alchemic experience. “It has been very exciting to see this concept and product come alive in airport activations, such as the latest launch in Taiwan at the end of 2016, and we will continue to see it in other airports across the world soon.”

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The Davidoff Art Initiative names Rodell Warner Since Davidoff joined the art world as an Associate Partner of the world’s greatest art show, Art Basel, which takes place each year in Basel, Hong Kong and Miami, the company has jumped in with both feet, supporting Caribbean artists with residencies and commissions, and bringing other global artists to the Caribbean, among many other initiatives. Each year the company commissions an artist to create a Limited Art Edition. This year, that choice is Rodell Warner. In his wide-ranging body of work, Warner explores interpersonal relations by employing digital media and photography, creating unique patterns and projections. He frequently harnesses facets of new media (e.g. animated GIFs) to augment his sensitive installations. Two of his photo series, First Light and Negatives — both involving photographs projected onto his subjects — explore a progression of alteration and experimentation. His Negatives series has led to a commissioned work for Greybook magazine (Portland, OR) and an animation for DIGITAL at the National Gallery of Jamaica, 2016. Warner’s residency at New Local Space (NLS) in Kingston, Jamaica, involved a community-building aspect. The artist pro-

duced printed, patterned fabrics from images captured from nature, which he then transferred into wearable garments and functional objects in collaboration with local designers. The metaexhibition culminated in a multimedia live event that intermingled material, digital art, and the environment. Each year as part of the Davidoff Art Initiative, the company chooses an artist to create a Limited Art Edition. This year’s choice was Rodell Warner

J. Cortès presents Oliva & Nub Well-established family-owned Belgian cigar company J. Cortès, which has been strongly focused on the duty free and travel retail industry, will present the premium handmade cigars Oliva and Nub for the first time in Asia in Singapore. In 2016 J. Cortès acquired the US-based Oliva Cigars family business with branches in Miami and Nicaragua, with the aim of diversifying its product portfolio and further solidifying its position in the global cigar market. Last year the company introduced its virtual reality experience to travel retail, and this experience will be available to visitors to the

Two intergenerational cigar companies have joined together, solidifying their positions in the global cigar market



J. Cortès stand. While wearing the VR glasses, visitors will be able to live the story of the joining of two intergenerational cigar families and the making of their renowned cigars. While Oliva may be highlighted by the company this year, its travel retail exclusive Neos Selection 50 cigars are still an important offering. This selection is offered in a luxurious tin, wrapped in a sleeve and topped off with a purchase gift. The company is targeting the global market for cigars and cigarillos with its Neos Flavor Collection.

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China, An Era

of Opportunity Growth was the central theme of TFWA’s China’s Century Conference held in Guangzhou

DFS Group sponsored the gala dinner



Amman-based tobacco company Alzawrae/ Mazaya sponsored the opening cocktail

TFWA’s China’s Century conference was held at the luxurious Four Seasons Hotel in Guangzhou


n his opening speech to a record number of delegates, TFWA President, Erik Juul-Mortensen, commented on the enormous potential in China for travel retail warning that the “industry must be agile to capitalize on the significant opportunities that are out there, embrace change in all areas and make sure companies are equipped for change.” The conference official host, Qiu Jiachen, President of Guangzhou Baiyun International Airport, talked about the growth potential of the airport, which is the third largest in China with 13.5 million passengers per year. By 2030 Qui anticipates seeing more than 100 million passengers at the airport each year. Jaya Singh, APTRA President, highlighted the research APTRA has commissioned on tier two and three cities. Dr Peter Mohn, m1nd-set founder and CEO expanded further commenting that by 2030 many lower-tier cities such as Tianjin and Hangzhou, will have more upper-middle-class consumers than Beijing has today. Dr Dai Bin, President of the China Tourism Academy, emphasized the importance of tourism in China, which is a key pillar in the country’s five year plan. He commented on the potential of cruise tourism, which was further expounded by Michael

Feely, VP Horizon Consumer Science, who shared the results of a TFWA sponsored study into the cruise market in East Asia. If Asian cruising maintains its growth trajectory, it will be the number two cruise region by 2020. Keynote speakers representing retailers included Charles Chen, President of China Duty Free Group (CDFG), Philippe Schaus, Chairman, CEO of DFS Group; Emmanuel de Place, COO of Lagardère Travel Retail and Sunil Tuli, Managing Director of King Power Group (Hong Kong). Chen outlined CDFG’s plans for growth. Already a dominant force in China, CDFG is looking for future opportunities in downtown and cruise markets as well as overseas where the company will focus on Chinese tourist hotspots. Schaus focused on the importance of localization to create ‘instagrammable’ experiences for shoppers and showed examples of how DFS has brought each country’s culture into its stores in Cambodia, Singapore and Italy. De Place talked about innovation within the industry and how companies would do better by sharing information to understand customers. He introduced Marc Ardisson of Fabernovel who spoke frankly about disrupters in the industry and the challenges of working with millennials. On a similar theme, Author Helen Wang of the award-wining book The Chinese Dream, The Rise of the World’s Largest Middle Class and What It Means to You, commented on the purchasing power of millennials, 82% of whom shop on their phone, and how to capture this cash rich market. Tuli gave a thoughtful analysis of how companies can succeed in this era of disrupters, mentioning the constant evolution of the Chinese consumer and the importance of correctly identifying the challenges. He added that airports need to be more flexible in their renting structure as increased footfall no longer guarantees increased duty free sales. Giving the perspective of an airline, Li Jianhua, President and CEO of China Southern Airlines spoke about the extensive plans for growth of Asia’s biggest airline and the potential for inflight duty free sales. With 200 international routes, the airline has plans to expand its inflight duty free shops to every international flight. ASIA DUTY FREE & TRAVEL RETAILING



ALL ABOUT John Gates,

Vice President, Retail and Travel Retail Sales, Moroccanoil Where were you born and raised? Tampa, Florida.

If you attended post-secondary school, what did you study? Pre Law and Journalism.

Are you married? Do you have children? Domestic partner for 21 years, no children. What is your favorite movie? I have several, but I typically enjoy documentaries.

What is the last book you read? Feel the Fear and Do It Anyway, by Susan Jeffries. What would you choose as your last meal? Steak and frites (frites extra crispy).

Your favourite drink? Grey Goose straight up with a twist or a very chilled glass of rose.



Do you have a passion in your life (or more than one)? What? Collecting art and renovating homes.

Which historical figure do you most admire? All those that stand up for equality for all and challenge the status quo.

Do you have a pet (or more than one)? If so, what animal and name? Welsh terrier named Zuzzie.

Where and when were you happiest in your life? 50th birthday in Bali with my two best friends and my life partner.

Do you prefer country or city? A bit of both…city during the week and the country on the weekends.

What in the world would you most like to change? Poverty, neglect and violence against children (especially right now is Syria and Africa).

What is your favourite place to vacation? My home in Palm Springs, California.

What about yourself would you most like to change? My struggles with perfection and control.

What’s the first thing you do in a new place? Have it professionally cleaned and auto shades installed.

What is the most important piece of advice anyone ever gave you? Be kind and understanding to all (my grandmother-JPD).

If you could choose any place in the world to live, where would it be? South of France.

What is something about you that most people would find surprising? I can be very simple and enjoy the simple life.

Which living person do you most admire? Barack Obama.