TFWA AP 2019
DUTYFREEMAG.COM MAY 2019 · TFWA AP · VOL 23 · NO 1
The “jewel” in Changi Airport p. 10 KOLs influence TR p. 14 Cruising into China p. 26 The dawn of AI p. 52
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Letter from the Editor
is now T
he future is coming fast to Asia travel retail. In a region that has already outpaced growth in the rest of the world, to become far and away the leader in travel retail sales, this can only be seen as a positive development. While much of the world is still catching up to digital payment, Hong Kong international Airport is the first to offer facial recognition payment devices in its Duty Zero store. And this is just one of the innovative technologies the airport is offering, with the goal of turning it into a “smart airport,” leveraging different technologies to help passengers experience hassle-free shopping. An industry often reported to be behind the times, travel retail is now not only catching up but surpassing traditional retail. Artificial intelligence (AI) is helping retailers to reach consumers, with everything from Dufry’s welcoming robot named “Pepper” to L’Oréal’s ModiFace diagnostic system. AI can even be used to help with airport safety, as it is at Singapore Changi Airport. Changi Airport is always a step or two ahead, and this is especially evident with the long-awaited opening of Jewel. This incredible area features an indoor waterfall and forested hiking trails in addition to a spectacular selection of shopping and F&B. The growth in Asia has opened up a whole new exciting world for travel retail in the region. In this issue you can learn about how some of the top retailers in the region are growing and developing to take advantage of these new opportunities, from new branding and renovations to the burgeoning cruise industry. While this issue is filled with good news for our industry, we must accept that we are heavily affected by socio-political instability. Further, we must recognize that this instability often comes with a human cost. As of printing, the bombings in Sri Lanka have just occurred. Events such as these leave a deep scar, and are a reminder of how fragile we are. We send our deepest sympathies to all who lost family and friends, and to the country and community as a whole. Kindest Regards,
Hibah Noor Editor-in-Chief firstname.lastname@example.org
4 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
MAY 2019 · TFWA AP · VOL 23 · NO 1 Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published by Global Marketing Company Ltd. 26 Pearl Street, Mississauga Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldives Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. May 2019, Vol 23, No.1. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2019 Asia Duty Free & Travel Retailing.
ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan email@example.com EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor firstname.lastname@example.org ASSOCIATE EDITOR Jas Ryat email@example.com ART DIRECTOR Jessica Hearn firstname.lastname@example.org CONTRIBUTORS Rebecca Byrne Mary Jane Pittilla Elena Owyong
CIRCULATION & SUBSCRIPTION MANAGER email@example.com
What’s inside Lead Stories
10 Jewel Changi Airport Added sparkle
The opening of the multifaceted Jewel Changi Airport has propelled Changi Airport to the next level as a destination for travelers and locals
14 Key Opinion Leaders People of influence
Since the rise of social media, Influencers, or “Key Opinion Leaders” have become an important tool in the marketing arsenal; the duty-free channel is no stranger to their importance
18 Gebr Heinemann
Gebr Heinemann celebrates solid sales growth in 2018 Germany’s world-leading operator has shot into the big league thanks to its global strategy and focus on sustainability
26 Cruise News
Cruising into China With the Asian cruise industry continuing to grow, particularly in China, Asia Duty Free talks to Adrian Pittaway, Head of Retail at MSC Cruises, about the company’s plans for travel retail in the region
36 Masters of Wines and Spirits Master class
This year the eighth annual Masters of Wines and Spirits event, hosted by DFS Group in partnership with Changi Airport Group and held at Infinite Studios, explored the concept of “Masters at Work,” in homage to those who have acquired master-level skill and continue to raise the bar for others in their field
38 Airports in Asia
The sky’s the limit
The growth of domestic and international travel in Asia has led to airports in regional cities expanding to accommodate the rising number of passengers. These examples from China and Japan show how they are capitalizing on the retail benefits of this boom
Features Eraman’s refreshing outlook 20 Domestic tourism in China 24 New marketing at Mumbai Duty Free 32 AirAsia’s inflight duty free sales soar 34
The “Changi First” approach Lotte puts the customer first The dawn of artificial intelligence Facial Recognition payment option
44 48 52 56
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Lead Stories 58 Young professionals Future of duty free
Asia Duty Free reached out to eight young professionals for their take on the industry and advice they’d like to give to their 25-year-old self
68 Beauty Report
Under our skin
Beauty is more than skin deep for the leading skincare brands in Asia Pacific travel retail
A gift to savor Having climbed to the top of Dubai Duty Free’s chocolate sales rankings, Dubai-based supplier Patchi is going places in travel retail
80 Vodka Report
Vodka takes a shot at Asia Vodka is showing its strength in Asia Pacific, a region where traditionally premium brown spirits are celebrated
Distell relishes growth in Asia
Distell reveals how it moved from the sidelines to become a premier player in the duty free game
InnoTRI delivers for the curious connoisseur
InnoTRI offers a full-service approach to local and international brands alike
88 KT International
Fashion inspiration Cigarette supplier KT International is on a constant mission to innovate, as highlighted in a refreshing revamp of its best-selling brands
89 Kavalan Whisky
Kavalan Whisky’s winning ways Kavalan Whisky is gaining a foothold on its home turf and beyond
Features Add volume with Moroccanoil 66 Tous builds presence in Asia 70 Anthon Berg’s global recognition 72 Promising growth for Ritter Sport 73 Eu Yan Sang’s health expertise 74
PVM’s must-have assortment 76 Caran d’Ache pens excellence 78 William Grant spirits up a storm 79 Wine tourism pays off 84 All about Alex Cook 90
Jewel Changi Airport
sparkle View of the Shiseido Forest Valley and HSBC Rain Vortex from Terminal 1
The opening of the multifaceted Jewel Changi Airport (Jewel) has propelled Changi Airport to the next level as a destination for travelers and locals by REBECCA BYRNE
rom an open-air carpark to a 10-story spectacular landmark destination, Changi Airport has surpassed all expectations with the addition of the just-opened and longawaited Jewel. The dome-shaped steel and glass façade, which shimmers like a diamond in the sunlight, encases a wide array of first-class shops and restaurants. However, it is the garden and other attractions that set Jewel apart from its competition. Visitors can feast their eyes on the spectacular centerpiece of the HSBC Rain Vortex, the world’s tallest indoor waterfall, hike on one of the two trails in the stunning Shiseido Forest Valley with its four levels of indoor forest, or enjoy the 14,000-square-meter Canopy Park with play attractions including the Manulife Sky Nets, Discovery Slides and Hedge and Mirror Mazes.
Hedge Maze at the Canopy Park
Furthermore, the building is easily accessible to travelers. At the media briefing on its opening day, Hung Jean, Jewel Changi Airport Development CEO, commented: â€œLocated in the gateway of Singapore, Jewel will be the first stop to welcome overseas visitors and also where Singapore will play host to the world. Strategically located in the heart of Changi Airport, Jewel will now effectively hub Terminals 1, 2 and 3.â€?
Changi Airport is now one of the top-10 busiest airports in the world, and to cater to the increased number of passengers year-on-year requires foresight. Jayson Goh, Managing Director, Airport Operations Management of Changi Airport Group, said:
Opening specials: Stores celebrated the opening of Jewel with offers to their customers
Jewel Changi Airport
“It has always been part of our plan to increase the capacity of Changi so that we can better serve our passengers either through more capacity, greater efficiency or by putting in new amenities to enhance the experience of passengers as they travel through Changi.” At Jewel, the amenities are second to none. Travelers can book a cabin at the 130-room YOTELAIR for four hours or more via a self-check-in kiosk. Those connecting to a cruise can use the Changi Lounge, which offers end-to-end convenience for passengers transferring from arrival flight to vessel. For passengers who want to make the most of Jewel’s facilities, 26 airlines already offer an early check-in of up to 24 hours in advance.
First to Singapore: Jewel is offering a unique shopping experience with many of its stores entering the Singapore market for the first time
Great consideration has been given to Jewel’s retail experience, which consists of three main features: a duplex boulevard, a unique garden terrace dining experience and the opportunity to dine under the stars. Alongside the retail and F&B outlets is a supermarket and cinema. Within the over-280 units, more than 30% is dedicated to F&B while another 25% comprises flagship outlets, new-to-market brands and new-concept stores. Brands coming to Singapore for the first time at Jewel include Emack & Bolio’s, JW360°, Läderach Chocolatier Suisse, Lavender, OYSHO and Pink Fish, while new-to-Changi brands include Mango, Massimo Dutti and Violet Oon Singapore. Retailers canvassed on opening day were enthusiastic about the potential footflow at Jewel, and those new to Southeast Asia, such as Pink Fish, mentioned the benefits of Singapore as a hub for the region. Hung concluded: “We hope Jewel Changi Airport will be a landmark development not just for Changi Airport but also for Singapore. It is the result of many years of planning and committed partnerships across an eco-system of likeminded visionaries.”
Night View of the Crystal Clouds art installation
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The Duplex Boulevard is one of the main features of Jewel’s retail offering
â€‚Key Opinion Leaders
Crowds of followers gather to view Huang Xan at the Shiseido product launch
Hu Yuwan, COO of Daxue Consulting, is an expert in the field of market research and strategies with regard to influencing consumer behavior in China. She helps global companies develop their business in that country; part of her role includes engaging KOLs. She details the demographics of influencers in China. “Sixty percent of KOLs are based in tier 1 and 2 cities. They are split evenly by gender. They tend to be highly educated, born in the post ‘80s and ‘90s, with 63% having been to university. Their reach is rapidly increasing, with 23% more KOLs having over one million followers and 51% more having influence over more than 100,000 followers in 2018 versus 2017.” Hu comments that influencers tend to split into three categories: Celebrities, bloggers
Hu Yuwan, COO of Daxue Consulting
Influencer and Chinese superstar, Huang Xuan, made exclusive visits to two T Galleria by DFS stores in Hong Kong to promote a Shiseido product launch
Since the rise of social media, Influencers, or “Key Opinion Leaders” (KOLs) have become an important tool in the marketing arsenal; the duty free channel is no stranger to their importance by REBECCA BYRNE
sing Key Opinion Leaders (KOLs), also known as “Influencers,” is seen by many luxury brands as a relatively safe strategy of penetrating a highly competitive market, and an effective marketing tool in generating a high return. Active on digital platforms such as Instagram, Facebook, Weibo, Bilibili and WeChat, KOLs regularly provide new content for their large fan bases, and consumers feel a sense of kinship with them, owing to a strong online interaction these influencers build with their followers. In essence, KOLS provide a form of advertising that is frequently seen as more trustworthy. Nowhere is this more the case than in China. Its 700 million “netizens” make it the largest social media market in the world. Here the growth of KOLS has been dramatic.
Key Opinion Leaders
and internet celebrities known as “Wanghong.” Each segment has a different realm Jay Frame, DFS’ of influence, for example bloggers are Vice President knowledge oriented whereas Wanghong Corporate Communications are product oriented. and CSR The key target audience of KOLs is predictably millennials born in the ‘90s and ‘00s. The younger they are, the more their purchasing behavior is influenced by their online engagement. Hu points out that this demographic has a higher interest in cosmetics, bags and shoes, and enjoy celebrity-focused news. Those born in the ‘80s are also influenced by KOLs but in contrast are more mature luxury buyers interested in fashion and jewelry, and prefer topics focused on health, travel and family. The plethora of KOLs makes choosing the most effective one for a brand fairly complex. Though many luxury brands have found success in the Chinese market by collaborating with KOLs, there have been failed attempts, too. Brands might experience a number of pitfalls when engaging a KOL to support campaigns, some of which are obvious, but at the same time challenging to navigate. As an example Hu mentions the fake KOLs who seem to have a large number of followers but without any actual engagement. Furthermore, KOLs may even have a negative effect on the brand if content is not correctly suited to the target audience. And woe betide the brand that a KOL does not like. As much as they can enhance a brand, they can also destroy it, a phenomenon known as “Cai Lei” which directly translates to stepping on a mine. To ensure best results, Hu says it may be appropriate to hire a balanced portfolio of KOLs to support a brand.
Valerie Soh, China Customer Journey Marketeer, Schiphol Airport
Valerie Soh, China Customer Journey Marketeer of Schiphol Airport, describes the process of finding a KOL and using the influencer to best promote the product campaign. “First we team identify the target segment of passengers, be it luxury shopping or travel-experience focused. This usually depends on the period of the year when different types of passengers travel. Once this has been identified, we dive deep into that
16 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
As Jay Frame, DFS’ Vice President Corporate Communications and CSR explains, the travel retail giant regularly uses KOLs in campaigns as part of its marketing approach to drive awareness and sales both on- and offline, and to send traffic to stores. “We develop initiatives that not only allow customers to shop whilst KOLs are live-streaming through digital channels, but also enable them to purchase certain highlighted products directly from us,” she says. DFS activates across all available social media channels including Weibo, XHS, tiktok, Mafengwo, WeChat, Douyin and Instagram. Depending on the objectives, the retailer works with a blend of micro and macro influencers according to their strengths and areas of expertise and influence, keeping in mind the number of categories that DFS is active in, and how those categories lend themselves to the various channels. It aims to leverage the KOL’s individual voice, style, point of view and version of storytelling. Frame comments: “These components are just as important in the KOL selection process as their number of followers.” When DFS Group and Shiseido Travel Retail introduced a new Shiseido concept counter at T Galleria Beauty by DFS, Causeway Bay in Hong Kong, they called on Shiseido China Skincare Spokesperson and Chinese superstar, Huang Xuan, who made exclusive visits to two T Galleria by DFS stores in Hong Kong to promote the product launch. Jay notes: “It was a major initiative where we engaged the audience to participate during the event and it generated our highest number of impressions and engagement in 2018.”
specific segment of influencers and research who best fits our company ethos. “We reach out via our Weibo channel for an initial conversation to understand whether there are synergies for working together. Sometimes we receive referrals from previous influencers we have worked with. “We are fortunate to have a very understandable product. I always keep the lines of communication open and I believe the strongest campaigns come from giving the influencers breathing room to interpret and co-create our campaigns. I always discuss with them the key communication message and make sure it’s something they are proud of and comfortable with. “Our influencers are positioned as mini-ambassadors for our brand. Most of them sign a partnership agreement with us for a term of six months. In that period, we co-create content material for our campaigns online and offline. “Different segment influencers serve different purposes. As a general rule, the aim for our influencers is to bring cultural context to our campaigns with the addition of an unique voice. Visibility within the influencers channel is a very welcome addition as well, but our influencers are seen more as another communication channel within the campaign.”
Gebr Heinemann celebrates solid sales growth in 2018
Germany’s world-leading operator has shot into the big league thanks to its global strategy and focus on sustainability
ebr Heinemann posted sales up 11.4% to €4.6 billion (US$5.2 billion) last year, driven by the group’s diversification strategy. To strengthen its growth and agility, the duty free operator initiated major structural changes across its entire organization at the beginning of 2019. As a result, Max Heinemann, the fifth generation of the family, took over the role as Chief Executive Officer of the group. His father, Gunnar, and uncle, Claus Heinemann, continue to form the Advisory Board. The new structure seeks to focus on further global growth, “sensible” synergies and sustainability, as well as shaping the next generation to be fit for the future and, in turn, fit to shape the industry, the company said in its results announcement. “We change with a growth mindset and, based on our history, with a strong foundation for rethinking and changing – and we act out of strength,” said CEO Max Heinemann.
A challenging 2018
Gebr Heinemann reported turnover of €4.6 billion (US$5.2 billion) last year, up 11.4%
In what it described as a “very challenging” business year, Gebr Heinemann experienced healthy development in 2018. In a competitive environment, in which business in the core markets is being heavily influenced by global macroeconomic and political developments, the group performed very well overall and acted efficiently and flexibly, to take advantage of these market conditions, it said. This is reflected in the preliminary controlled group turnover of Gebr Heinemann and affiliates of €4.6 billion (US$5.2 billion), a growth of 11.4%. Group-wide, the wholesale segment remained almost stable and increased by 0.2% to €0.9 billion (US$1 billion). The groupwide retail sales segment increased by 14.5% to €3.6 billion (US$4 billion). By category, LTCF (Liquor, Tobacco, Confectionery & Fine Food) is the strongest with a 56% share, followed by Perfume & Cosmetics at 34%. The Hamburg-based firm built on its strong position in many regions, particularly in Eastern European countries such as Russia, Ukraine and Lithuania, and saw a positive trend in the top retail locations, as well as in new concessions and openings (Tel Aviv, Hong Kong, Gold Coast, and with Carnival Cruise Line). The new centralized, regionally structured sales area (with former distribution and retail) under COO Raoul Spanger saw a positive trend in 2018, in Gebr Heinemann’s top retail locations. Distribution will also continue to be an important pillar, the operator noted. Following the early contract extension agreement with Copenhagen Airport to operate the Tax Free Heinemann Shops until at least 2023, Heinemann officially opened the refurbished and 18 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
expanded (over 200 square meters) Main Shop in July 2018. Additionally, the partnership with the James Richardson Group at Ben Gurion Airport in Tel Aviv was very successful, the company said. The location is already the third strongest retail location within the group by sales volume (more than US$400 million), behind Istanbul and Oslo. With the new Istanbul Airport, Heinemann has acquired a business with impressive dimensions in terms of format, with a size of 53,000 square meters, along with the unique center management business model. The operation started successfully with a soft opening on October 29, 2018, which was followed by the opening of five further duty free shops on January 15, 2019. All flights finally switched to Istanbul Airport on April 6 and all duty free shops operated by Heinemann and partner Unifree are now fully open. Rental agreements have been signed with over 70 operators and brands such as Louis Vuitton, Dior, Hugo Boss and Prada. Gebr Heinemann’s business in the Asia Pacific region has achieved particularly strong growth. Heinemann Asia Pacific (HAP) has eight single-category confectionery shops at Hong Kong International Airport. Operations have also started at Gold Coast Airport – the second retail location in Australia after Sydney. Heinemann Australia secured the contract for two shops in both the Departures and Arrivals areas. Increasing numbers of passengers from Asia have visited Australia, leading the Sydney retail location to benefit from “excellent” development, according to the operator. It achieved strong growth in its third year, around 10% more than in 2017, and this is considerably ahead of passenger growth. The joint venture between DFZ Capital and Heinemann Asia Pacific had a good 2018, achieving satisfactory growth of both the border shop and airport business, despite the challenging economic climate in Malaysia.
Plaza Bali opened the first Arrivals shop at Jakarta International Airport in January 2019. The Indonesian duty free, retail and F&B company is HAP’s second-largest distribution customer. 2018 also saw the launch of HAP as a retailer onboard the Carnival Spirit cruise liner. In addition, Heinemann Americas and Heinemann Asia Pacific won a new tender for three Royal Caribbean cruise ships. The new venture is due to set sail in 2020. In Europe, Heinemann will also add further vessels to the retail portfolio in 2019. Heinemann’s growth in Eastern Europe & Central Asia is largely a result of the joint-venture activities at Moscow Sheremetyevo and Domodedovo airports. At Sheremetyevo, together with partner IDF, the company opened 10 new shops in Terminal B and introduced the new customized multibrand concept for Fashion & Accessories and Watches & Jewellery in Terminal E. Another grand opening of a walkthrough flagship store took place at Vilnius Airport. The conversion of the shop followed the six-year contract extension agreed between Vilnius International Airport and Travel Retail Vilnius at the beginning of 2018. The border shop channel is also a big sales driver for EECA.
Made by hand, fuelled by love. RECIPE NO 23 VERONICA & FENNEL
The purchasing division – overseen by CCO Kay Spanger – focused on developing product ranges, as markets are changing much faster than they did a few years ago, the operator noted. Perfume & Cosmetics remains a growth-driving category despite “aggressive” online and domestic price competition. The market has become much more dynamic and traveler needs are more complex – from price-sensitive or luxury-oriented shoppers to those seeking sustainable, certified organic products. The company observed that “more and more customers are looking for their ultimate, unique signature fragrance, a scent that suits them perfectly”. In 2018, Heinemann began to expand the range and presentation of niche fragrances. With regard to Liquor, Tobacco, Confectionery & Fine Food (LTCF), differentiation from domestic is key, it said. The company focuses on unique products, craftsmanship, tailormade labels and exclusive promotions. Gin continues to be a massive trend and the popularity of Japanese whiskies also persists. Fine food is developing into a core category for Heinemann, it added. Sales in the category rose by some 15% in retail and by more than 20% for distribution customers in 2018. The category achieved a retail volume of more than €40 million (US$45 million) for the year. The Fashion & Accessories and Watches & Jewelry categories still have a high priority, as there is a clear trend worldwide towards them in the travel retail market. The Travel Retail Data Innovation Group (TRDIG) for digital and automated data exchange between industry and travel retailers, initiated by Heinemann, held its first strategy meeting in Hamburg in June 2018. CEOs, IT heads and master data experts from around 35 top suppliers, as well as leading representatives from five different retailers from the duty free industry, took part.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Executives from Eraman celebrate the new brand relaunch
A refreshing outlook
by REBECCA BYRNE
Malaysia Airports’ subsidiary Eraman continues to achieve strong growth through its innovative marketing campaigns, new concept stores and strategic partnerships
alaysia Airports subsidiary Eraman, which started out with high-end fashion boutiques at Sultan Abdul Aziz Shah International Airport in Subang over two decades ago, has become the largest duty free and airport travel retailer in Malaysia. Last year saw Eraman’s continued success, with 2018 another positive year for the company.
Zulhikam Ahmad, General Manager of Malaysia Airports (Niaga) Sdn Bhd, commented on the highlights of the year: “Alongside favorable passenger movements, our dynamic partnerships with major financial players such as Alipay and Union Pay International as well as joint campaigns and promotions with brand principals and banks have been major drivers to growth.”
According to Ahmad, popular marketing campaigns had also contributed to increased sales. Successful marketing campaigns during the year included a partnership with Maybank Cards, launched during the Chinese New Year celebrations in February and March. The “Prosperous Rebate at Eraman Malaysia 2018” initiative offered cash rebates for a minimum spend and led to a year-on-year increase in sales growth of 45% for the two months. In conjunction with Eraman’s 25-year anniversary last year, the company had launched the Eraman Zulhikam Ahmad, General Manager Shopping Extravaganza #25Amazingof Malaysia Years Contest last year. This contest Airports (Niaga) Sdn Bhd was aimed at strengthening the company’s brand awareness. Offering prizes totaling RM1.2 million, it attracted over 200,000 entries from countries such as Malaysia, China, India, Singapore, Europe and India.
20 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
The Perfumes and Cosmetics category (P&C) saw the biggest increase in sales due to the surge in demand from Chinese travelers. Capitalizing on this escalation, Eraman opened four dedicated monogram concept boutiques. A trinity collaboration between Eraman, MAHB Commercial Services and Estée Lauder Group resulted in famous brands, namely M.A.C, La Mer, Tom Ford and Jo Malone, becoming part of Eraman’s beauty offerings for the first time at Kota Kinabalu International Airport. This helped the company record double-digit growth year-on-year in the airport. In September 2018, Eraman set another milestone by opening three new standalone P&C boutique stores for leading beauty houses M.A.C, Jo Malone and Gucci at the Contact Pier of KL International Airport (KLIA). The Gucci boutique store is the first of its kind in an airport in Southeast Asia.
Food and beverage initiatives
During the past year, the Food and Beverage (F&B) business also recorded a positive jump. This was mainly due to new initiatives at KLIA. Eraman introduced two coffee kiosks as well as two buggy services at both the Contact Pier International and Domestic halls. The first-of-their-kind mobile food buggies offer cold and hot drinks, pastries and
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snacks to airport passengers from 7am to 11pm daily. Eraman’s F&B offerings have garnered awards during the year with outlets Bibik Heritage klia2, Mamak Kandaq Rice Penang and Pantai Timur of Food Garden KLIA all being awarded the KULinary Dining Choice Award 2018. Zulhikam is clear on 2019’s goals: “Currently, Eraman is focused on both refurbishment and expansion. The refurbishment program rolled out in 2018 has raised the retail profile of our airport stores. We are currently refreshing our brand offering and reenergizing our retail mix, spaces and format.” He states that objectives of the brand refresh are fourfold. First, to strengthen Eraman’s brand presence in airport terminals by introducing a distinctive corporate brand identity. Second, to build a clarity of “Brand Positioning” and “Brand Story” behind the visual identity. Third, to strengthen and build brand awareness through elements that are engaging, easily recognizable and transferable to all aspects of Eraman outlets. And finally, to enhance the ambiance of Eraman retail outlets. In addition, Eraman will continue to work closely with strategic partners, leverage its online/e-commerce platform and explore in-store opportunities such as digital advertisements to attract customers.
At the Eraman brand refresh launch were: Malaysia Airports (Niaga) Chairman Datuk Seri Michael Yam (fifth from left), Deputy Minister of Transport Dato’ Kamarudin Jaffar (centre), Group Chief Executive Officer of Malaysia Airports aHoldings Berhad Yang Mulia Raja Azmi Raja Nazuddin (fifth from right) with Malaysia Airports (Niaga) Board of Directors, former CEO and Chairman during the ERAMAN Brand Refresh Launch.
22 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
ERAMAN TAKES ITS BRAND TO THE NEXT LEVEL
Eraman is taking bold steps to rebrand its travel retail stores and F&B outlets to be bigger and better. It will also be realigning the product categories and revamping the stores’ concept designs on top of enhancing guest experience through experiential marketing and digitalization. This rebranding is aimed at enhancing Eraman’s brand presence and awareness among local and international travelers, setting it apart from its competition. It will help position Eraman as the most preferred airport travel retail and duty-free player in Asia Pacific by offering the most complete shopping experience through excellent customer service. Datuk Seri Michael Yam, Chairman of Eraman, commented that the organization has seen significant growth over the years not only in terms of sales growth but also in terms of creating unique experiences in the world of airport duty free in Malaysia. Eraman is forging ahead this year to solidify its presence by refreshing the brand. He added that that the Perfumes and Cosmetics category is one of the retailer’s drivers, with commendable growth in 2018: “This was no doubt contributed by our many new initiatives last year,” he said. “We opened four dedicated monogram concept boutiques under the Perfumes and Cosmetics category; M.A.C, La Mer, Tom Ford and Jo Malone in Kota Kinabalu International Airport. We also opened three new stand-alone Perfume and Cosmetics boutique stores for leading beauty houses M.A.C, Jo Malone and Gucci at Departure and Arrival Hall of KL International.” As part of the brand refresh initiative, visitors to Eraman outlets will notice the new and stylized logo where the letter “e” has been encapsulated within a hexagon, representing a gift box with the “e” formed by a ribbon that holds the gift. Colored in a vibrant purple palette, the design speaks to deliver its promise of excitement – that in every path that a traveler takes, Eraman will be there to offer a warm welcome and to make sure that no traveler leaves without a heartfelt gift, be it for themselves or as a souvenir for loved ones. Other changes include enhancements to the façade of all Eraman outlets, as well as new modern designs for the staff uniforms. Eraman is confident that the rebranding exercise will strengthen and build brand awareness through elements that are engaging, meaningful, easily recognizable and transferable to all its outlets, including both merchandising and food and beverage segments.
DUTY FREE & TRAVEL RETAILING MAGAZINE PRESENTS:
W S’ A E CHOIC
WHO CAN VOTE?
Our readers will have the chance to vote online for their favorite suppliers and retailers in six different categories. Winners and runners-up will be announced in July 2019.
Readers will vote for the best company in six different categories for each of the three regions: the Americas; Middle East and Africa; and Asia. 1. 2. 3. 4. 5. 6. 7.
Best Perfumes & Cosmetics Supplier Best Confectionery & Fine Foods Supplier Best Spirits Supplier Best Tobacco Supplier Best Jewelry, Watches, Handbags & Accessories Supplier Best Airport Retailer Best Border Store, Downtown & Non-Airport Retailer
March 2019 – Voting opens for readers 31st May 2019 – Voting closes July 2019 – Winners announced
Your input can help shape the future of the industry by recognizing the best and brightest in the business – and if your company falls into one of these categories, encourage your colleagues to vote too.
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Domestic Tourism in China
No place like home
China may have the world’s largest outbound tourist market, but international tourism spending is dwarfed by domestic travel spending. King Power Group (Hong Kong) is well placed to take advantage of this boom by REBECCA BYRNE
tic tourism. Figures from the National Bureau of Statistics of the PRC showed that the population of Chinese aged 60+ is estimated to reach 400 million by 2050. This demographic has plenty of time for leisure activities. King Power Group’s experience in China comes through its many concessions at Chinese airports, including over 60 duty paid stores at Shanghai Pudong airport, and also a strong portfolio of downtown operations. The company owns and manages multiple domestic retail points of sale in China including its own brand shops such as Agatha and Patrick Cox, and it is the retail licence partners for many other luxury brands. This breadth of operation gives it a deep understanding of the needs of the local consumer.
Sunil Tuli, Managing Director, King Power Group HK
he growth in domestic tourism is exploding in China. With only 7% of its citizens owning a passport, it is not surprising that the majority of trips are made within the country, an astonishing 5.5 billion during 2018 – an increase of 10.8% over the previous year. For Asia’s King Power Group, China has proved to be its most consistent growth area, particularly in domestic and duty paid. Sunil Tuli, Managing Director, King Power Group HK, comments on the rise of discretionary spending on items such as travel, entertainment and retail, saying: “According to official government figures, we see that this economic growth over the last few decades has lifted close to 740 million Chinese people out of poverty, and we are witnessing the largest migration ever from rural to urban areas.
24 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
It never comes easy This has resulted in the growth of the country’s middle-class society.”
A recent study by Boston Consulting Group revealed that China’s middleclass consumer market is projected to be the world’s largest by 2020 – comprising 338 million households, worth 44.3 trillion yuan. As a result, China’s tourism industry is growing fast on the back of rising disposable incomes and middleclass consumption. Millennials continue to drive domestic tourism consumption. The post-80s generation in particular are experienced travelers with high spending power. At the same time, Tuli comments that the rapidly aging population in China also provides clear opportunities for domes-
Tuli points out that operating on the domestic market is not without its challenges. While the government may encourage domestic tourism with favorable policies, many domestic airport authorities still expect high rent or fees for duty paid retail concessions, regardless of location. He adds: “On top of this, margins are usually lower in duty paid retail as we’re dealing with domestic terms, buying from either subsidiaries or domestic distributors. It makes for a very fine balance in getting the price right for the consumer while still making it profitable enough to run a business.” There are also disruptors in the industry, be they discounters, parallel traders or e-commerce. However Tuli concludes that, despite these challenges, the industry continues to grow and opportunities are manifold for the experienced operator.
China With the Asian cruise industry continuing to grow, particularly in China, Asia Duty Free talks to Adrian Pittaway, Head of Retail at MSC Cruises, about the company’s plans for travel retail in the region by REBECCA BYRNE
Zoe, MSC’s virtual personal cruise assistant, provides shopping information in Mandarin
26 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
Asia Duty Free: How do you plan to capitalize on the rapid growth of cruises in Asia? Adrian Pittaway: Asia is an exciting new market for MSC Cruises, with new opportunities to reflect the growing global reach and ambition of the company. We will continue to develop in China in particular, and in 2020 we will deploy MSC Bellissima to this region, one of our newest ships. This amazing ship will be the largest cruise ship in Asia on her debut, and will have capacity for up to 5,700 passengers. The average cruise in China will be four days long, with departure from a number of mainland China ports, predominantly Shanghai.
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Adrian Pittaway, Head of Retail at MSC Cruises
Zoe will be available in every cabin on board MSC Bellissima
ADF: How do you handle travel retail onboard? AP: At MSC Cruises we are completely unique in the Asian cruise market as we run all of our retailing in-house. This model allows us to develop a closer connection for our retailing onboard with the rest of the hotel services. This holistic approach allows for flexibility, cross promotion, integration of team, simpler guest communication and full mobility of ship resources. With over 170 nationalities served across our fleet from our 170+ onboard boutiques, we have learnt how best to adapt our retail offering to meet the different needs, requirements and motivations of our guests. In Asia, we took particular attention to take feedback from our retail team, our passengers and market trends to consciously adapt and upgrade our retail experience to meet the needs of Chinese passengers.
The MSC Bellissima will be deployed in Asia in 2020 *Image courtesy of Ivan Sarfatti
28 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
ADF: What is different about the Chinese market? AP: We know that Chinese cruise passengers love to shop. It is a highly important part of their cruise experience on our fleet. We provide the opportunity for them by offering over 200 different brands tailored specifically to Chinese tastes. We work closely with all our brand partners to create particular assortments, specific offers across the seasons, Chinese language training onboard to ensure clear understanding of each brand, exclusive events and unique product ranges. At MSC, we operate a number of long-term brand partnerships in this market and therefore we have learnt the evolution of cruise retail alongside many of our major partners. Chinese cruise passengers want to find their favorite brands onboard such as Omega, Salvatore Ferragamo, Swarovski, Shiseido, Lego, EstĂŠe
Lauder, Dior. But the key for us is to give each of these brands a unique experience that can only found on our cruise ships. Our retail team onboard is able to give our guests an engaging and entertaining shopping experience onboard, and this is key to our success. We engage with our ship command across all our itineraries to come and support us with grand events such as shop opening, unveiling new collections, special signings of limited products and photo opportunities. We also work with a number of our brand partners to give their most popular events a distinctly Asian spin. For example, personalized engraving, special MSConly editions, free gifts and chances to win great prizes.
ADF: What sets MSC travel retail apart from its competition? AP: Our digital infrastructure on both MSC Splendida and MSC Bellissima allows us to continually understand the ever-evolving needs of our Chinese guests. From adopting the technology of accepting mobile payments in the middle of the ocean, to the ability to connect into WeChat mini programs. From the use of Zoe, our virtual personal cruise assistant, which provides shopping information and is available in Mandarin, to the ability to use “MSC for Me” to give localized information on shopping, we believe that our smart ship initiatives give us a unique advantage over other cruises in this region.
The MSC Bellissima will showcase brands targeting the Chinese market *Image courtesy of Ivan Sarfatti
THE CRUISE INDUSTRY IN CHINA
According to Cruise Lines International Association, 2018 saw moderate growth in cruise passengers throughout Asia of 5%. China still remains the fastest growing market in the region, even with a slight softening in growth over the past couple of years due to political and regulatory issues such as the tension with South Korea over the missile defense system, which made South Korean destinations off limits to ships leaving China. The vast majority of Chinese passengers sail on contemporary or premium cruise lines, showing that the market has not yet reached a point where there are options at every price point or for every type of traveler. Luxury, upscale and expedition cruising are still not as popular. Furthermore, cruising is not yet a habit for travelers in China, with only around 2.4 million Chinese taking to the seas in 2018. Their cruising habits are different from traditional Caribbean and Mediterranean cruises as well. For example, Chinese don’t like to spend as long on a ship, preferring three- to five-day cruises. That compares to about a week for North Americans and nearly nine days for Europeans. However, by 2020, China’s Ministry of Transport expects the number of Chinese cruise travelers to reach 4.5 million. More
30 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
and more Chinese tourists are opting to cruise to destinations in Asia, and capacity is growing rapidly to meet the demand. While 2.8 million Chinese opted to cruise last year, this is only a penetration rate of 0.2% of the population and a drop in the ocean compared the 135 million outbound tourists. The market is still ripe for development. It is unsurprising, therefore, that a vast number of cruise companies are making moves into China. Market leaders Carnival Corporation and Royal Caribbean Cruises are both in the Chinese market as are Norwegian Cruise Line and MSC. Joint ventures abound, with companies such as Carnival joining forces with China State Shipbuilding Corporation to operate its own fleet to serve Chinese cruise guests by the end of 2019, purchasing two existing ships from Carnival’s Costa Group. More recently Viking and China Merchants Shekou united to build a cruise line with worldwide cruise offering for the Chinese market. With port infrastructure in China improving and countries such as Japan, South Korea and Taiwan having sufficient infrastructure to welcome a large number of Chinese ships, China looks to remain a target market for cruise companies.
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Mumbai Duty Free
Bollywood superstar Shah Rukh Khan presenting a Mumbai Duty Free customer with tickets to his movie Jab Harry Met Sejal
Movie marketing pays off for
Mumbai Duty Free
arlier this year, Mumbai Duty Free (MDF) announced its highest monthly sales in December 2018. The retailer’s sales rose by more than 21% compared to the same month in 2017. According to MDF, the stellar results can be attributed to its strategy of “creating additional value” for its customers. The value is imparted to customers in various forms in multiple tactical campaigns such as ‘Mumbai Duty Free Is Now Free’, ‘The Big Bollywood Campaign’, ‘Pay Zero’ and ‘The Great Duty Free Sale’. Among the aforementioned campaigns, ‘The Big Bollywood Campaign’ and ‘Pay Zero’ used movie associations to create value for customers. Speaking exclusively to Asia Duty Free magazine, MDF Marketing Manager Nidhi Aggarwal shared the company’s rationale for using movie associations as part of its marketing strategy. “Since Mumbai is the base for the Bollywood film industry, promoting movie campaigns lends a sense of place to our stores and shopping experience to our customers,” she explained. Bollywood is the second-largest film industry in the world, after Hollywood. MDF conceptualizes in-store Bollywood experiences to provide a strong branding and customer experience. This is done through a combination of lavish thematic décor, free movie merchandise and discounts on movie tickets. The biggest gratification for customers is the 32 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
chance to meet the movie stars, according to Aggarwal. When asked how MDF evaluates the success of its movie tie-up strategy, Aggarwal shared that “visually, the campaign success can be gauged through the customers’ excitement on seeing the movie communication in-store, eagerness for photo opportunities with movie props, and their engagement in in-store contests to win movie tickets.” “Empirically, the willingness of customers to spend more than they normally would, just to be eligible to win campaign gratification, is a clear indicator of the association’s success,” she added. In 2015, MDF launched its first Bollywood campaign in collaboration with Red Chillies Entertainment’s film Dilwale. Describing the campaign as “wildly successful in exciting Mumbai international travelers”, Aggarwal noted that since that first tie-up, MDF has been experiencing phenomenal success with every subsequent movie association. Dilwale was a romantic action film starring actors Shah Rukh Khan, Varun Dhawan and Kriti Sanon.
Mumbai Duty Free is really moving merchandise with its Bollywood film promotions by ELENA OWYONG
seekers”. “This means that their spending behavior is directly influenced by their perceived value of their purchases. Additionally, they are much more motivated by tangible and multiple shopping benefits than by blanket discount offers.” Thus, MDF’s marketing campaigns such as “Mumbai Duty Free Is Now Free – Shopping Festival” offers customers a combination of free shopping gift cards, cashback offers as well as additional discounts from partner brands. Besides that, MDF continues to stay ahead of the competition by launching new partnerships with retailers. For instance, it has introduced Burberry make-up for the first time in India.
Stealing the hearts of Indian travelers
Aggarwal said 80% of the customer base at MDF’s Mumbai International Airport store are Indian travelers and locals. She added that extensive consumer research had revealed that most Indians are “value
Mumbai Duty Free decks out its stores with movie posters, lifesized cut-outs of the cast, moviebased props and LED signage
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For Malaysian low-cost carrier AirAsia, inflight duty free sales remain a profitable source of revenue, thanks to its e-commerce marketplace OURSHOP
AirAsia’s inflight duty free sales soar Malaysian budget carrier AirAsia is boosting inflight sales by turning to e-commerce and emphasizing value
by ELENA OWYONG
n recent years, many airlines have seen falling sales for their inflight duty free products and services. A report by m1nd-set Generation, the travel retail researcher, found that airline duty free sales are expected to decline at a rate of 1.5% annually, between 2016 and 2025. Some leading airlines like United Airlines, American Airlines, Qantas and KLM Royal Dutch Airlines have ditched their inflight duty free service, citing reasons that ranged from poor sales to a change in customer demand and retail buying patterns. However, Malaysian low-cost carrier AirAsia has seen strong growth in its inflight duty sales and even opened an e-commerce marketplace to increase its revenue further. For AirAsia, inflight duty free is a key contributor to its revenue. AirAsia Group’s Head of Ancillary, Barry Klipp, said: “Inflight duty free continues to represent a large proportion of our ancillary revenue, especially in Malaysia, where we are seeing 60% year-on-year growth.”
34 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
Increasing revenue online
Much of the growth of inflight duty free sales can be attributed to AirAsia’s e-marketplace, OURSHOP. Launched in July 2018, the online marketplace sells a wide variety of products, including alcohol, beauty, fashion, local souvenirs, gadgets and AirAsia-branded merchandise. Customers can pre-book the duty free products and have them delivered directly to their seats. Currently, OURSHOP’s collection is available in Malaysia, Indonesia and the Philippines. When asked about the rationale for starting the online marketplace, Klipp said: “The fact that we carry almost 90 million passengers presents a huge opportunity for us when it comes to our e-commerce marketplace, OURSHOP and onboard duty free. OURSHOP helps to realize our vision to become a travel technology company.” The airline served more than 81 million passengers last year, and this figure is expected to reach 90 million this year. AirAsia’s success in inflight duty free
OURSHOP recently offered a 30% storewide discount on duty free products for customers who spent a minimum of MYR150 (US$36.80)
sales is perhaps due to its commitment of delivering excellent value to customers. “Considering guests have chosen to fly with a low-cost airline like AirAsia, we place considerable emphasis on value. This means attractive price points, the right product selection, and a userfriendly shopping experience. By getting this right, we are able to offset any unnecessary cost and ultimately increase sales volumes,” Klipp explained. At the same time, AirAsia is also able to keep its prices competitive by building a strong relationship with retail partners. “As Asia’s largest low-cost airline with an extremely captive audience, retailers see the value of having a direct relationship with us. Brands and retailers who partner us know that by offering competitive pricing,” Klipp shared. As part of its future plans, Klipp revealed that AirAsia will be offering its OURSHOP collection to India by the end of this year.
Masters of Wines and Spirits
Master class This year the eighth annual Masters of Wines and Spirits event, hosted by DFS Group in partnership with Changi Airport Group and held at Infinite Studios, explored the concept of “Masters at Work,” in homage to those who have acquired master-level skill and continue to raise the bar for others in their field by REBECCA BYRNE
The Masters (From left:) Brooke Supernaw of DFS as Master of Curation, Ewan Gunn of Diageo as Master of Whisky, Sarah Burgess of The Macallan as Master of Malt, Jay Frame, VP Head of Communications DFS, DJ Arthur Bray as Master of Music, Fabrice Papin of Château Lafite Rothschild as Master of Wine and Hidetsugu Ueno of Bar High Five as Master of Cocktails
T DFS Senior Vice President Spirits, Wine, Tobacco, Foods and Gifts, Brooke Supernaw
36 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
his year 140 products from 60 brands were showcased at DFS’ Masters of Wines and Spirits event. Brooke Supernaw, DFS Senior Vice President Spirits, Wine, Tobacco, Foods and Gifts, spoke with Asia Duty Free at the Masters of Wines and Spirits event. She commented on the rapid growth of the event and the benefit to DFS, its partners and customers as it presented exclusive and rare wines, whiskies, cognacs and champagnes from the world’s best chateaux and distilleries, all under one roof. “We have a new venue, a new theme and a new collection each year,” she said. The 2019 collection explored the theme of “Masters at Work,” celebrating six masters across a spectrum of backgrounds. Supernaw took on the role of Master of Curation alongside Ewan Gunn of Diageo as Master of Whisky, Sarah Burgess of The Macallan as Master of Malt, Fabrice Papin of Château Lafite Rothschild as Master of Wine, Hidetsugu Ueno of Bar High Five as Master of Cocktails and DJ Arthur Bray as Master of Music.
For a second year, DFS added an “affordable” collection. Supernaw acknowledged that while the top-tier exclusive products are popular with some customers, others may not want to spend tens of thousands of dollars to access quality wines and spirits. “To give these consumers the opportunity to enjoy the rich history and craftmanship of our world, we worked with existing and new brands to bring in an affordable luxury collection,” commented Supernaw. Forty unique products, 13 of which are single casks, were selected by and bottled for DFS to meet the right price point for these customers. Supernaw praised Changi Airport Group and DFS’ brand partners for their participation in making the event so successful. To reach a wider audience, the collection moves to DFS’ stores at Changi Airport while a smaller curated collection will be shown to select customers in other locations, including Hong Kong and Macau.
Customers are increasingly interested in the heritage of product, noted Supernaw. “People want the story behind the product, how it was distilled, what type of cask was used, how it was aged.” The Masters of Wines and Spirits event is one initiative, but DFS is constantly looking for further opportunities to educate its customers. Another example is The Whisky House at Changi Airport, which was developed to take the customer through the journey of discovering single malts, a category that has seen a recent surge in popularity. Travelers are also becoming more adventurous and looking for something unique. To meet this demand, DFS focuses on elevating exclusives within its assortments. The Changi First programme, bringing products, programmes and activations to Changi airport before bringing elsewhere, was started 10 years ago and in 2018 DFS launched over 130 Changi Firsts across spirits and wine. “This creates a sense of urgency and demand as the traveller comes looking for the latest exclusive in our stores,” said Supernaw. Next on the horizon is the third year of DFS’ Whisky Festival, which will open at Changi Airport and includes an event on the concourse to highlight DFS’ rare single malt portfolio. Supernaw alluded to more surprises in the pipeline during 2019 designed to keep DFS as the go-to retailer for customers travelling through Asia and the rest of the world.
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Airports in Asia The new T4 at Hangzhou International Airport, slotted to open in 2022, will have 40,000 square meters of retail space
The sky’s the limit by REBECCA BYRNE
The growth of domestic and international travel in Asia has led to airports in regional cities expanding to accommodate the rising number of passengers. These examples from China and Japan show how they are capitalizing on the retail benefits of this boom
ettled firmly in both the ancient and modern worlds, Hangzhou is one of the eight ancient capitals of China and also an emerging technology hub, hosting companies such as Alibaba. Its location within Zhejiang Province in eastern China, an area of rich culture and advanced tourism, all but guarantees the airport as one of China’s fastest growing outside of the main cities. The 10th busiest airport in China, Hangzhou International Airport expects to host over 40 million passengers this
year. David Jea, Deputy General Manager, comments: “While recent government policies may have dampened growth, we are still second in growth in China, with 66 airlines serving 177 destinations.” In preparation for the 2022 Asian games, Hangzhou International Airport is in the final construction phase of its fourth terminal. This addition will take the airport’s passenger capacity up to 90 million by 2030, propelling the airport into position as the second largest hub in eastern China.
Shopping at Hangzhou
The existing terminals currently offer 177 stores covering 21,000 square meters. China Duty Free (CDF) has been the sole duty free retailer since the international terminal commenced operations in 2010. The original contract was for eight years, and has been extended for a further four years until the new terminal opens. At the international terminal, CDF’s area includes over 1,000 square meters at departures level and more than 100 square meters in arrivals. Jea speaks highly of the retailer. “China Duty Free has helped to greatly enhance the image of the retail areas through their renovation/refurbishment works. Furthermore, they have introduced a dedicated area for the promotion of products and to facilitate customer interaction. This all
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Airports in Asia
are trendy, stylish and popular, offering a variety of products available at reasonable price points for all types of customers, in line with other regional airports such as Hong Kong and Singapore Changi. “Normally, the brand quality, its consumer awareness, and a rational bid price are the key elements for assessment under the tender appraisal process,” says Jea.
Large international numbers
In 2018 Japan’s Centrair Airport introduced the Samurai Ninja Airport Project to promote the local historical culture to international tourists
serves to create a quality retail environment that reflects directly in the retail revenue growth.”
Other retailers at the airport consist of domestic concessionaries and separate brand owners. Terminal 3 contains an area reserved for heritage stores, which offer historical and cultural products ranging from Chinese fans and teas to calligraphy supplies, Chinese eaglewood and antiques. It is currently undergoing complete renovation. The top-selling product categories in recent years are cosmetics and cigarettes, especially in the duty free segment. Chinese national cigarette brands Liqun and Zhonghua consistently outsell other brands. In cosmetics, many international famous brands such as Estée Lauder, SKII, Lancôme and Clarins are popular in the Hangzhou market. Chinese female consumers have made a significant contribution to this category over the years and the outlook is positive.
The new terminal, T4, will include a retail area exceeding 40,000 square meters. Jea says the vision of the new terminal is to produce an “immersive passenger shopping experience in attractive surroundings, maximizing the retail potential while optimizing passenger circulation.” Duty free operators will be chosen in 2020 with the brief to bring retail stores that
In Japan, a popular airport with Chinese travelers is Central Japan International Airport, also known as Centrair. The airport, which opened in 2005, serves centrally located Nagoya, the third largest metropolitan area in the country. The airport hosted over 12 million travelers in 2018, half of whom were international. This year the airport is adding a second terminal to capitalize on the booming tourism driven in part by the growth of low cost airlines, particularly those from China. While Japanese nationals may make up the majority of passengers at Centrair, the biggest spenders in duty free are the Chinese, who account for 60% of sales. Within this group, the majority of purchasers, 60%, are women aged 30 to 49. However, an up-and-coming market is those aged 20-29 years old; this demo-
Heritage Shops.jpg Hangzhou International Airport T3 contains an area reserved for heritage stores which offer many historical and cultural products
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Airports in Asia
China Duty Free (CDF) has been the sole duty free retailer since the international terminal at Hangzhou International Airport commenced operations in 2010
graphic has just surpassed 5% of sales and is rapidly rising. After Japanese and Chinese travelers, the airport retailers are targeting travelers from Taiwan, Korea and Thailand. Current retail space is 11,000 square meters in Terminal 1 with 64 shops, 41 restaurants and 33 services. The topselling category is cosmetics and perfume at 40%, followed by cigarettes at 29%. Popular with the Chinese are Japanese brands of cosmetics and cigarettes. Duty free sales have grown 165% since 2005. Subhead: Increased capacity The new terminal, which opens this year, will have an annual traveler capacity of 4.5 million people, three million of which will be international passengers. The retail offer will include a wide assortment of duty free cosmetics, liquor, cigarettes, sweets, medical items, etc. Japan’s Centrair Airport hosts Ironmanbranded triathalons among its many events
42 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
Importantly, the building will be connected to the recently opened commercial complex known as the Flight of Dreams. This is a theme park based around an exhibition of the first ever Boeing 787. Surrounding the airplane, which resides
Masanao Tomozoe, President and CEO of Central Japan International Airport
inside the complex, are two distinct areas: The Seattle Terrace – so-called because Seattle is the birthplace of Boeing – where visitors can shop and eat, and The Flight Park, an interactive digital experiential area. Masanao Tomozoe, President and CEO of Central Japan International Airport, is confident that Centrair Airport will be recognized as a destination in its own right. The vision is to “make Centrair into much more than just an airport.” Many projects and initiatives with this goal are being implemented to drive passenger numbers. For example, as the area surrounding the airport is rich in samurai and ninja history, the airport introduced the Samurai Ninja Airport Project to promote the culture to international tourists. On the 22nd of each month and on other special occasions, ninjas are stationed in the airport to greet tourists, perform and provide information. Airport staff wear black-and-red ninja outfits, and passengers can try on ninja costumes and throw ninja weapons known as shuriken. Additionally, the airport offers the opportunity to have weddings, hosts an Ironman-branded triathlon and even has a sky pet hotel. With all this entertainment, a great retail offer and first-class customer service, it is no surprise that the airport has won SKYTRAX World Airport Awards “Best regional airport” for the past five years.
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Changi First Program
First responders Christian Dior brought in a one-of-a-kind Miss Dior Jaguar car at its pop up
Singapore’s Changi Airport’s retail environment is always exciting, thanks in part to innovative partnerships and initiatives. A key retail pillar is its ‘Changi First’ program, which enhances shopper experience and more importantly, drives sales
ingapore’s Changi Airport is renowned for its creative cuttingedge approach to retail; one of the ways Changi stays perennially relevant is with its “Changi First” pop-up program. Changi First encourages brand partners to bring in experiential global first products or exclusive launches to Changi Airport for up to a month before they are available anywhere else.
Success from the start
The dynamic program started in 2008 with the debut of an SK-II product “Signs Wrinkle Serum.” Over a decade later, the program has gone from strength to strength. Today there is at least one Changi First pop-up launching each month. Teo Chew Hoon, Group Senior Vice President Airside Concessions, comments: “The Changi First program is a key thrust that propels Changi Airport as the 44 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
first mover in the industry, and a reflection of how we continually innovate in the travel retail scene. Through this unique initiative, we bring to our passengers the latest product launches and the most exclusive experiences every time they fly through Changi, delighting even the most frequent flyers.” During 2018 the airport worked with 13 international premium brands to launch exclusive products and concepts. These brands included Chanel, SK-II, Prada, Shiseido, Giorgio Armani, Kiehl’s and Dior. While the pop-ups offer a chance for the shopper to get their hands on the latest highly coveted products ahead of everyone else, it also offers experiential zones with a variety of activities designed to increase passenger browsing time and create memories. Two standout Changi First pops-ups have been the Christian Dior launch of
Teo Chew Hoon, Group Senior Vice President Airside Concessions
the Miss Dior Eau De Parfum in 2017 and Shiseido Travel Retail pre-launch of its phase two Shiseido Ultimune 2.0 serum in 2018. Both garnered a huge amount of interest from passengers, media and influencers. For the Miss Dior Eau De Parfum launch, Dior brought the one-of-a-kind Miss Dior Jaguar car used in its advertising campaign into Terminal 1. This offered travelers the chance to feel as if they were starring in a Dior commercial, as well as enjoying a photo memento of themselves in the driver’s seat. Other activities included an interactive digital wall allowing visitors to snap a digital Polaroid selfie and a virtual reality experience in the Dior universe. With a campaign slogan of #StrongSouls, Shiseido’s pop-up had three inter-
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Changi First Program
active zones including a Wall of Strength for visitors to share handwritten messages, and a “Shake It, Snap It” area which allowed visitors to take selfie photos and GIFs using filters. Centrally positioned within the animation was the Beauty Bar, which offered travelers skin-immunity checks and consultations from Shiseido beauty consultants.
This year in April and May, passengers can experience the Johnnie Walker Game of Thrones pop-up, where the brand will launch its first-ever Game of Thrones outpost coinciding with the broadcast of the final season of the TV series. Interactive activities will include a photo opportunity with one of the three original thrones, a digital “Choose Your House” game and weekly surprises. Also launching is the Shiseido Sense Beauty Jewel Concept Exclusive outpost with a 360-degree photo booth that creates an avatar character of the passenger. With all these exclusives and more, 2019 is set to be an exciting year for visitors to Changi Airport.
Another Changi First was the travel retail launch of Elizabeth Arden White TeaWild Rose and Orchid Vanilla
46 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
With a campaign slogan of #StrongSouls, Shiseido’s pop-up had three interactive zones
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Lotte Duty Free
ast year, Lotte Duty Free’s (LDF) online store sales rose to KW2 trillion (US$1.76 billion), a 25% year-on-year increase. Compared to last year’s figures, its sales for the first quarter of this year is also up by around 37%. Based on LDF’s sales trend, its online store sales figure looks set to grow further. Speaking to Asia Duty Free Magazine exclusively, LDF shared that the growth of its online sales was more than twice that of its offline sales for the past three years. “Online sales growth for the last three years was 32% on average, which is way higher than offline sales growth at 15%. If we assume that it consistently continues to be on upward trajectory, it will exceed a 30% share of total sales after five years,” said LDF’s spokesperson. According to him, LDF’s CEO Lee Kap’s management philosophy of prioritizing customer satisfaction applies throughout the organization, including its online stores. Lee believes that customer satisfaction is the key to attract and retain customers, so it remains the company’s top priority for 2019.
Enhancing the customer experience
Over the years, LDF’s website and mobile app have been consistently recognized with a slew of awards. Last year, it took the first place in the Retail Division at the Mobile Award Korea 2018, the KIPFA Creative Special Award in Smart App Award Division and Mobile Web Marketing Award in Web Award Division at I-Awards Korea, just to name a few. LDF’s spokesperson attributed the online store’s success to the company’s continuous effort to provide industry-best services. For instance, since last September, LDF’s online store started supporting Traditional Chinese characters. Explaining the rationale for this move, the spokesperson said: “We believe that customLotte Duty Free’s online and mobile store attract millennials which form the bulk of its consumers
48 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
Lotte Duty Free’s spokesperson tells Asia Duty Free Magazine how its customer-first philosophy has helped increase the sales of its online store by ELENA OWYONG
Lotte Duty Free
Lotte Duty Free claims to be the only operator in the industry that supports four different languages for its online store – Chinese, Korean, English and Japanese
ers using Traditional Chinese characters, including those from Taiwan, Singapore, Hong Kong, and Macau will get to benefit from this update.” “Lotte Duty Free is the one and only operator in the industry who supports four different languages for its online store – Korean, English, Japanese, Chinese (both simplified and traditional characters),” he added. Additionally, LDF’s mobile store also provides real-time degree of congestion of the pick-up counters at Incheon Airport. There are four grades – very good, good, crowded, and very crowded. This helps customers to decide when is the best time to pick-up their purchases at the airport, thus improving their customer experience. Another improvement LDF made was to simplify the payment process at its mobile store last November. “There used to be three different steps to go through – passport information, departure information, and order status. We have combined them together, so it is now way faster and easier for customers to make a payment,” the spokesperson shared.
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Currently, the majority of LDF’s online store consumers are millennials in their twenties and thirties. This group accounts for more than half of its total sales. In terms of geographical location, LDF’s sales from Southeast Asian countries including Philippines, Hong Kong, Vietnam, and Thailand are booming. In order to market its online store to young consumers, LDF adopted a creative strategy by working with various industry partners. For instance, LDF is running an exclusive promotion with Market Kurly, which is one of the most popular online supermarkets among young Korean housewives. LDF also partnered with interior design information sharing platform Today’s House and online fashion retailer W Concept to offer exclusive coupons and discounts for those who use these marketplaces. These industry-leading companies are especially popular with the younger generation. Through these initiatives, LDF aims to maintain its reputation as a customer-centric retailer in an increasingly competitive online retail environment.
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AI at airports
The dawn of
intelligence Artificial Intelligence can help retailers and airports provide an enhanced customer service experience and improve efficiency for operational tasks. But what are the limits of its capabilities? by ELENA OWYONG
t the World Duty Free Stores Madrid-Barajas Airport’s Terminal 4, a friendly assistant greets customers cheerfully when they step in. His name is Pepper and he is no ordinary sales assistant. Standing at 120cm, Pepper’s body is made of a white, gleaming material. He also has a touchscreen on his chest. Pepper’s role in the store is to introduce passengers to the RED by Dufry loyalty
Through Pepper, Dufry aims to create a new customer experience at World Duty Free, providing consistent and complete information in a new and surprising way
program and invite them to register as members, using its integrated tablet. Dufry, the company that introduced Pepper to its stores for a short period of time in 2017, believes that Pepper has great potential as a promoter of the loyalty program because it speaks Spanish and English. Additionally, Pepper’s wifi-connectivity also allows travelers to register to the program directly. Dufry said that as Pepper is carrying out his duties, the assistant who accompanies Pepper can continue working on organizational and coordination tasks, where human skills are irreplaceable. Pepper is just one way in which AI is in the travel retail industry.
AI, a boon for retailers?
Travel retailer Dufry deployed Pepper the robot to its World Duty Free Stores at Madrid-Barajas Airport to introduce passengers to Dufry’s loyalty program
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The English Oxford Dictionary defines AI as “the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.” But how does this relate to retailers? And how can they use AI to support their business goals? A study released by IBM and the National Retail Federation (NRF) this year sheds light on this issue. The report, titled ‘The coming AI revolution in retail and consumer products’ surveyed 1,900 retail and consumer products leaders across 23 countries. It found that 85% of the global retail industry is preparing for intelligent automation within three years to improve worker and business performance. Aside from that, the report also highlighted six ways in which the retail industry plans to use AI – supply chain planning, demand forecasting, customer intelligence, marketing, advertising and campaign management, store operations and pricing and promotion. Commenting on the study, Luq Niazi, Global Managing Director, IBM Consumer Industries said in a press release: “The changing landscape across today’s retail and consumer industries
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AI at airports
has resulted in a rapid rise of emerging technologies, especially when it comes to Automation and Artificial Intelligence. Retail is one of the sectors to already implement and invest in cognitive and AI technologies, resulting in new and unexpected offerings for consumers and shoppers around the world.” National Retail Foundation (NRF) Vice-President of Research Development and Industry Analysis Mark Mathews notes that AI can give retailers an edge when competing with their rivals.
L’Oréal’s SkinConsultAI uses AI technology to detect skin aging issues and provide a personalized product routine to address customers’ priorities
“Retailers are increasingly using innovative technologies to offer new ways to shop both online and in-store and provide rewarding careers for employees. From reducing shipping costs and improving supply chain efficiency to personalizing shopping experiences and helping workers acquire new skills, AI technologies allow retailers to compete in the 21st century economy and better serve their customers. This is what the future of retail looks like,” he said.
Driving sales revenue
L’Oréal, the biggest beauty brand in the travel retail industry, has also jumped on the AI bandwagon when it acquired AI and Augmented Reality (AR) entity ModiFace last year. In February this year, the cosmetic powerhouse used ModiFace’s technology to launch digital skin diagnostic tool for the brand Vichy. Called SkinConsultAI, the tool offers women a tailor-made product routine. Customers can get their diagnosis when they take or upload their selfie on the brand’s website. L’Oréal’s technology will then detect seven aging signs such as under-eye wrinkles and a lack of firmness, and provide information on their personalized skin aging matrix, their skin strengths and priorities. Each woman will receive a tailor-made product routine to address her skin priorities. When the skin diagnostic service was rolled out, Lubomira Rochet, Chief Digital Officer of L’Oréal declared the company’s intention to use AI to transform their customers’ beauty experience. “With the acquisition of ModiFace, we have started a second phase of L’Oréal’s digital transformation, focused on reinventing the beauty experience through technologies such as voice, Augmented Reality (AR) and AI. We believe that services will be the new gateways for discovering our brands and
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products. After virtual make up try on, virtual hair colour try-on, online beauty consultations powered by AR, L’Oréal and ModiFace are proud to unveil the first skin care diagnostic authentically powered by AI and science.” L’Oréal’s efforts in introducing AI have also begun to bear fruit. Rochet noted in the company’s 2018 annual report that more than 20 ModiFace services have been used in 11 of the company’s brands in 16 countries. She revealed that this has shown “spectacular uplifts in consumer engagement and conversion rates.” “By equipping our websites, our points of sales, our apps, those services will create even more personalized relationships with our consumers and allow us to increasingly personalise our product recommendations and our products themselves,” she said. As seen from L’Oréal’s case, AI is a win-win situation for customers and retailers. In addition to offering customers a personalized solution that addresses their needs, retailers like L’Oréal can use it to predict inventory needs, as well as introduce and market their products, which in turn leads to greater revenue.
Beyond driving sales, AI also has the potential to reduce human errors and increase efficiency. Singapore’s Changi International Airport’s Terminal 4, for instance, is using AI technologies such as facial recognition to allow passengers to skip manned counters and use more self-service options at each stage. Aside from that, the terminal is also tapping on AI to collect wind and weather data, as well as landing direction to better predict flight arrival timings. All these technologies will greatly enhance the efficiency of border control procedures, improving the overall passengers experience at the same time.
Challenges of using AI
Despite the convenience and efficiency that AI offer, there are still some challenges to implement it. In an episode of the McKinsey podcast in 2018, McKinsey Global Institute chairman and director James Manyika emphasized that AI is still developing. “When we think about the limitations of AI, we have to keep in mind that this is still a very rapidly evolving set of techniques and technologies, so the science itself and the techniques themselves are still going through development,” he said. According to McKinsey Global Institute partner Michael Chui, another interviewee in the same podcast, one key limitation of AI is data labelling. Retailers need manpower to train the machine to interpret data meaningfully. Using the example of a public museum, Manyika said: “I know this large public museum where they get students to literally label pieces of art—that’s a cat, that’s a dog, that’s a tree, that’s a shadow. They just label these different pieces of art so that algorithms can then better understand them and be able to make predictions.” Additionally, there is also the issue of whether the algorithms used in the AI are transparent and if there is bias in the data or in the data collection method. In view of these issues, retailers need to think carefully before they jump onto the AI bandwagon.
Face off DUTY ZERO by cdf improves customer service experience with the first facial recognition payment in Hong Kong Airport by ELENA OWYONG
DUTY ZERO by cdf is the first Hong Kong merchant to launch the facial recognition payment
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iquor and tobacco duty-free store DUTY ZERO by cdf launched the first facial recognition payment in Hong Kong, at the Hong Kong International Airport (HKIA) to help the airport become a “smart airport”. The new technology aims to enhance the customer shopping experience for Mainland Chinese tourists. On April 2, 12 facial recognition devices called “Dragonfly POS device” were officially introduced at HKIA, with DUTY ZERO by cdf being the first Hong Kong merchant to launch the facial recognition payment. The device, around the size of an iPad, is placed next to the checkout counter. Customers will first input their phone number and then face the camera. The facial recognition process will complete the transaction in a few seconds.
According to CDF- Lagardère, many Mainland Chinese tourists who used this payment method are very impressed by the technology. DUTY ZERO by cdf is operated by CDF- Lagardère Company Limited, a partnership formed by China Duty Free Group and Lagardère Travel Retail. Explaining the rationale for introducing this new system, Kitty Lo, General Manager, Retail Experience of the AA, said, “To elevate our passenger’s airport experience, we have implemented different innovative technologies to develop HKIA into a smart airport. We have launched the “HKG My Flight” app, smart luggage tag “MyTAG” and the e-Security Gates using biometric technology, to name a few. In the future, we will continue to leverage different innovative technologies to provide passengers with a hassle-free shopping journey in the airport.” Devin Pun, General Manager of DUTY ZERO by cdf, said: “DUTY ZERO by cdf has been committed to bring visitors at the HKIA an advanced shopping experience since launch. To catch up with the high-tech era, we are also ready to be vanguard. Besides this partnership with Alipay, we have launched a pre-order mobile APP, which make us the first airport duty free store in Asia to be able to pre-order hard liquor through the APP. In the future, we will also actively explore more possibilities to become a pioneer in innovation and technology in the retail industry!” DUTY ZERO by cdf had collaborated with Alipay, the Airport Authority Hong Kong (AA) and China Duty Free Group (CDFG), CDF-Lagardère to introduce this new payment system.
The “Dragonfly POS device” is placed next to the checkout counter
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Future of duty free Asia Duty Free reached out to eight young professionals for their take on the industry and advice they’d like to give to their 25-year-old self
What advice would you give your 25-year old self?
How long have you been in the industry?
3. How would you describe the culture of the duty-free industry?
Rawan Elayyan, Brand Manager, Mazaya FZE 1. 3 years
2. I would change my work field more often to experience different industries. I worked in the consumer electronics field for 10 years. In my opinion it is better especially at a younger age to experience different fields of work. This will help the individual to be more informed and knowledgeable 3.The travel retail industry is a niche industry that is full of learning experiences on different levels and aspects of life. From a social point of view, it is the industry by which you meet new diverse people all the time. From a professional point of view, it is a fun industry yet highly competitive by which you need to be creative and up to date on all business matters. Everyone competes to capture the traveler’s interest and attention - keeping in mind the limited time that travelers usually spend in the shop. This makes it even more challenging for suppliers to leave the needed impression
Ashlee Park, PR & Marketing Assistant Manager Global Retail, Foreo Asia 1. 3 months
2. Be brave, don’t worry about the “perfect life”. There is no perfect way to live your life 3. I find that the duty-free industry is very dynamic since we are always tapping in on customer trends from all over the world. This is the most interesting factor of the industry for me.
Alex Cook, Co-Founder & Managing Director, FILTR 1. 15 years
2. Run your own race. Set your own pace. Try to bring as many people along with you as possible. Watch the calorie intake. Get more sleep. Relish the failures and move on quickly 3. At its best: energetic; creative; forward-thinking; and fresh. At its worst: tired; self-defeating; unimaginative; and spoilt
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How long have you been in the industry?
What advice would you give your 25-year old self?
How would you describe the culture of the duty-free industry?
Shi Ling TAN, Media & Digital Marketing Manager, Shiseido Travel Retail 1. 4 years
2. Experiment more, fail more and that’s when you learn the most 3. Highly influenced by the paradigm shift of tourism marketing, enabled by digital, technology and innovation potential
Helen Wong, Head of Global Travel Retail, Daniel Wellington 1. 8 years
2. Take every experience as a learning opportunity and don’t be afraid to take on new challenges. Stay dedicated, work hard and remain humble 3. Travel Retail is full of passionate individuals who are extremely dedicated in their work, fun loving, and always open and willing to help each other
Gautom Menon, Founder & Chief Brand Officer, Wild Tiger Rum 1. 3 years
2. This industry is all about relationships and partially innovation. It’s imperative to be seen, to be heard and most importantly to be relevant 3. Extremely vibrant people make it an addiction. But it’s rather slow to embrace innovation and change. As an industry we need to stay ahead of the curve at all times and this is something the trinity needs to come together, embrace and adapt sooner that later
Denz Vanderlist, Travel Retail Business Development 1. 6 years
2. Enjoy and work hard, travel retail is one of the best industries of the world. Respect and knowledge will get you further than you can imagine 3. It is a warm and engaging industry. And it is not only an industry of taking but definitely one of giving back too. As it is a niche market, learn and adapt and never to forget who got you where. Networking and events are definitely a key to success
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Spotlight On Exhibitors
Liviko shines spotlight on gin and travel retail exclusive liqueur Liviko, Estonia’s most renowned spirits business with a 120-year history, is set to focus delegate attention on Crafter’s Gins and Vana Tallinn travel retail exclusive products at this year’s TFWA Asia Pacific Exhibition in Singapore. Liviko welcomes TFWA Asia Pacific visitors with a new stand concept called House of Crafter´s which is inspired by the Nordics, the origins of the brands spirits. Delegates can sample the award-winning gins, witness the magical color changing effect of Crafter´s Aromatic Flower Gin and hear the latest brand news. Crafter´s London Dry Gin has only been available for two years on the shelves of Sydney to Copenhagen Airports and has already received a nomination by shoppers for the Travel Retail Awards. “We are also excited to share and present news of Vana Tallinn Coffee Fusion. The renowned liqueur brand also hails from Estonia and is proudly welcomed into the Liviko family,” shares Anna-Kai Tõrs, Liviko Export Marketing Manager. Vana Tallinn Coffee Fusion is the first travel retail exclusive, by Liviko. The new liqueur is inspired by a strong coffee culture in neighbouring domestic markets. The expression is a fine-tuned balance of Vana Tallinn liqueur and rich, distinctive
freshly roasted coffee beans. Rum and warm spices like cinnamon, vanilla and citrus peel native to Vana Tallin blend well with the deep coffee flavor. Vana Tallinn Coffee Fusion is best on its own or mixed with a coffee drink. The first batch of this novelty will be available in April 2019. Delegates are welcomed to visit Liviko at the TFWA Asia Pacific Exhibition at 2-J34. Liviko introduces travel retail exclusive Vana Tallinn Coffee Fusion inspired by coffee culture in neighboring regions
Diesel on the move in Singapore Diesel is exhibiting its travel-friendly JoggJeans at the TFWA Asia Pacific Exhibition in Singapore, the fifth year of participation for the Italian denim brand. The Diesel booth (Stand number: R15) showcases a dedicated product selection from the Summer 2019 collection, designed to meet the needs of people always on the move. The range on display spans jeans, clothing and accessories. Diesel’s mastery in the denim category is reflected by the
Diesel’s bold Summer 2019 collection features denim, leather and souvenir jackets as the key components
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category of JoggJeans, which are described as essential items for travelers. For the Summer collection, Diesel looks to Tokyo, Japan as its main influence. Summer’s aesthetic draws cues from rockabilly culture, and sets the look on the street-style packed neighborhoods of Shibuya and Shinjuku. The bold collection features denim, leather and souvenir jackets as the key components. Diesel’s famous denim is available in lightened washes and flanked by colorful accessories. One of the main seasonal patterns draws inspiration from Western bandanas and appears on skirts, dresses, shirts and shorts. Bits of neon strobe are incorporated on T-shirts and striking sneakers. On the Diesel booth during the Singapore fair, visitors will have the chance to discover the latest campaign, #MakeYourWayTheSuccessfulWay. In this campaign, Diesel aims to “fight back against societal norms and move away from the crowded masses: Diesel wants for its youthful followers to find their own truth, their own selves and their own definitions of success”. By empowering the youth to blaze their own trail, Diesel is shining a light for each person to follow their heart – and their own way. In keeping with the brand’s practice of breaking the rules, Diesel seeks to mesh sub-cultures with the mainstream. In this campaign, Diesel asked Instagram influencers familiar with Diesel’s sense of irony to be reflective and ironic about the clichés and pitfalls of living a “social shareable” life.
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Spotlight On Exhibitors
New Porsche Design models set to wow buyers Porsche Design, manufactured and distributed under license by Rodenstock, will be returning to the TFWA Asia Pacific exhibition this year with highlights from its Spring/Summer 2019 collection (Stand number: H10). This year, one lucky sunglasses buyer will be walking away with the limited-edition Glued Visor model. The Glued Visor P’8664 combines technological innovation and functional design, making use of an adhesive technique from the automobile industry in which a robot applies a high-tech adhesive to the titanium frame with the highest precision. Limited to 911 specimens worldwide, the P’8664 was awarded the German Design Award 2019 and is presented in an exclusive edition box with an elegant case. Retailing at €795 (US$900), Rodenstock is holding a draw for a pair of Glued Visor sunglasses during the Singapore show. The draw is exclusive to sunglass buyers who leave a business card at the Rodenstock stand. The draw will be made at 4pm on Wednesday, May 15. “We’re very excited to be returning to Singapore this year; it’s a great show in an amazing region where we are steadily building our business with Porsche Design’s men’s collection,” said Petra Eckhardt-Koestler, Rodenstock’s Head of Travel Retail.
“As passenger figures in the region grows – and with Asian travelers increasingly looking for iconic Western brands – we see a natural increase in demand for sunglasses. Porsche Design stands out because of its iconic status, superior quality, innovative design and impeccable styling – we have designs to suit all tastes and even offer Asian sizing.” Also highlighted on the stand will be the Porsche Design Classic P’8478 in Neomint – the Color of the Year – which combines functional design with high-quality materials. This new Neomint version is limited to 2,000 pieces worldwide.
One lucky sunglasses buyer at the TFWA Asia Pacific fair will be walking away with this limitededition Glued Visor model
Artisanal quality from Italy Available in branded stores around the globe, Italian brand Il Bisonte is entering the travel retail channel with a splash. Taking part in TFWA AP in Singapore for the first time, the company will be showing its new collection of bags and wallets, created specifically with the Asian traveler in mind. While the new collection stays true to the company’s casualchic aesthetic, the designs and colors are beautifully contemporary, with styles fully in line with current trends. Il Bisonte has been ahead of its time since its inception 50 years ago, always ensuring that every piece is made with the qualities so important to the traveling millennial shopper: allnatural materials and methods; sustainability; responsible, ethical sourcing; authentic, artisanal production; superior quality and timeless style. Made exclusively in Italy, every component of every item is sourced from within 30 kilometres of Il Bisonte headquarters in Florence, and every piece is made by Florentine and Tuscan artisans. The company is devoted to using only exceptional raw materials and production methods that are both ecologically sound and produce superior quality products. The vegetal tanning process, the use of vegetable dyes and the superior materials used all guarantee that every Il Bisonte piece will last a lifetime, the leather acquiring a uniquely beautiful patina through daily use and maturing in line with the person who uses it. Visit Il Bisonte and view the new collection in booth H23 Basement 2.
64 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
Every Il Bisonte piece is made by Florentine and Tuscan artisans
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Adding volume with Moroccanoil
Moroccanoil boasts two POS shop concepts in Seoul Incheon Airport
International beauty sensation Moroccanoil shows no signs of slowing down as it cultivates a new fan base in Asia Pacific
by JAS RYAT
oroccanoil continues to grow its travel retail presence since launching in the channel in 2016, with key full-size hair care products now carried at 90% of the world’s premium airport destinations. Asia Pacific continues to an integral part of Moroccanoil’s game plan as the region presents tremendous potential. The firm does not have distribution in mainland China, but based on the demand, Moroccanoil views Asia Pacific as an opportunity to service the People’s Republic of China, as it accounts for 40-50% of the duty free business in the region. As of Q1, four strategic channels of distribution within the Asia Pacific market have been established. Starting with Hong Kong International Airport (operated by Shilla) and Macau (Duty Free Americas), the company has two points of sales in each location. In Korea with Shinsegae, Moroccanoil has an additional POS at a downtown duty free location, and National Trading Company has two POS shop concepts in Seoul Incheon Airport. Singapore Changi Airport houses seven POS with Shilla. And finally in Japan, the firm works with managing agent Bluebell: KIX Duty Free and NAA Retailing (at Tokyo Narita, Tokyo Haneda, and Osaka airports). 66 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
The TFWA Asia Pacific Exhibition in Singapore will provide a platform for continuing conversations with King Power to discuss the next steps in partnership, distribution opportunities and timelines. Asia Duty Free spoke with John Gates, Moroccanoil Vice President, Retail and Travel Retail Sales, about the firm’s expansion strategy in the region. “Our 12- to 24-month strategy is to continue to build volume and brand expression through shop concepts, branded fixtures and consumer events within our current Asia Pacific distribution channels,” Gates explains. Moroccanoil is seeking new opportunities in Thailand, Indonesia and Malaysia with additional key POS in Hong Kong International Airport. Due to the continued demand for the brand and its multi-channel distribution strategy, Moroccanoil is now building a field sales team out of its Japan office. Moroccanoil has wide appeal internationally, but depending on the passenger profile in a given airport, the top four travel retail demographic groups are (not in order) Chinese, Russian, European (Scandinavia/Netherlands/UK), and American. “The Chinese passenger is very important to the brand, due to the density of the
population and the fact that we are not being sold in the local market,” explains Gates. “We’ve noticed that the Chinese customer is interested in experiencing cruise and continues to travel within the EU, Latin America and now the Middle East.” The firms feels the undeniable buying power of Chinese passengers will continue to be strong but will soften due to the government restrictions on the amount of goods that can be brought back into the country.
Planes, trains and automobiles
The future focus for the brand is to be available at most touchpoints when traveling, whether it’s in airports, downtown shops or railway stores. “We want to sustain continued growth and volumes in current points of sale and branded shop concepts in Seoul Incheon Airport in Korea,” says Gates. “We are keeping our eye on the evolution of the high-speed rail through mainland China and opportunities for commerce at the stations.” Moroccanoil’s footprint in travel retail has been revolutionized, as previously only the travel-size hair care collection and hair care travel kits were available for purchase. The full-size hair care collection was exclusively sold in professional salons. Moroccanoil’s team has successfully pursued duty free as a channel to deliver its product on an international level.
Shilla Duty Free
The Shilla Duty Free introduces its first SK-II travel exclusive set
ravel retailer The Shilla Duty Free has launched its first SK-II Shilla Travel Exclusive set. According to the company, the set consists of three of the brand’s “most revolutionary products” – SK-II Facial Treatment Essence (250ml), SK-II GenOptics Spot Essence (50ml), and SK-II Facial Treatment Mask (10pc). All three products in the set contain PITERA™, a natural by-product of yeast fermentation, discovered by SK-II scientists in the 1970s when they noticed the extraordinarily soft and youthful hands of sake brewers in Japan. The Shilla Duty Free said in a press release that PITERA™ “dramatically improves the skin’s natural surface rejuvenation process, working its magic to make beautiful skin a reality”.
The Shilla Duty Free plans to constantly reward customers with meaningful and unique travel experiences by partnering well-known brands such as SK-II for exclusive products
Commenting on the travel exclusive set, Young Hoon Kim, Executive Vice President of The Shilla Duty Free said: “Such partnerships with renowned brands match our aspirations as a leading travel retailer to constantly reward customers with attractive beauty offerings, creating meaningful and unique travel experiences.” The SK-II Shilla Travel Exclusive Set is available at The Shilla Duty Free’s retail stores in South Korea including online duty free, and other The Shilla Duty Free Asia Pacific stores in Singapore and Hong Kong. The new limited set is priced at US$387 in South Korea, S$503 in Singapore, and HK$3,140 in Hong Kong respectively.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Labo Labo, the skincare line for younger consumers, is Dr Shirono’s holistic daily pore care solution
skin by HIBAH NOOR
Beauty is more than skin deep for the leading skincare brands in Asia Pacific travel retail
eauty giant L’Oréal Travel Retail Asia Pacific has lifted the lid on the top three skincare trends in Asian travel retail for 2019. With the rise of upper-middle class, global shoppers, especially the increasingly sophisticated Chinese, premiumization, skincare iconization and men’s skincare are key trends for 2019. Chinese consumers, in particular, are seeking better ingredients, improved efficacy and are trading up to more premium lines or brands, along with extending their skincare repertoire.
Murad is a leader in the hydration product category with its Nutrient-Charged Water Gel
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L’Oréal Travel Retail Asia Pacific has a powerful portfolio of brands including luxury products that offer global shoppers the products they want, regardless of their beauty rituals, aspirations or purchasing power. “In travel retail, we have the edge to better connect with our global shoppers by leveraging our expertise in digital technologies and retailtainment to create excitement and bring value to them,” shares Iris Lam, Executive Business Director, Strategic Business Development, L’Oréal Travel Retail Asia Pacific. Skincare iconization is all about having a relevant star product in driving customer loyalty in the long run, Lam continues. One example is Lancôme Advanced Génifique known as “the little black bottle” for Chinese consumers. “You know your product is a success when consumers give it a nickname,” smiles Lam. Men represent a growing opportunity for skincare brands, especially in Asia, which is already ahead of other regions in male skincare. In Asia, to look youthful challenges the traditional standards of
male beauty. As men want to look better through skincare, they seek more varieties and benefits in male skincare products. “In travel retail, male shoppers demand efficiency; it is essential for our brands to be visible by creating newness and excitement so we can capture their attention in a limited time,” explains Lam. Product formulation transparency is vital, and it’s one of the ways L’Oréal shows respect for its customers to maintain trust and ensure the company remains the leader. L’Oréal recently launched a website dedicated to ingredients, Inside Our Products, on loreal.com. This site features information and articles on related topics such as product composition, its commitment to safety and quality, beauty apps, cosmetics regulation, and a glossary. Today, consumers no longer want to hide their skin problems – they want to treat the problem at its root. This aspiration has led to the boom in L’Oréal’s dermocosmetics brands, Vichy and La Roche Posay. A product like Mineral 89 by Vichy aims to fulfil these expectations by moisturizing the skin and protecting it from pollution.
JAPANESE MEDICAL BRANDS WOO TRAVELERS
Japan’s top medical cosmetics brands aim to build on major Asian domestic market momentum by targeting travel retail. Brand owner Ci:z Holdings Co Ltd is exhibiting at this year’s TFWA Asia Pacific exhibition for the first time as it looks to accelerate international growth by targeting Asia’s travel retail market. Following the company’s acquisition by Johnson & Johnson in January 2019, travel retail has been identified as a strategic channel to drive brand equity and sales growth for its two key brands – Dr. Ci:Labo and Labo Labo. Dr. Ci:Labo was founded in 1999 in Tokyo, where Dr Yoshinori Shirono, a pioneer in Japanese dermatological science and specialist in laser and anti-ageing skin treatments, ran a clinic. Dr Shirono set out to design products that unlock the skin’s full beauty potential. Dr Shirono worked with the women visiting his clinic to identify their skin concerns. He developed formulations with advanced technology and ingredients that work naturally. His quest for beautiful skin gave birth to the Dr. Ci:Labo brand’s signature Aqua-Collagen-Gel, which has sold tens of millions of units worldwide.
In terms of communication, L’Oréal utilizes advanced technology at point of sale. Products are sorted by theme to ensure smooth navigation. For example, the latest L’Oréal Paris Bangkok Downtown II space is sectioned into three areas: cosmetics, Revitalift red carpet zone and men’s skincare. The company’s beauty advisors aim to provide customer service with advanced technology. Vichy and La Roche Posay beauty advisors are equipped with a Derma Analyzer machine to diagnose a customer’s skin condition in less than five minutes. Digital makeup apps are also available for customers to try products quickly.
Labo Labo, the skincare line for younger consumers, launched in 2003. Labo Labo is Dr Shirono’s holistic daily pore care solution to tighten pores from within while controlling sebum production, energizing skin metabolism. Philippe Gueulet, International Director, Dr. Ci:Labo, commented: “After strong initial success expanding Dr. Ci:Labo internationally and now with a dedicated travel retail team in place, the timing is perfect to accelerate our growth by bringing this unique brand to a wider audience in Asia travel retail. “With momentum behind J-Beauty currently surging, and with our ability to leverage the scale and expertise of Johnson & Johnson, we are confident that through a partnership-led approach, we can help retailers unlock even more growth in this dynamic category.” Ellesha Kirby, Vice President Asia Skin Health, Johnson & Johnson Consumer Asia Pacific, added: “Travel retail is an incredibly powerful channel, offering unmatched potential for consumer engagement and brand building – particularly with Chinese beauty shoppers. Our investment in this channel is an important step as we look to reinforce the prestige credentials and brand equity of the Dr. Ci:Labo portfolio.”
“Murad is a brand that we believe will be of very high interest to Asia consumers,” says Rosalyn Frayna, Business Development & Marketing Manager, Unilever International Travel Retail. “Skincare is huge in Asia and with the ever-increasing demand for cruelty-free products, which are unavailable in the mainland China channels, we predict
that Murad will be highly successful and sought-after.” Murad’s expertise resides in the antiageing sector; its Retinol Youth Renewal Serum is the number one retinol product in the US (source: The NPD Group). Murad is also regarded as an industry leader in the acne, pigmentation and hydration product categories.
L’Oréal Travel Retail Asia Pacific has a powerful portfolio of brands including luxury products that offer global shoppers the products they want
Murad makes a move
Meanwhile, rival beauty giant Unilever International Travel Retail deems Murad as the must-have product range for Asia Pacific travel retail. At this year’s TFWA Asia Pacific show it will be highlighting Murad’s results-driven beauty products. Founded by dermatologist Howard (Dr) Murad in Los Angeles in 1989, Murad is considered to be the first modern doctor brand by providing groundbreaking skincare formulas that achieve significant results without surgery. The product portfolio addresses common skin concerns, and is suitable for every age, skin type and environment. Key categories include hydration, environmental shield, resurgence, technoceuticals, and acne control.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Bear-faced chic Spanish jewelry brand Tous is building its presence in Asia, where China and South Korea remain untapped markets by HIBAH NOOR
Tous has 110 points of sale in travel retail, after celebrating 41 new openings in 2018
ous, the family-owned Spanish jewelry brand known for its cute bear emblem, is exhibiting at the TFWA Asia Pacific show in Singapore and is starting to build more of a presence in travel retail. “Travel retail is a fairly new channel for the brand; we’re just at the start of our growth journey but showing positive signs: +30% growth in 2018 versus 2017,” says Sergi Tomas, International Retail Director for North America, Latin America & Asia at TOUS Jewelry. Today, Tous has 110 points of sale in travel retail – after celebrating 41 new openings in 2018 – with the US and Mexico as the brand’s strongest markets. The company has boutiques in major Mexican airports and five boutiques in Spain which are directly operated. It also has 20 travel retail exclusive products in the jewelry category and six travel retail exclusive leather goods items. “Our main travel retail markets are absolutely aligned with the brand strategy in the domestic market, and for this reason we have an important presence in Spain, Mexico, Puerto Rico, Colombia and Portugal,” he says.
A new global ad campaign
Tous is an affordable luxury fine jewelry brand for young, spirited women. Its
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travel retail sales have been growing every year, says Tomas. In an exciting development, American actress Emma Roberts has been revealed as the new Tous brand ambassador. The young actress, who has gained a huge following by starring in many movies, was chosen to represent the brand’s global image thanks to her ability to express emotions and her affinity with the company values. One of the brand’s key markets is Spain. Sales are improving year by year, and it remains the main market. Mexico is also “really important” for the brand, says Tomas. Tous has 702 stores and sales are growing internationally, which makes the company “really proud”. In the EMEA region, the brand is a key player, as well as in markets such as Russia, Poland, and the Ukraine. Tous is increasing its presence in the Middle East region, and is present in Saudi Arabia, Oman, and is celebrating new openings in Kuwait, Abu Dhabi and Bahrain. Tous is targeting growth in Latin American countries such as Colombia, Peru, Chile, Panama and Costa Rica as part of the global strategy (not just travel retail). In travel retail, the company is trying to gain awareness through advertising and sponsorship. “We are looking for good activations/pop-up opportunities with
retailers and flexible ideas for collaboration. And, of course, our new face of the brand Emma Roberts could help us increase brand awareness,” says Tomas. In Asia travel retail, China and South Korea have big potential for growth, being untapped markets. Tous is preparing to open new stores in mainland China this year so it is “really focused” on this market, reveals Tomas. The company plans to open more than 10 points of sale in 2019 in China and Korea.
Young actress Emma Roberts is the new Tous brand ambassador, thanks to her ability to express emotions
C L A I M
Y O U R
S T Y L E
A Caran d’Ache ballpoint pen to suit everyone’s style! Adventurous, pop, urban, bohemian or something more classic: Express your style with the six unique colour combinations in the Claim Your Style Collection. For creativity without bounds. Caran d’Ache, Swiss Made excellence since 1915.
Gaining a strong niche position in duty free has given Anthon Berg global recognition by JAS RYAT
Anthon Berg’s famous dark chocolate liquor bottles are filled with world renowned spirits
anish confectionery specialist Anthon Berg has stood the test of time since 1884. The ‘You can never be too generous’ chocolate brand proudly celebrates its 135 years with a strong foothold in the Nordics region and a prominent position in global duty free. Anthon Berg, falling under the umbrella of Toms Group A/S, is 100% owned by Gerda and Victor B. Strand’s Foundation. It is one of the world’s largest confectionery companies with strongholds in Scandinavian regions and Denmark. The company’s duty free presence began in 1955 with its premiere on home turf at Copenhagen Kastrup Airport. This was quickly followed by Stockholm and Oslo airports, and now Anthon Berg’s trademark pink color is recognized in airports from the Americas, the Middle East and all the way to Asia.
ity started in 1922 and has since developed strategically in line with industry demands. The liquor bottles contain the main global spirits, covering vodka, whisky, liqueur, rum, Cognac and tequila. The diverse selection aims to appeal to a broad audience on a global platform. Most recently, a line of Single Malt Scotch Whiskies was introduced during 2018’s TFWA World Exhibition in Cannes. The concept taps right into the global whisky trend by taking customers on a tasting
journey through Scotland’s legendary whisky regions: Speyside, the Highlands, the Islands and Islay. Primarily targeting male chocolate and spirits lovers, the chocolate brand seeks to underscore its message of quality versus quantity. Men and women 35 years and older that appreciate quality, travel regularly, consume chocolate for themselves or gifting all fall into the demographic Anthon Berg serves. Most recently, the company adapted its portfolio to attract the surge of travelers during the Chinese New Year celebrations. “The Chinese are very important because of their buying power and also because they want to have brands with a story and a quality that is acceptable. When we look at the numbers of Chinese, who are traveling, then we have a huge target group, and here we are working with information on the shelf for Chinese customers,” shares Peter Dige, Travel Retail Director. He continues: “We have made sleeve solutions for the Anthon Berg product, and that is really helping the brand. The sales have a great impact with this kind of sleeve. We know that they are looking for special products and here we have our Chocolate Liqueurs, Chocolate Coffee and Chocolate Cocktails in the bottle-shaped chocolate with different kinds of fillings. We have something unique for the Chinese.” Anthon Berg’s gifting versatility ensures ‘You can never be too generous’ for retailers and travelers alike.
All bottled up
Anthon Berg put itself on the map due to its famous marzipan-filled offerings. The brand has long been known for its high quality, proud craftsmanship and persistent fight for sustainable cocoa. The portfolio extends to marzipan bars, seasonal holiday offerings and traditional gift boxes. However, its hero product is the dark chocolate liquor bottle filled with some of the world’s most prestigious spirits brands. This spirits licensing activ72 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
Playing off the whisky trend, Anthon Berg recently released a line of Single Malt Scotch Whiskies
sport of chocolate by JAS RYAT
Ritter Sport’s Travel Retail collection is being customized to increase its customer base in Asia Pacific
When made in Germany is worth its weight in chocolate for the Asian traveler price points,” he explains. “The things we do know are that they like Ritter Sport because it’s a German brand and it’s family owned.”
Adjusting the flavor combinations Ritter Sport Choco Cubes offer smaller portions with an assortment of flavor in an easy to carry travel bag
sia offers promising growth for German chocolate brand Ritter Sport. The region has continued to show an uptick in sales; however, the brand is still focused on building a platform upon which it can foster the growth of both its presence and its supply chain. Asia Duty Free spoke to Ritter Sport’s Simone Weiss, International Key Account Manager Travel Retail, and Jan Pasold, Managing Director Global Travel Retail, to understand how the family-owned chocolate brand is adapting its offerings to capture the millions of travelers expected to travel through this region. Pasold, who has worked at Ritter Sport for two years, is quick to underscore that the brand is still on a learning curve in the Asian region. “Mainly when we speak about Asians we are speaking about Chinese people that purchase our products. We have taken steps to offer the Asian customer different products at different
Ritter Sport has been quick to adapt the brand’s offerings to its Asian customer by making the products more relevant and adjusting the portion sizes. “As we know that Asians like smaller portions and they have different consumption patterns when compared to the US or Europe – for example, they don’t consume a full bar of chocolate at once – we now offer the optimal assortment by having different sizes like the Choco Cubes and the Minis in many different flavors,” shares Weiss. “This offers different options. We also know that some Asians are buying gifts, while others are looking for small snacking portions.” Marzipan, although a delicacy in Europe, does not share the same celebratory reputation in Asia. Pasold explains that the flavor combinations have been adjusted to better suit the Asian palate. “We have taken marzipan out and changed the format and added strawberry yogurt in one of our TREX products” he said. The Minis package continues to be the best seller as it is colorful, perfect for
sharing and a good price point, according to Pasold. This option will soon be available with nut Minis as well. Ritter Sport will continue its focus on cocoa as the core of a new brand strategy, as it aims to anchor the variety and value of cocoa as a raw material more strongly in the consumer’s consciousness. The brand has also been active with its CacaoNica program in Nicaragua for almost 30 years, where it works closely with around 3,500 cocoa farmers. Although Asia holds huge potential, Pasold notes that the firm’s biggest challenge is the supply chain. “It is very challenging by just having one factory to get fresh quality product out in time. All of our packers are in Germany or Europe at the moment,” he explains. “At least to be closer to the market and to further engage with our customers to strengthen the relationship we possibly will have someone in the Asian region in the future that knows the market, understands the market and is able to react to the market,” he says. Overall, Ritter Sport Travel Retail is a year ahead of plan and a team strictly dedicated to travel retail is growing. Pasold and Weiss are “happy” with what they have accomplished and what lies ahead. Ritter Sport’s product selection has become more relevant and streamlined to make stronger strides in duty free.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Eu Yan Sang
Alive and well in travel retail Traditional Chinese medicine specialist Eu Yan Sang is leveraging its expertise in health and wellness to target the travel retail channel by HIBAH NOOR
u Yan Sang has been at the forefront of modernizing traditional Chinese medicine ever since its establishment in 1879. The company has decoded Asia’s best-kept health secrets and made them available to a wider audience, beyond its loyal Chinese consumer base, to become a leading health and wellness company in Asia. Having served over five generations of consumers, Eu Yan Sang has become a trusted brand for high quality traditional Chinese medicine, health supplements and wellness products. “We have a rich heritage leveraging on the wisdom of traditional Chinese medicine, which we combine with modern science and technology to drive innovation and the development of unique products and services,” says Tonya Tan, General Manager, Group Business Development, Eu Yan Sang International. The company has been operating in travel retail for a number of years, and today it operates four stores at Singapore Changi Airport and two stores at Hong Kong International Airport, and has an inflight retail presence on major airlines in Asia Pacific, including Singapore Airlines and Hong Kong Airlines. The new travel retail exclusive range, which will launch to the trade at TFWA Asia Pacific, consists of three new segments developed specially for the channel with exclusive packaging: Gift of Health, featuring Raw Bird’s Nest, Cordyceps and Ginseng products, which are described as perfect for gifting; Travel Wellness, featuring Lingzhi and Cordyceps capsules, Essence of Chicken and Bird’s Nest drinks, which provide immune support and alleviates fatigue while traveling; and Soup Apothecary, where consumers can mix and match from eight different herbal soup sets. In total, the travel retail exclusive range consists of 27 best-selling
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opportunities presented by the emerging health and wellness category.” The company’s products are natural herbal remedies and dietary supplements, with a long history steeped in traditional Chinese medicine wisdom. For example, its bird’s nest drinks are also known as the ‘caviar of the East’ and the secret to antiageing and beauty care, and have been around since the Tang Dynasty, 1,500 years ago. “We have ambitions for our products Tonya Tan, to become the cornerstone of any health Group Business and wellness offer in travel retail, particuDevelopment General Manager, larly in Asia Pacific and locations where Eu Yan Sang there are high Chinese tourist numbers,” International says Tan. Tan explains that the health and wellness category is all about self-care, something that is increasingly becoming a central theme in people’s lives. This theme is also translating into the way people products, most of which are presented in travel – as more consumers become a convenient, ready-to-drink format. health conscious, the number of wellness trips that people have taken and their Opportunities in the expenditure has increased over the years. wellness category According to the Global Wellness Insti“We are excited to be part of TFWA Asia tute, wellness tourism generated US$639 Pacific for the first time, showing our new billion in 2017, and Asia has been the fasttravel retail exclusive range,” says Tan. est-growing region in both the number of “The show is important for us to estabwellness tourism trips and expenditure. lish relationships with new retailers and “We expect this trend to grow faster in the landlords, as well as further strengthening years to come, as it lies at the convergence existing ones. We are looking forward to of two thriving industries: the US$2.6 working with partners who are open to trillion tourism industry and the US$4.2 collaborating with us to maximize the trillion wellness market,” says Tan.
Eu Yan Sang’s Bird’s Nest Jewel drink provides immune support and alleviates fatigue while traveling
CRAFTED WITH 100 % RESPONSIBLE COCOA
Perfetti Van Melle
Perfetti Van Melle’s backpacks perform very well in the Asian market, shown here in elephant form
A must-have assortment
Perfetti Van Melle is focusing on innovation and driving distribution for sustainable growth in the Asian region
s we move into 2019, Femke van Veen, Brand Manager Global Travel Retail at Perfetti Van Melle, is very clear about the confectionery firm’s strategic focus in the Asian market. The key objective is to maximize its presence at airports and let the sugar confectionery category grow and gain fair share as this is currently highly dominated by chocolate. In Asia travel retail, the company’s top seller is its iconic MegaChups product range, while the lollipop-filled backpacks also perform very well in the Asian market. Besides these best-sellers, Perfetti Van Melle also sees a continued demand for lower priced items such as its Mini Mentos Pencil Case and the Chupa Chups Crazy Plane. Also, in line with the company’s strategic focus on optimizing the cash till assortment, Perfetti Van Melle is experiencing growth for its Mentos Gum range in the Asian market, with its Juice Burst Yellow and Bubble Gum flavors performing especially well. “We know that 82% of shoppers expect confectionery at the cash
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till,” says van Veen. “A mix of sweets and candies, chocolate, water and refreshment is recommended, and chewing gum is the number one cash till category, with 58% of shoppers expecting it there. This will continue to be a part of our focus strategy for the coming years.”
sible ingredients and have a wide range of products, so consumers are able to choose what the best option for them is. As for travel retail, we believe that giving transparency on ingredients, focus on portion snacking for kids and creating gifting products with a reusable purpose (such as our backpacks or Mix of Mini Travel Kit) is our focus and currently the best way forward.”Perfetti Van Melle sees more opportunities than challenges in Asia, according to van Veen. As the company’s core strategy remains the distribution of its best-selling items, this is the focus for the Asian market as well. “We identified growth opportunities to focus on for the coming year and currently we are outperforming the sugar confectionery category and growing at a stable rate. This is mainly driven by our key products. For the South East Asia market, despite a bit of a slowdown with the Chinese travelers in Q4 2018, we are seeing good returns in the business, especially in Bangkok and Cebu – while the uptick in travelers in Haitang Bay and Macau has contributed to our business in China.” The main challenge is the potential uncertainty ahead due to the political tension between China and the US, “but we believe we have taken the right steps to move the business forward in a sustainable manner”, she says. “We recently had some high-profile promotions in Bangkok and Malaysia, which are part of our growth plan for the Asia Pacific region this year.”
Creating reusable items
Innovation is a top priority for Perfetti Van Melle. Every year the company introduces a new Limited Edition MegaChup. This year it launched the Memphis Design MegaChup – a limited-edition giant chup consisting of 15 fruit-flavored lollipops – at the Summit of the Americas in March, and buyers will be able to see this designthemed product in Singapore. Van Veen acknowledges the growing trend of travelers looking for healthier snacking options. “Of course, this is a very relevant trend to monitor, not only in travel retail. As a sugar confectionery company we are always very transparent on the ingredients of our products and never devaluate our quality. We continuously make changes to use the best pos-
The Memphis Design MegaChup – a limited-edition giant chup consisting of 15 fruit-flavored lollipops – can be seen at the TFWA Asia Pacific show
At the TFWA Asia Pacific show in Singapore, Patchi will be showcasing its travel retail portfolio, in addition to pre-packed gifting lines from its retail boutiques
A gift to savor Having climbed to the top of Dubai Duty Free’s chocolate sales rankings, Dubai-based supplier Patchi is going places in travel retail
trendsetter since 1974, and a chocolate gifting specialist, Patchi is a premium brand with a distinctive heritage, established in over 20 countries around the globe, including North America, Europe, North Africa and Asia Pacific. The Chairman and Founder is Mr Nizar Choucair, who pioneered the introduction of a new gifting concept in Lebanon over 45 years ago and expanded rapidly across the Middle East and the world. Striding in his father’s footsteps, CEO Mr Oussama Choucair has a bold vision to expand the travel retail division into new horizons. Fast forward to 2003, when Patchi launched its first travel retail collection in Dubai Duty Free. Since then, it has ranked among the operator’s top chocolate brands. This year, Patchi reached number one at Dubai Duty Free, among over 150 chocolate and confectionery brands, a record-breaking accomplishment which marks the brand’s determination to strengthen its travel retail presence, having already gained major market share as a premium chocolatier in the region.
Well-established retail network
Patchi Travel Retail has a major presence at Dubai Duty Free, which it describes as a key player that supported the brand and the business from the start. Today, Patchi has a well-established network of over 214 boutiques in 21 countries across the world. It currently has a presence in the UAE, Lebanon, Thailand, and soon in Moscow duty free. Today, the company is in talks to expand across Asia and Europe. Patchi has a selection of travel retail exclusive products and will be launching new lines with Gebr Heinemann in Moscow and with Lagardere in Abu Dhabi. “We frequently introduce new seasonal skus including Chinese New Year, Mother’s Day, Easter, Christmas, Ramadan, Diwali and others to ensure we always have a wide selection for travelers,” says Patchi’s Head of Travel Retail, Sharbel Barhoush. “We also carry in our travel retail portfolio destination boxes adapted for the different cities we are in, which are one of the best performing skus.” At the upcoming TFWA Asia Pacific show in Singapore – the brand’s debut travel retail trade fair – the company will be showcasing its travel retail portfolio, in addition to a wider selection of pre-
Sharbel Barhoush, Patchi’s Head of Travel Retail
packed lines from its retail boutiques, including the Patchino line targeting younger travelers. Barhoush commented: “We are very proud and excited to be part of this year’s Asia Pacific Exhibition & Conference, to preview our travel retail collection and other exclusive products.” Barhoush will certainly be busy over the next year. “The travel retail sector is a growing business for us, and we currently have a presence in the UAE, Lebanon, Thailand, and soon in Moscow duty free, and we are in talk for new expansion in Asia Pacific, India and Europe. “We are very excited about our new expansion in the travel retail sector, and we are confident of the potential yet to unravel in this growing market, especially with our unique offerings,” he enthuses.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
There is a pen for every personality in the new Claim Your Style collection by Caran d’Ache
Caran d’Ache pens excellence by JAS RYAT
aran d’Ache, a name derived from ‘karandash’ meaning pencil in Russian, is celebrating the 50th anniversary of the brand’s signature ballpoint pen. Founded in Geneva in 1915 as the Fabrique Genevoise de Crayons, Caran d’Ache adopted its current name in 1924. To celebrate this commemorative event, Caran d’Ache is unveiling the limited-edition Claim Your Style collection. For the first time, the company is releasing six pens with colored finishes, designed for the next generation of design aficionados. The Claim Your Style collection presents six limited-edition models, enabling customers to choose their own Caran d’Ache pen according to their personal style and individuality. The pens will be offered in a range 78 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
of customized finishes and a variety of colors: ultramarine with blue flexible clip and green button, turquoise with gold flexible clip and pink button, pink with pink flexible clip and pink button, nude with green flexible clip and copper button, khaki with copper flexible clip and blue button, and finally grey with blue flexible clip and black matte button. The natural hue of the nude pen, decorated with green and copper, seeks to appeal to bohemian types, while creative souls with minimalist aesthetics may be drawn to the grey pen with its toned finish, or perhaps even the bold khaki model with a copper clip and blue button. Fashionistas can choose between the vivid pink pen and the pop of color from the turquoise, fuchsia and gold model. The ocean-inspired ultramarine pen with
a deep blue clip and green button offers a worldly option. By combining an original color palette with unique matte textured finishes, the Claim Your Style collection is expected to gain a cult following. Recognized by its hexagonal shape, the 849 ballpoint pen has established itself as a standout writing instrument which meets the requirements of the Swiss Made label by being entirely designed and created in workshops in Geneva. The pen comes with a Goliath ink cartridge, which lasts for 600 A4 sheets, guaranteeing the reliability needed from a writing instrument. The Claim Your Style collection seeks to prove that Caran d’Ache’s ballpoint pen is a timeless emblem of this traditional Maison.
William Grant & Sons
William Grant spirits up a storm This summer William Grant & Sons will be launching an exciting, innovative gin called Hendrick’s Midsummer Solstice
illiam Grant & Sons (WGS) is privileged to have the opportunity to nurture fantastic brands such as Glenfiddich, The Balvenie, Hendrick’s and Monkey Shoulder in its portfolio. That’s the proud opinion of Matthew Williams, Regional Director Asia Pacific Global Travel Retail, William Grant & Sons. With the Asia Pacific Region contributing to a very significant share of the total Global Travel Retail business for WGS, it is paramount that the region gets it right, and looking at their 2018 performance, it looks to be the case. The Glenfiddich Cask Collection remains the backbone of the brand in travel retail, and the Glenfiddich Aged Range continues to perform extremely well, delivering strong double-digit growth versus the previous year in Asia Pacific. The Balvenie, keeping true its handcrafted credentials, continues to be highly sought after by consumers, and is delivering very strong year-on-year returns to the business. Monkey Shoulder has been growing “exponentially” in the last few years and continues on that strong trajectory going into 2019. Hendrick’s remains a star in the super-
UK-based spirits category leader William Grant & Sons is an Asia Pacific success story, so what’s the recipe?
premium gin category, despite it being crowded with many new entrants, also delivering a strong double-digit growth in 2018.
More to come in 2019
This year, WGS is revealing an exciting launch for Glenfiddich, which is expected to elevate the brand to the next level, casting a halo around the already successful Glenfiddich Aged range. On Hendrick’s, the brand is all set to once again bring something unusual to the gin category this summer when it will be launching an exciting innovation in the form of the Hendrick’s Midsummer Solstice. “With the introduction of this limited edition in a unique floral take on the Hendrick’s house style, we are confident the brand will grow from strength to strength,” says Williams. The UK-based company’s turnover climbed from just over £1 billion (US$1.3 billion) in 2016 to almost £1.2 billion (US$1.6 billion) in 2018. “While it is important to keep close to trends,” Williams explains, “it is by asking ourselves simple questions such as ‘how do we continue to delight our consumers? How are we different? What is next?’ that
we constantly challenge ourselves to raise the bar and be in the position to meet the demands of single malt drinkers, and ride on the momentum of the burgeoning cocktail scene across the region.” The Glenfiddich Experimental Series, particularly Glenfiddich Winter Storm 21yo, did very well in Asia. Williams puts its success down, firstly, to the liquid, which he says tastes exceptional. “Fuelled by the rarity of it, the product literally created a storm not just with our consumers, but retailers alike, who unfortunately couldn’t get as much of the product as they would like. There simply wasn’t enough of it to go around,” says Williams. Ed Cottrell, Managing Director, Global Travel Retail, William Grant & Sons notes that the Asia Pacific region continues to evolve and premiumize, and the challenge is how the company continuously seeks to understand and excite its consumers, innovate not only on products and packaging, but also on how it presents itself to consumers to stay as the category leader. “We have and will continue to place huge emphasis and focus on resourcing ourselves, and developing sound, robust plans to take the business to the next level,” he concludes. www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Vodka takes a shot at Asia
Poliakov vodka is ready to mirror success garnered in France and share it in the East
by JAS RYAT
Vodka is showing its strength in Asia Pacific, a region where premium brown spirits are traditionally celebrated
Beluga has created its Traveling Series that offers customized packaging to capture local markets in Asia
80 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
sia Pacific accounts for over 60% of the global population, making it the largest spirits market in the world. However, in a region where premium brown spirits reign supreme, vodka is quickly gaining foothold in a promising market. And super-premium vodkas are now in high spirits. Asia Duty Free magazine spoke to vodka experts Ekaterina Smekhunova, Beluga Head of Travel Retail, Ruslan Grigoryev, Ladoga Group Export Director, and Constance Descamps, La Martiniquaise International Senior Brand Manager, to understand how they plan to conquer a region dominated by cask finishes, aged expressions and premium blends. Premium Russian brand Beluga vodka accords much of its presence in Asia duty free markets to successful brand building in the domestic markets. This success in local domestic markets is mirrored in duty free sales. Says Smekhunova: “Beluga is the number one brand on the domestic market in Vietnam with market share of more than 45% in the super-premium segment. The second market where we had a sales breakthrough since 2017 is India.” The premium vodka brand is an international superstar, being present in over 80 countries globally. Beluga vodka generated 9% of its sales in 2019 in the Asia Pacific region. This underscores the fact that although there is a demand for super-premium vodka, there is still a major opportunity for growth. Grigoryev emphasizes that Asia Pacific offers promising potential, as Ladoga’s export share in the region hit 14% in 2018.
Poliakov vodka will focus on activations and education to take its vodka to the next level
The brand, known for its intricate Imperial Collection Faberge range, fits into the premium segment with ease. “This is especially true of the Japanese market, where the consumer is interested in luxury and superior quality,” shares Grigoryev. “We see tremendous opportunity in the premium and super-premium segment, offering much smaller quantities than other export markets but quite a large turnover.” Descamps, representing Poliakov vodka, describes Asia Pacific as a “conquest area” for the brand, as it has a smaller presence. Poliakov has a 37% market share in France and is looking to replicate this success globally. Descamps maintains that vodka’s development in Asia Pacific, economic stabilization of the countries and the growing cocktail culture will all contribute to maintaining growth in the region. “We saw almost 50% growth in 2018, and our biggest country in Asia is Taiwan, where the brand is number two on the market (source: IWSR 2018). I’m confident in vodka’s development in the region,” she enthuses. “The objectives for Poliakov in Asia are to anchor the brand in the latest markets and make it indispensable in its key countries through promotions, digital investments and local activations,” explains Descamps.
A thing of beauty
Ladoga Group’s Imperial Collection Faberge Vodka plays directly into the luxury experience Asians are looking for
Asia is the third-largest market for super-premium and ultrapremium vodka, accounting for 14% of the market. Beluga vodka is taking this opportunity to capitalize on customizing packaging for travelers during holidays and celebrations. Most recently, a limitededition Chinese New Year and a Happy Diwali series were made available in select airports as part of the brand’s Traveling Series. “We have an absolutely individual approach to each client and country. We are creating new packages and exclusive skus. We are increasing our visibility in travel retail and on-trade channels,” explains Smekhunova. Grigoryev stresses the importance of product quality and packaging. Ladoga Group’s Imperial Collection Faberge Vodka, one of the most expensive in the world, is housed in a signature egg-shaped presentation case decorated with 24-carat gold gilding and colored crystals. Each case contains a 75cl decanter of Imperial Collection vodka with four glasses, made of Venetian glass. Eye-catching, high-end bottle design, as well as an attractive, prestigious-looking gift pack, win exclusivity points in the market. “Very often vodka is purchased not for consumption but as a distinguished gift. These major characteristics and factors become even more important in broadening the online sales channel,” explains Grigoryev. “We actively participate in the main regional exhibitions and events, presenting Ladoga’s flagship vodka Imperial Gold and Czars Original to promote the brand, teach the local people about vodka drinking culture, and to expand our partner network, thus increasing our presence in the region.”
A natural fit
Not only does vodka, a colorless and odorless spirit, lend itself to cocktail culture, but in most cases it is also in line with the low-sugar and gluten-free trend. Descamps and Grigoryev both highlight that vodka is a popular base for cocktails and popular mixes, emphasizing vodka’s importance in this drinking culture. Asia Pacific accounts for over half of all spirits consumed globally, and vodka brands are taking note. Vodka suppliers are looking to duplicate the success they have experienced in the West with clear spirits and bring it to the East. By expanding on this growth, and customizing their products and activations to the region’s needs, vodka just may turn its ripple effect into a full-on wave in the clear spirits category. www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Distell’s Bunnahabhain 39yo whisky has become a front runner in Asia
Distell relishes growth in Asia by JAS RYAT
Distell reveals how it moved from the sidelines to become a premier player in the duty free game
istell, a name synonymous with Amarula Cream Liqueur, now boasts a whisky portfolio that has built strong momentum in Asia based on the traction that Bunnahabhain continues to gain in the company’s core markets of Hong Kong, Singapore and Australia. In the past 12 months, Bunnahabhain listings at Hong Kong International
Luke Maga, Distell Global Travel Retail Managing Director notes that Distell is committed to a long term relationship with China to see fruition of the company’s aspiration
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Airport have increased from just two skus to include Bunnahabhain Cruach Mhona, Eirigh Na Greine, An Cladach, 1980 Canasta Cask, 25yo, 40yo, 46yo, and an Asia Pacific-exclusive 1997 Palo Cortado Cask Finish. “We’ve grown our presence with DFS at Singapore Changi Airport, going from three Bunnahabhain skus to seven, and we’ve also just launched a worldwideexclusive Bunnahabhain 39yo at the DFS Masters of Wines & Spirits event in Singapore,” says Luke Maga, Distell Global Travel Retail Managing Director. Amarula Cream Liqueur continues to be key in the Australian market and will prove to be strategically important for the brand in the Asia Pacific region. “We recently launched our three Travel Retail Exclusive Bunnahabhain releases – Cruach Mhona, Eirigh Na Greine, An Cladach – in Australia as well as Deanston 10yo Bordeaux cask, which will be a key focus for us within our whisky portfolio,” explains Maga.
Mile a minute
Travel and tourism in China are growing at a rapid pace, so what does this mean for Distell? Asia Pacific is critically important for Distell and a major growth market based on population alone, specifically in the PRC, and the affluence in the region. Distell’s flagship brand Amarula has enjoyed double-digit growth for the past two years in Asia. Currently, the Asia Pacific region accounts for approximately 10% of Distell’s duty free and travel retail business, in volume terms. Looking forward, Asia travel retail will be a major channel to recruit new consumers to its brands, both in travel retail and domestic markets. “Distell’s expansion plans have been heavily focused on getting our route to market sorted in our key markets – Hong Kong, Singapore, Australia. As a result of this, we have been able to secure a number of new listings across the wine, whisky and liqueur categories with a few different retailers. The focus continues to be on strengthening distribution in our core markets,” shares Maga. “Our strategic
travel trail is about driving the presence of our wine throughout Southeast Asia and China. It is important that we seed these markets, investing in them to ensure benefits are reaped by consumers, retail partners and airports.”
Onward and upward
Distell’s next challenge will be to develop its Greater China travel retail business as the area shows promising potential. The firm is in the process of finalising its route to market, which will offer it a seamless introduction into mainland China’s travel retail market in mid-2019. “We are also working hard throughout the domestic market to grow awareness in China. As everyone knows, China is a difficult market where your aspirations need to take a long-term view,” says Maga. The recent listings of Distell’s whisky range have strengthened the company’s commitment to travel retail as it moves from being a fringe player to a recognized supplier across the region and globe. Wines continue to be a front-runner for the firm as demand in the region grows. “We are also pleasantly surprised with the performance of our travel retail-
exclusive Nederburg Private Collection of wine in DFS Singapore Changi. Sales of our wine in Changi Arrivals and Departures have exceeded our expectations and we are now looking at further building our wine business throughout the region,” enthuses Maga. The Nederburg Private Collection is performing well above expectations, he adds. As a result of this success story, five new wine skus have been listed with Duty Zero in Hong Kong International Airport, and Durbanville Hills Tangram and Collectors Reserve will be launched as a part of the expanded offer. Another clear highlight is Bunnahabhain’s second inclusion in DFS’s Masters of Wines & Spirits product offer, which shows that Distell is recognized as a serious player in the ever-competitive whisky category and able to offer compelling bottlings in the super-premium and luxury space.
What lies ahead
South Africans and Singaporeans are the main nationalities purchasing Distell wines in Asia Pacific. However, findings show that new consumers are attracted
daily and the firm is gradually seeing new nationalities grow in importance. Maga explains: “PRC passengers are vitally important to Distell as we look at growing and expanding our business. For example, at Cape Town International Airport, people from the PRC are the second-biggest consumers of Amarula products.” It is important to recognize the role influencers and bloggers now play in Chinese society when reaching millennials. Maga explains that these influencers are the rock stars of today and have massive followings, so as a company it’s crucial to engage with these groups to ensure Distell remains relevant and top of mind with that customer profile. Maga reflects that although Chinese millennials are an important customer demographic, they don’t represent the future. “They will shape the next demographic that will follow after them, but all companies, Distell included, must be prepared for what is coming as we move into a new world of technology. This will not only change our industry but will change the world as we know it today,” he concludes.
The Nederburg Private Collection continues to perform well as the demand for wine grows in Asia Pacific
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Wine tourism pays dividends for Diverse Flavours Tourism to South Africa is rapidly growing among the wine-loving Chinese, and Groot Constantia Estate is reaping the rewards by JAS RYAT
hinese outbound travelers are finding substantial opportunity in the continent of Africa, specifically South Africa. Over 100,000 Chinese travelers visit South Africa every year for business or vacation, only strengthening the ties between the two countries. Anthony Budd, Managing Director of spirits and wine distributor Diverse Flavours, sees this as the perfect opportunity for his South African wine, as reports indicate that China is looking to become the second-biggest wine consumer after the US in 2021, reaching a value of US$23 billion. In particular, Groot Constantia, a 334-year-old wine estate in the Constantia Valley, South Africa, has become a permanent fixture on the Chinese traveling itinerary over the years. The winery has become a national monument and a living working museum for travelers to enjoy, and is one of the world’s longest surviving trademarks today. Groot Constantia Estate, named after the Latin word for constancy or steadfastness, was originally granted to
Groot Constantia will soon be available in most duty frees in Asia Pacific as well as business and first class on prestigious airlines
Commander Simon van der Stel, the first Governor of the Cape, by the Dutch East Indian Company. The 763 hectares went on to produce wines from the estate that garnered the attention of people across the globe, eventually exporting wines to the US as early as 1774. A Mediterranean climate, combined with vineyards on a high elevation, produce 400,000 bottles of wine every year. Chinese travelers flock to this historically rich tourist attraction to enjoy the experience, their love for sweet wines and also to buy gifts to take home, giving the wine global exposure. With its history, its awareness in Europe and the US, and its growing presence in Asia, Groot Constantia is on track to become a major South African wine brand in duty free. The classic, award-winning red wines, along with the beautifully packaged Grand Constance sweet wine, will be the driving force for establishing a strong and growing presence for South African wines in global duty free. The wines are renowned, respected, classic, high quality,
Groot Constantia Estate offers a portfolio of wines that garners the attention of the Asian traveler
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award-winning, historical and in demand. The estate celebrates its 334th year with many awards and accolades. Groot Constantia’s wine portfolio has received over 100 awards in the past decade. Among the highlights: in 2018 its wines won seven Double Platinum awards at the prestigious Top 100 South African Wines awards and in 2015 Grand Constance wine achieved a Gold Award at the 2018 Monde Selection International Wine Contest. Jean Naude the CEO of Groot Constantia commented: “It would be ideal to receive all our clients on the Estate. This is however not always possible and therefore we are grateful for the services provided by the Duty Free Industry in spreading our products to all traveling clients across the globe. Having our Groot Constantia Shiraz on ANA (All Nippon Airways) in First Class, and the many retail shop listings is really raising the profile of the brand in the best possible luxury settings”. Looking ahead to a bright future, Groot Constantia wines will one day be available in all duty free shops from Dubai to Hong Kong, from London to Singapore, from New York to Beijing, from Bangkok to Shanghai, from Tokyo to Seoul, and being poured in First and Business Class onboard the world’s best airlines. Diverse Flavours will be exhibiting the Groot Constantia wines during the TFWA Singapore show at stand D34, along with their entire portfolio of Estate wines from Avondale, Cederberg, Deetlefs, Delaire Graff, Ernie Els, Kleinood, Mt. Vernon, Napier and 88 Vineyards. In addition they will have their Japanese Sake range’s which are also making a great impact in duty free. Contact Anthony at firstname.lastname@example.org
InnoTRI delivers for the curious connoisseur InnoTRI offers a full-service approach to local and international brands alike by JAS RYAT InnoTRI introduced the craft rum Cihuatán Nahual to Asia Pacific as it makes the perfect purchase for travelers looking to add something bespoke to their collection
iami-based InnoTRI will be attending the TFWA Asia Pacific exhibition in Singapore to excite buyers, operators and the traveling consumer about its product portfolio and services. InnoTRI stands for Innovation Travel Retail International and was founded by Christoph Henkel and Steffen Brandt in December 2016. The company aims to bring innovative retail concepts, brands – unique, award-winning and Floridian craft spirits – as well as business models into travel retail. The firm’s focus encompasses North, Central and South America, including the Caribbean. Most recently the company expanded its activities and product listings to Europe and Asia. Asia Duty Free spoke with Christoph Henkel, InnoTRI Co-Founder & Manager, about the firm’s ambitions in duty free. “Our business and operational approach is of a boutique style with the highest standards. We are dedicated to our customers and brand partners to deliver customized solutions for all aspects of the travel retail business, from planning and sourcing to supply as well as category management and brand building.” InnoTRI plans on introducing the craft rum Cihuatán Nahual in Singapore. The rum hails from Licorera Cihuatán, a craft distillery based in the Cihuatán Valley, El Salvador.
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InnoTRI offers a turn-key service, addressing tailor-made solutions in the field of travel retail consulting, from full tender support like shop planning, category management and design to outsourcing of purchasing and logistics. The duo also specializes in the exclusive distribution of its curated portfolio. “Our unique portfolio, where we do have exclusive distribution, consists of local Floridian and American craft spirits from Miami and Crestview and a variety of international craft spirits and niche brands,” explains Henkel. “Strategically we also decided to partner with a highend perfume brand Lengling from Germany, which fits perfect into our boutique approach.” The firm is looking to capture the curious connoisseur of fine spirits or unique alternatives that likes to travel to the South Florida area and explore the Caribbean via cruise ships or short flights from one of the many hubs in Florida. “Furthermore, we have an established distribution platform in Miami, Florida for distribution of the core assortment within liquor, tobacco and confectionery in the Americas,” explains Henkel.
Mystic Mayan rum
El Salvador’s first rum, Cihuatán, will be highlighted during InnoTRI’s visit to the Singapore exhibition. The craft rum is made at the Licorera Cihuatán distillery,
which produces rums and controls the entire productive chain. Cihuatán Nahual is the brand’s first blend, showcasing a selection of rums from its private reserves. Only 10,000 bottles of Nahual were released to select global markets, and more than 60% of this coveted edition has already sold out. In the second half of 2019, Cihuatán will unveil a new, limited-edition rum, with an initial global release of only 17,000 bottles. Cihuatán Rum will be exclusively distributed by InnoTRI Limited outside of El Salvador in the global travel retail channel. InnoTRI is excited to share the rum on a global stage. Says Henkel: “From our experience the Asian and Gulf region appreciate true heritage, extremely high quality and a level of exclusivity and veracity that most of the newcomers cannot deliver.” Going forward, the firm will concentrate on expansion and dedication to grow its portfolio by adding innovative brands and products. InnoTRI’s success at the Summit of the Americas show in Orlando reconfirms the global interest in the first international and local Floridian craft portfolio, he says. “We will be 100% dedicated not only to support our brand partners to grow, but also make sure that the retail partners feel the same support on a store level to make each and every listing a success,” concludes Henkel.
Fashion inspiration by HIBAH NOOR
The Corset Lipstick format offers more compact packaging, unique for women in its size, and in a more contemporary design
Cigarette supplier KT International is on a constant mission to innovate, as highlighted in a refreshing revamp of its best-selling brands
nspired by the world`s fashion houses and following the launch of the award-winning, world-first Shellpack, this Season Corset is presenting a new design in both flat pack and Lipstick formats. With clear, minimalistic shapes, the new-look range has been crafted to match the taste and style of adult consumers around the world. Developed with contemporary, urban colors, the new Corset is designed to showcase not only its design, but the women who smoke it, reports the company. The series includes five pack formats: Mauve, Pink, Menthol and the latest additions to the range, Corset One and Corset Pulse (single menthol capsule). Corset is now sold in over 50 countries and on four continents. Since 1947, KT International’s The King brand has evolved with the changing needs of consumers around the world, and this year promises to be the most transformational year yet. March 2019 saw The King core Original flavor evolving to a new contemporary design that remains true to its roots in offering the consumer modernity and international quality at an accessible price.
Maintaining the brand’s core principles while leading in design and style, The King has further evolved, launching two new ranges: The King Carbon Core with 88 ASIA DUTY FREE & TRAVEL RETAILING MAY 2019
an activated charcoal filter for a smoother smoking experience; and The King Compact, a modern, compact format delivering genuine King taste. In addition to the two new ranges, The King has announced the upgrade of The King Centrio, dubbed by KT International “the most progressive King ever”. Using technology beyond the Core, it delivers the most refined and smooth King taste experience yet with its tube Centrio filtration system to enhance its signature blend. Thanks to constant change and frequent innovation, and an emphasis on quality, The King brand has grown in Europe for the past few years – success that is now being replicated around the world. Speaking exclusively to Asia Duty Free, Stuart Buchanan, Global Marketing Director, KT International, explains what all these changes mean for the company. “In 2017, Corset launched the world-first Shellpack, which remains the only brand in the world with this format. On the back of this success, we have now upgraded our flat pack and Lipstick formats. In a design inspired by the world of fashion, the Lipstick pack offers more compact packaging, unique for women in its size, and in a more contemporary design.” Turning to current trends in cigarette smoking, Buchanan notes that the driver of the company’s international growth has been the philosophy of giving adult
The freshly redesigned pack for Corset Blueberry Blush Menthol Glaze has a clear, minimalistic shape
consumers the correct balance between International quality, design and price. “It is our belief that this is becoming the overriding driver for many adult smokers worldwide,” he says. As the company continues to expand its global footprint, Buchanan has noticed a change recently in operators wanting new innovation and new brands from newer manufacturers in the industry like KT International In 2018, KT International started replicating its success in Europe with an expansion into Asia, Africa, and the Middle East. This remains a key part of its plans for 2019. “We have already seen a positive response to our brand and portfolio approach as our brands are adopted on new continents and countries,” enthuses Buchanan.
winning ways Kavalan Whisky is gaining a foothold on its home turf and beyond by JAS RYAT
n estimated 95 million passengers travel through Beijing Capital International Airport every year, with 45 million traveling through China’s third-busiest facility, Guangzhou Baiyun. This presents an opportune environment for Taiwanese whisky brand Kavalan to capture the 40% of duty free/ travel retail business the firm accounts for in the Asia Pacific region. Kavalan has extended its footprint in Asian travel retail through its partnership with China Duty Free since 2017. The Chinese market is crucial for Kavalan Whisky as its airports host a huge influx of passengers every year. Selected single malt expressions from Kavalan have recently been made available in Beijing Capital International Airport and Guangzhou Baiyun International Airport. Kavalan’s core range continues to be listed in Delhi Duty Free shops at Indira Gandhi International Airport, and its
whiskies are available inflight with Cathay Pacific Airways, Philippine Airlines and AirAsia. Currently available in 125 duty free stores across 12 Asian countries, including China, Vietnam, Singapore, Thailand, Australia, Indonesia, India, and Malaysia, Kavalan shows no signs of slowing down. Asia Duty Free spoke to Derek Chiang, Kavalan Global Business Development, about the importance of the Asia Pacific region for the brand’s growth. “The Asia Pacific region is a very important market for Kavalan. Statistics indicate that the Asia Pacific region is the largest spirits market in the world, accounting for over half of all spirits consumed,” Chiang enthuses. Kavalan sees duty free/travel retail as a developing market, offering the potential to expand with influential travel retail partners. According to the Airports Council International Annual Airport Traffic Forecasts 2018-2040, global traffic will grow at an annual rate of 4.1%, reaching 20.9 billion by 2040. The duty free/travel retail market offers an effective platform to promote Kavalan’s whisky to worldwide customers that have limited knowledge of the brand’s products. “We have been happy with the global travel retail exclusive approach to help build our premium brand image,” says Chiang. He continues: “We focus on China airport duty free and the untapped Southeast Asia duty free markets such as Sri Lanka, Indonesia and Myanmar. In addition, Australia, New Zealand and India are also the key duty free markets where we would like to see growth in Kavalan’s duty free sales.”
A decorated whisky Kavalan Whisky continues to earn shelf space on duty free shelves in Asia Pacific
Kavalan recently added to its awards by winning at the Malt
Airport activations capture new and existing customers for the celebrated whisky brand
Maniacs Awards. Two of its whiskies were named “supreme winners”: Kavalan Solist Port Cask and Solist Sherry Cask. In another first, Kavalan Chairman Mr. Tien Tsai Lee and CEO Mr. Yu-Ting Lee are the first in all Mandarin-speaking countries and the first father and son to be inducted into the World Whiskies Awards’ Hall of Fame. This year, Kavalan Distillery’s Itineraries were awarded Highly Commended in the Global Drinks Tourism Challenge. In Drinks International’s 2019 Annual Brand Report, Kavalan also proved a strong favorite in both the Best Selling and Top Trending world whisky categories. Fans of Kavalan reach across the globe as the whisky trend travels the world. Recent awards have supported growth in both its domestic and export sales. Taiwan remains the biggest market for the firm, followed closely by Europe. The innovations keep flowing out of the pipelines with an exclusive Kavalan Distillery Select expression for Duty Zero at Hong Kong International Airport, and another one for Dufry at Hong Kong West Kowloon Station. A Kavalan limitededition set will soon be available at Hong Kong Airport during the May Day holiday to ensure its offerings stay competitive year round. www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
All about Alex Cook,
Co-Founder & Managing Director, FILTR Where were you born and raised? I was born in Watford, to the northwest of London, and grew up in strange combination of Worcestershire, Athens and North Yorkshire. What motivates you in life? Is it too cliché to say my family? I have three wonderful children (Isla, Jake and Leo) and they make me want to be the best version of me. I also feel a lot of responsibility for the FILTR tribe and their families. We’re a close team and I want them all to be successful. What’s the best thing that’s happened to you this year/month/week? The FILTR team has grown to 23 people strong this year. We’ve made very good progress and are delivering a lot of high-quality projects all over the world, week-in week-out. What would you choose as your last meal? From my days living in Greece, I don’t think you can beat a Greek taverna feast. Horiatiki, tzatziki, taramasalata, gemista, gyros, fresh octopus from the Aegean Sea and countless other hellenic culinary delights, washed down with a cold beer. What’s your favorite ’90s jam and why? Wonderwall by Oasis. Timeless and never fails to get the room belting it out. How would you rate your memory? Variable… My long-term retention is good, but short-term it’s too often a case of complete a task and move on. I don’t think I’m alone in that characteristic. The pace of business life today is extreme.
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What were you like in high school? Competitive and hard-working. I had a sports scholarship at high school, so naturally sport was a very important part of my life back then (and still is today). I translate a lot of the values that I learned from sport into all aspects of my life – discipline, motivation, teamwork – I think that’s the recipe for success. What do you think about when you’re alone in your car? Living and working in the centre of Singapore, I don’t really need a car. However, frequent taxis to/from Changi Airport give me an opportunity to unwind, focus my thoughts or catch up with my team if we’re traveling together – some of our best conversations happen in the back of a taxi! What is your favorite place to vacation? My wonderful partner Maria is from Mexico and I’m always amazed by the culture, food, hospitality and diversity of this huge country. What do you work toward in your free time? I work towards really switching off from the day-to-day, which is sometimes easier said than done, but spending time with the family and watching sports on TV are my keys to relaxing. What in the world would you most like to change? It would be great to have more than 24 hours in a day.
What about yourself would you most like to change? The ability to slow down… I think that probably goes hand in hand with wanting more than 24 hours in a day. I’m always thinking about what’s next for FILTR and what more we can do for our clients. What is something about you that most people would find surprising? I have played international rugby for Singapore and scored a try with my first touch of the ball on my first cap against the Philippines in Manila. If you had the opportunity to meet one person you haven’t met, who would it be, why, and what would you talk about? Teresa May. I would love to know what’s really going on with Brexit. I actually feel sorry for her, with all the squabbling, jostling and non-sense in the process. Although the country of millions voted in favor of Brexit, it seems like a few hundred MPs are making a complex situation worse.