Operator News: Alfarag Addis Ababa
The operator has seen a 15% increase in sales over last year, with average customer spend currently hovering between US$50 and $80
Back to basics
Alfarag Addis Ababa focuses on staff training and product mix to discourage downtrading and keep high-end products foremost in the minds of passengers ust as operators have been affected by the economic downturn in any number of ways, there are also numerous avenues toward combating the decrease in customer spend, from running large-scale promotions and investing in advertising to renovating or changing product mix. Alfarag Addis Ababa Duty Free, located in Ethiopia, has gotten back to basics by concentrating on staff training and ensuring the correct product mix this year, and as a result the operator has seen a significant sales increase over 2009. The company operates two stores measuring 600-square-meters and 470-square meters in Addis Ababa Airport’s departures area. The stores carry a range of high-end brands in a number of categories such as confectionery products (e.g., Nestlé, Mars, Ferrero, Goldkenn, Toblerone); tobacco (e.g., Philip Morris, JTI, Imperial Tobacco, Villiger); watches (e.g., Rado, Tissot, Longines, Calvin Klein, Cartier); writing instruments (e.g., Montblanc, Parker, Waterman); cosmetics and perfumes (e.g., Christian Dior, Chanel, YSL, Givenchy, Kenzo, Paco Rabanne and premium L’Oreal brands such as Lancome, Giorgio Armani, Cacharel, Diesel, Guy Laroche and more); sunglasses (e.g., Ray-Ban, Oakley, YSL, Guess, Giorgio Armani, Bvlgari); luggage from Samsonite; electronics (e.g., Sony, Panasonic, Nokia, Canon); jewelry (e.g., Swarovski, Calvin
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Klein) and sports clothing and accessories With so many high-end products in the stores, downtrading may have been a serious issue this year. However, the passenger make up at Addis Ababa Airport includes a number of demographics that have traditionally been seen as ready to buy if given the proper attention. “We have many Chinese and Indian passengers coming through our stores,” says Anwar Farag, Managing Director at Alfarag Addis Ababa. “Of course, as Ethiopia is the hub for Ethiopian Airlines flights flying from all across Africa to the rest of the world, we have a significant portion of travelers from West Africa followed by passages from East and Central Africa.” The purchasing power of Chinese travelers is legendary, and the upper middle class of India has emerged as a segment of the world’s population that also has disposable income to spend when traveling. As a result, Alfarag Addis Ababa has concentrated on training staff to ensure that the virtues of all the products in the stores are properly communicated to passengers. The operator has seen great success in categories that often suffer the worst from downtrading during recession. “Cosmetics and perfumes is our number one selling category, and within that Christian Dior, Chanel and the L’Oriel range of products are the top sellers,” says Farag. Despite the recession, Alfarag Addis Ababa Duty Free’s top selling categories include P&C and electronics, in addition to confectionery and tobacco
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GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010
BY
RYAN WHITE
Quite remarkably, electronics is tied for third place in sales with confectionery, a fitting testament to both the purchasing power of Alfarag Addis Ababa’s customers and the operator’s concentration on going above and beyond when it comes to staff training. Sony, Canon and Nikon cameras, as well as Nokia mobile phones are particularly popular items in the category. In addition to the above products, Farag notes that passengers are also consistently buying high-end watches and sunglasses. The results speak for themselves. The operator has seen a 15% increase in sales over last year. The product mix also seems to be suited perfectly to the clientele; while duty free customers are traditionally viewed as pressed for time, passengers that enter Alfarag Addis Ababa’s stores generally spend 20 to 30 minutes inside. As one would expect given the high-end products the store offers, average customer spend is relatively high, currently hovering between US$50 and $80. Despite Alfarag Addis Ababa’s success so far this year, Farag is quick to point out that the increased sales are actually the end result of efforts from various parties. Indeed, as has been proven time and again in travel retail, cooperation between operators, airport authorities and even governmental bodies is key to the continued growth of the industry. “The government has made an extensive effort to support this business category, and this goes hand in hand with the work being done by the Ethiopian Airport Authority and Ethiopian Airlines to increase the number of passengers flying through the airport,” Farag explains. “Given the cooperative effort that is being put into growing the tourism industry, the future of the Ethiopian duty free—and of course Alfarag c Addis Ababa—certainly is bright.”