BIG FIVE DUTY FREE
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BIG FIVE DUTY FREE
The Runaway Choice for
World Class Duty-Free PRODUCTION: William Denstone
Big Five Duty Free’s array of products can be found exclusively at three of South Africa’s largest international airports: O.R Tambo, Cape Town and King Shaka. Savvy consumers have embraced its unprecedented array of world-class jewellery, liquor, toys and clothing, and with air travel booming and low-cost airlines becoming ever-more prevalent, the possibilities could be sky-high for this South African retail institution. www.enterprise-africa.net / 3
INDUSTRY FOCUS: RETAIL
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Perhaps the last remaining option for prices to beat even the internet, duty-free shopping remains an integral part of any international trip. No longer merely an exercise in killing time at departures, the value and quality on offer makes it a serious retail endeavour, and while goods being available to buy without either import duty or VAT is a major draw, the Airports Company of South Africa (ACSA) explains that there is more to it than just questions of cost. “The value proposition that dutyfree also offers is that certain products and sizes or volumes are different to those sold in premium stores at normal shopping malls,” the organisation explains. “For example, alcohol at a duty-free store would be sold in one-litre bottles, compared to 750ml at a normal premium store.” In the lucrative South African airport commerce market, Big Five Duty Free is known as one of its true forefathers, as explains one half of the
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Big Five husband-and-wife management team Chris Harilaou. “The business was originally established by Marina’s father,” he offers, “who started it at grass roots level at a time when duty free simply wasn’t present in South Africa. It’s fair to say that he was the pioneer of the duty free business here, helping to construct its foundations in the country’s airports and setting it up to grow into the industry we have today.” This gap in the market was seen some 45 years ago through observing what was taking place all over the world and turned out to be quite the spot, since which Big Five Duty Free has never looked back. Today the company is run by three partners, with a staff compliment totalling around 450 and branches in all of ACSA’s international airports.
LEADERS, NOT FOLLOWERS With an ever-growing arsenal of cosmetics, jewellery, fragrances and wine, as well as ample choice for younger flyers, it is no stretch to say that the duty-free trip has become a staple part of the South African flying experience. This has not come about by chance, however - only through Big Five’s commitment to continually evolving itself and its product offerings has it been able to keep this fairly occasional consumer experience to remain an event to be anticipated, and, most importantly, worthy of spending hard-earned Rand on. “We see the duty free environment as similar to a fashion brand,” explains Chris Harilaou, “in that we believe it is essential to keep strong foundations
// WE HAVE TO KEEP UP WITH THE DIFFERENT MARKETS AND NICHE PRODUCTS WHICH ARE EVOLVING ON A YEARLY BASIS //
INDUSTRY FOCUS: RETAIL
to the brand, but equally important to keep changing and providing something innovative, new and exciting for the consumer. We have to keep up with the different markets and niche products which are evolving on a yearly basis.” Renovations to its stores at Johannesburg’s O.R Tambo and Cape Town airports in recent years quickly paid dividends for Big Five Duty Free, with a double-digit sales increase in business following the work. Chris Harilaou told The Business in Johannesburg the rationale behind the large-scale improvements: “Our existing main shop in O.R. Tambo was about seven years old which is a long time in duty free. We have put in newer brands and newer product sections. “We decided to do a whole renovation as it has created more convenient shopping. Our renovated store has an international feel, but we also display a lot of South African liquor. The shop renovation was a challenge as the location was planned as an F&B area overlooking the runway and not as a shop. We have brought the overhead lighting down to a new level to lighten the store, while our display units and the range of products are larger.”
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Embracing innovation recently brought about another important initiative for South Africans travelling abroad and wishing to streamline their pre-flight purchasing. With the 18.43 million eCommerce users currently active in South Africa, a total predicted to be bolstered by a further 6.36 million users shopping online by 2021, it made perfect sense for Big Five Duty Free to create a state-of-the-art e-commerce portal to finally take duty-free shopping online. Available at South Africa’s O.R Tambo International Airport, the development has allowed passengers departing internationally to make their duty free purchases before even arriving for their flight, and collect them before boarding the plane. ACSA summed up at the time: “Having seen all the beautiful products on offer in Big Five Duty Free, it’s likely you’ll want to make the most of this unique shopping opportunity, but you probably won’t want to carry your purchases with you on your trip abroad,” the organisation pointed out. “Now, you don’t have to. If you are flying out of and returning to O.R Tambo International Airport, simply buy on departure at Big Five Duty Free,
and when you return from your travels, your purchases will be ready and waiting for you at the Big Five store in international arrivals on your return. It couldn’t be easier to make the most of duty-free shopping.” AIR TRAVEL TAKING OFF IN AFRICA The South African air travel and transportation industries have had their fair share of troubles when it comes to the start-up and failure of various low cost carriers in the country. This was arguably at its worst during the period from 2012 to 2014, when the budget airline market was characterised by a host of false starts as well as legal and regulatory woes, and the dominance of the market by existing South African Airlines such as SAA, Mango Airlines and Comair. The four-year period between 2014 and the present have been hugely significant for the low-cost air travel space, though, and in 2018 a number of low-cost carriers are operating in full swing in South Africa, among them Mango Airlines (a division of SAA), FlySafair, FastJet and SA Express. Competition is now rife and South African travellers are presented with a wealth of options to
BIG FIVE DUTY FREE
// WE WANT TO PROVIDE AN A-GRADE SHOPPING ENVIRONMENT THAT’S AS COMPETITIVE AS ANY OTHER DUTY FREE OPERATOR WORLDWIDE // cover a growing number of routes. This trend is also true of Africa on a much larger scale, where skies are becoming busier as new airlines take to the air and intra-African routes are diversified to meet a burgeoning need of safe, reliable travel. Already in excess of 100 airlines operate across Africa, with more to come imminently. “The International Air Transport Association [IATA] has identified that the top 10 fastest growing aviation economies over the next 20 years will all be in Africa,” says Tim Harris, CEO of Wesgro, the development agency of the Western Cape Province in South Africa. “Better air connectivity has boosted trade in goods and services as well as tourism.” IATA forecasts that passenger numbers in Africa will grow by nearly 6% per annum, and by 2036 will see an extra 274 million customers each year to make for a total market of some 400 million passengers.
BUCKING THE TRENDS It is no mean feat for Big Five Duty Free to continue to rack up such impressive figures amid bleak retail sales figures for the rest of the country. Data released this month by Statistics South Africa showed that retail sales growth slowed from 1.9% year on year in May to just 0.7% in June, a much weaker performance than the 2.2% market consensus. Marina Harilaou gave some insight into what keeps Big Five Duty Free in such good shape. “In order to keep people coming back we offer value for money and are as competitive as possible,” she begins, “alongside a range of promotions which are in effect on a continuous basis in the shops. We do extensive marketing and place a real priority on service to our clientele - we have a lot of repeat customers, particularly on the business side, which has seen our strike rate increase in the airport itself year on year. “We are showing double digit growth in an economy where passenger growth is single digit at the moment. While it’s
not always easy in these economic times, we are constantly looking to offer our customers the best possible deal. “As South Africans we are facing our own challenges, not least in the fluctuating nature of the currency at present,” she recognises, “however we have tried to grow a business within the duty free market that’s recognised as a brand across South Africa and sub-Saharan Africa. We welcome our African visitors who in turn spend a lot of money with us, and we strive to look after them, and as a result they recognise the brand. “They know they will receive genuine products at competitive prices, and with the highest level of customer service. That’s really been our main focus and driving influence: to provide an A-grade shopping environment that’s as competitive as any other duty free operator worldwide.”
WWW. DUTYFREESHOPPING.CO.ZA
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Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU T. +44 (0) 20 8123 7859 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. Š CMB Media Group Ltd 2018
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SEPT EMBER 2018