Asia Duty Free & Travel Retailing TFAP May 2015 by Paramount Publishing Ltd.

TFWA AP 2015

Asia Duty Free _ NEW_ok.indd 2

DUTYFREEMAGAZINE.CA MAY 2015 · TFWA AP · VOL 19 · NO 2

10/04/15 13:46

Changi breaks records p. 14 China Duty Free stays ahead p. 26 Prestige Supplies expands p. 40

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1935-2015 For 80 years, La vie est belle with Lanc么me Founded by the visionary and pioneer Armand Petitjean in 1935, Lanc么me is celebrating 80 years of beauty in 2015. An opportunity to celebrate the women who inspire the brand, from its customers to its ambassadresses, and to affirm all year long through a series of joyful initiatives that indeed, life is beautiful with Lanc么me.

What are 80 years? What does it mean to celebrate eight decades of beauty, scientific innovations, exceptional fragrances, skincare and makeup products, of joyful celebration of femininity that is always true to itself yet is ceaselessly being reinvented? This is the question that Lancôme wished to answer on the anniversary of its creation. Looking back in order to move forward even more successfully, for a House is first and foremost a story that inspires the future and shapes what lies ahead. Lancôme’s story began in 1935 with the vision of a man ahead of his time, Armand Petitjean: a beauty that is French, therefore free and – as a result – happy. Beauty that lightens and strengthens. The beauty of being oneself. Happy beauty. “Lancôme is an incredibly dynamic House that has been continuously reinventing itself for 80 years while upholding the values and vision of its founder Armand Petitjean,” states Françoise Lehmann, Lancôme International General Manager. During its almost 80 years of success, Lancôme has become the # 1 brand in the women selective cosmetics market by offering unique and complementary skin care, make-up and perfume in more than 130 countries with 20,000 beauty advisers in as many points of sale relaying a message of French excellence. Today more than ever, ultra-femininity, French excellence, joiede-vivre, happiness and beauty are at the very heart of Lancôme’s DNA. A spirit that asserts itself through one ambition which is that every woman who comes to Lancôme to be more beautiful leaves happier. Because Lancôme affirms that happiness is the most attractive form of beauty. Lancôme is a pioneering brand and visionary ahead of its time.

Armand Petitjean’s vision, which we have honoured for 80 years, is a powerful science that caters to women’s real desires… This makes the brand intrinsically modern and proves its avantgarde approach.” Life is beautiful in colour: the colours of the legendary L’Absolu Rouge lipstick or the Hypnôse eye palettes… Life is beautiful with fragrance, from Trésor’s leather-infused peachrose composition to the wonderfully tasty iris of La vie est belle, the heirs of a line of exceptional perfumes that have marked the history of femininity and won awards since the 1935 Brussels World’s Fair. Life is beautiful with delicious sensations, those provided by skincare at the cutting edge of scientific innovation, skincare products that have become must-haves, such as Advanced Génifique and Absolue l’Extrait. Life is beautiful like the exceptional know-how by which the House perpetuates a certain idea of French luxury. Last but not least, life is beautiful just like the Lancôme ambassadresses, who radiate a beauty that is confident, distinctive and always free. Women who leave their mark on their age, whether Isabella Rosselini, the original epitome of Lancôme femininity for generations of women up to the present day, or Penélope Cruz, Kate Winslet, Julia Roberts, Lupita Nyong’o, Lily Collins and Alma Jodorowsky, who allow the brand to shine around the world. Women who are accessible,

free, committed, who cultivate their happiness as a way of life, seriously yet lightheartedly, inspired and inspiring in equal measure. “All Lancôme muses are “beautiful people” states Françoise Lehmann. They are role models who embody something more powerful than superficial beauty. They represent young women who take action and do things, women who are not just pretty to look at. It is very important that young women, who are in the midst of building their identity, have role models who are not superficial figures. Our muses are exceptional women who, like Lancôme, believe that beauty should be celebrated and not dictated. They believe that happiness is the most seductive form of beauty and that every woman has the right to it. In this way, they are very inspiring for other women.” adds Françoise Lehmann. What could be more natural for the brand with the rose than to cultivate happiness? And what more fitting way to approach its birthday than as an invitation to savour the beauty of life to the full throughout a year filled with surprises? Beginning with an irresistibly imaginative film – a Lancôme first – revealed on 20 February 2015, the anniversary of the day on which the House was founded. (http://youtu.be/lpsgyRPFr4s) A summary of all that Lancôme is in a surrealist style with a thoroughly modern glamour. Joy already, in colour and movement. Another highlight is a coffee-table book of the kind that you will want

to keep and look at time and again, published by Editions du Regard and available in a selection of bookshops around the world as of March. A story of happiness, of course, written with an elegant pen by the French author Stéphane Guibourgé. The story of a House whose ambition has always been to offer women the freedom to flourish. The story, too, of the French woman, cultivating her happiness as a way of life, always standing out from the crowd without ever trying to, or artlessly, seemingly effortlessly, like the ultimate form of sophistication. An account in a lively, poetic style that also gives pride of place to images, continuing the spirit of the great artistic collaborations that have always characterised Lancôme, with the participation of illustrators David Downtown, Vahram Muratyan and Cécilia Carlstedt, among others, and photographers Charles Helleu, Nico, Alexi Lubomirski and Nick Knight, to name just a few. A book can also be discovered on Lancôme counters, which was launched on the birthday celebrations on 8 March to mark International Women’s Day, which the brand honours every year. They will also be showcasing all the major highlights of Lancôme’s 80 years, along with limited-edition sets of iconic products. In addition, the celebration will take digital form, with the first limited edition exclusive to the Lancôme website: three original colours of L’Absolu Rouge inspired by heritage shades, along with a participatory and creative platform where

Lancôme in the words of its ambassadresses Lancôme shop at Haitang Bay, Sanya Island in China. Copyright L’Oréal. Photographer: Rolento

Lancôme devotees will be able to have the floor, all the better to express their vision of the brand. To close the year, Lancôme will be offering two super-deluxe objects in homage to fine craftsmanship and its French artists who have worked alongside it since the beginning: a new interpretation of the lipstick “Les Jumelés” (1958), one of the jewels in the Lancôme collections, and a jewelled edition of the extremely precious La vie est belle L’Absolu de Parfum, a few drops of concentrated happiness nestled at the heart of a crystal smile. We will have come full circle: more than ever, life will be beautiful with Lancôme. Since 1935, today and for many years to come… Françoise Lehmann states : “With 80 years of history under its belt, Lancôme is probably one of the most respected brands. This makes it a reassuring brand and proves its seriousness and quality. To perpetuate the legend, we must make the brand a coveted brand, an endearing brand, a personal brand. The most well-loved brand of them all…” She concludes : “For this 80th anniversary, we wanted this celebration to be a moment of joy,” comments Françoise Lehmann,. “Because – for Lancôme – beauty goes hand in hand with happiness.” Something of a nod to La vie est belle, the name of an incredibly successful fragrance that has become the symbol of happy beauty, a brand signature.

“The Lancôme woman is graceful and timeless, a beautiful and empowered women.” Julia Roberts “When you look at the women who have represented Lancôme, their beauty penetrates to a deeper level, an emotional level, as opposed to just being about the façade.” Kate Winslet “Lancôme is like an homage to all women.” Penélope Cruz “Lancôme celebrates beauty of all backgrounds. Its ambassadors are all individual women whose beauty goes way beyond skin-deep.” Lupita Nyong’o “Lancôme is class, elegance, grace, but also beauty that comes from within.” Lily Collins “For me, Lancôme is synonymous with delicacy. It’s a brand that conveys a refined image. It also has a prestigious and very Parisian side.” Alma Jodorowsky “Lancôme talks to all women, its vision of femininity is elegant, not superficial, sensitive, generous. It goes straight to the heart of women…” Daria Werbowy

LETTER FROM THE EDITOR

The three R’s

of travel retail

ravel is a constant voyage of discovery and travel retail is a stop along the way. It may be a somewhat obvious cliché, but as the industry heads east to Singapore for this year’s TFWA Asia Pacific Exhibition & Conference it’s worth remembering that our business is ultimately based on nothing more than a fleeting physical moment in time. At the turn of the 20th century, American advertising and sales pioneer, E. St. Elmo Lewis coined one of the founding principles of modern-day marketing—the AIDA model—and while the importance of Attention, Interest, Desire and Action has evolved into a number of different and expanded acronyms and approaches, the basic premise still rings true. However, capturing the attention of prospective consumers is becoming increasingly challenging, for a wealth of reasons, as both the travel retail environment and consumer demographics undergo significant change—both positive and negative. Add to that a general slowdown in regional economic growth, and the duty free and travel retail community across Asia Pacific is faced with ever-increasing pressure to creatively drive revenues and market share. So the timeliness of this year’s conference theme couldn’t be more apt as ‘Staying Ahead’ tops the strategic agenda for developers, operators, retailers and suppliers from Auckland to Yangon. You only have to look to China to see the evolution of the destination airport with better retail planning key to future growth whether it’s at Beijing’s up-and-coming Daxing International Airport, which will be of the biggest in the world when it opens in 2018, or the hugely successful domestic luxury model seen at Shenzhen. And although China will continue to dominate market decisions and discussions in the years to come, the region as a whole is really at a transformative point—at its departure gates where operators such as Changi Airport Group is continuing to forge new partnerships and introduce retail world-firsts; at its land and sea borders with groundbreaking retail initiatives like the new landmark Kai Tak Cruise Plaza; and in the online domain, as more and more consumers look to the Internet as a first port of call. The tangible experience and emotion associated with embarking on that travel retail journey continues to capture the imagination, and spend, of consumers everywhere, and the challenge is to continually research, reimagine and refine in order to keep customers engaged and convert interest into action. I hope you enjoy this issue. Kindest Regards,

MAY 2015 · TFWA AP · VOL 19 · NO 2

Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published by Global Marketing Company Ltd. 26 Pearl Street, Mississauga Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldives Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. May 2015, Vol 19, No.2. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2015 Asia Duty Free & Travel Retailing.

ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca

PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Ryan White ryan@globalmarketingcom.ca OVERSEAS CORRESPONDENT Claire Malcolm claire@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Rebecca Byrne Faye Rowe

ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

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

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

CONTENTS

What’s inside

LEAD STORIES 14 Changi Airport Group RECORD-BREAKING FIGURES AND GROUNDBREAKING INITIATIVES Changi Airport Group continues to forge new partnerships to reshape and transform travel retail

19 Dufry GLOBAL DOMINANCE

When Dufry purchased Nuance last year, there was a collective gasp in the travel retail world. With recent news that the giant is also purchasing World Duty Free, it’s apparent that the game has completely changed

22 Eraman ERAMAN’S EMPORIUM LEADS THE WAY AT KLIA2

With its dominant presence in the new terminal, Eraman continues to strengthen its position as a premier airport travel retailer

26 China Duty Free Group STAYING AHEAD OF THE CHINA CURVE

Spearheading market growth with three decades’ experience at the sharp end of the business, China Duty Free Group is embracing a new era for the industry

32 Dufry Cambodia DUFRY CAMBODIA GEARS UP FOR UNPRECEDENTED EXPANSION

Different passenger profiles at the gateway locations of Phnom Penh and Siem Reap have prompted a two-pronged approach to securing future sales growth. Frederic Waeber, Country General Manager, Cambodia, and Felix Brunner, Deputy COO, Southern Asia Pacific, explain more

40 Prestige Supplies PIONEERS IN SOUTHEAST ASIA

Prestige Supplies Inc. continues its rapid expansion of duty free in emerging markets of Mongolia, Cambodia and Laos

44 Cruise Terminal: Kai Tak Cruise Plaza LANDMARK KAI TAK TRANSFORMATION STEERS NEW RETAIL EXPERIENCE

Kai Tak Cruise Plaza (KTCP), the 2,300-square meter retail facility at Hong Kong’s Kowloon’s Kai Tak Cruise Terminal (KTCT) has been on the fast track to development since opening for business late last year

FEATURES Inflight Sales Group flies high Shanghai: rising star of the East Moroccanoil’s Asia Pacific aspirations Guest writer: Patrick Bouchard Premium potential for Furla

38 50 74 76 80

Lacoste’s future vision Spotlight on TFWA AP exhibitors Lindt achieves a new level of elegance Leonidas welcomes boost in sales Neuhaus gears up for TFWA AP

86 90 92 94 96

CONTENTS

LEAD STORIES

100

54 China Airports Update NEW HORIZONS FOR CHINA’S AIRPORTS

A seminal year for the aviation industry, airport operators and retailers across the country are looking to augment non-aeronautical revenues with retail planning at the heart of future growth

62 i2i Group China ANALYZING THE CHINA TRAVEL BOOM

A summary of the latest trends in Chinese travel and shopping behavior from consultancy group i2i Group China

64 Guest writer FROM TRAVEL RETAIL TO TRAVEL E-TAIL

Peter Mohn, CEO and owner of consumer research specialist m1nd-set, delves into a future where tech-savvy travelers pay by smartphone and post store pictures online

68 Dubai Duty Free THE COMPLETE PACKAGE

From new products and stores to renovations, promotions and staff training, Dubai Duty Free continues to surprise and delight travelers looking for their next duty free purchase

72 Editor’s Picks FUN AND FABULOUS NOVELTIES

A dozen hand-picked desirables to celebrate this month

82 Watches: Wenger WENGER EYES 100 NEW DESIGNS

Rapid expansion of the watch range is providing a stepping stone into travel retail for the company

92 Lindt ACHIEVING A NEW LEVEL OF ELEGANCE

LINDT is showcasing its new POS fixtures that center on the Swiss chocolate brand’s premium gifting offer

100 Whisky Report THE SPICE OF LIFE

Asia Duty Free speaks with four companies with a stake in Asia-Pacific’s duty free whisky category, each with their own ideas on how to grow the business

104 Spirits: Diageo EXCLUSIVE AND LUXURIOUS

Craig Norwell, Regional Director - Diageo GT Asia-Pacific, tells us how Diageo achieves year-on-year growth in Asian travel retail by focusing on exclusive, super-premium brands

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

108 Spirits: Vana Tallinn ESTONIAN EMPIRE

For years, Vana Tallinn liqueur has been hidden away in its corner of the world, but this traditional drink is now bursting out of its Baltic confines

120 Spirits: Beluga Vodka FROM RUSSIA WITH LOVE

Beluga Vodka continues its dominance of the vodka category in Russia and CIS, and continues growing in other key duty free markets around the world

82 124 A Mixed Bag A MIXED BAG

Here, we feature seven must-have products that can be found in a fashion-savvy woman’s bag this Spring-Summer season

FEATURES Appetite for success Diageo: Exclusive and luxurious Beam’s powerful portfolio Spirits: Special packaging

98 104 106 110

Liquor news The French spirit From Russia with love Tobacco news

114 118 120 122

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AIRPORT REPORT: CHANGI AIRPORT GROUP

Record-breaking figures

and groundbreaking

initiatives

Jewel Changi Airport, a unique new construction, will link three terminals

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

REBECCA BYRNE

Changi Airport Group continues to forge new partnerships to reshape and transform travel retail

The centerpiece of Jewel Changi Airport will be a breathtaking forest valley

reshly minted as the World’s Best Airport at the 2015 Skytrax World Airport Awards, as well as the Best Airport for Leisure Amenities, Singapore’s Changi Airport really has something to be proud about. This accolade was bestowed on Changi Airport by some 13 million travelers from more than 100 nationalities, providing feedback on close to 40 key performance indicators for airport service and products. Seasoned travelers would know that Changi Airport is no stranger to awards. Since its opening in 1981, it has accumulated no fewer than 480 awards from around the world. Consistently voted as a top airport in the world of aviation, Changi Airport is known for its excellent facilities spanning three terminals, and high service standards for passengers and visitors alike. Even as the world’s most awarded airport celebrates, its manager Changi Airport Group (CAG) does not rest on its laurels, nor let up on its plans to further enhance the travel experience for passengers. It is looking to further expand its capacity from the current 66 million passenger movements a year to 85 million passenger movements. A new Terminal 4 is currently being constructed and is expected to start operations in 2017. Terminal 1 will also be expanded, and a new destination complex, Jewel Changi Airport, built in front of it. Works are expected to be completed in 2018. Projecting the airport into the future, plans for a Terminal 5 are already underway. Capable of handling some 50 million passengers per annum, Terminal 5 will have an eventual capacity almost equivalent to that of Terminals 1, 2 and 3 combined when it is completed in the mid-2020s’. Even though 2014 was a challenging year for the aviation industry, figures for Changi Airport were again record-breaking with over 54 million passenger movements in 2014, the highest in its 33-year history. Boasting excellent connectivity, Changi is currently linked to more than 300 cities over some 70 countries via about 100 airlines. South Asia and Northeast Asia continued to be strongholds for Changi Airport, with Indonesia, Malaysia, Australia and China as its largest market sources. Changi Airport welcomed several new carriers in 2014— Uzbekistan Airways, Jetstar Pacific, Malindo Air, Tigerair Taiwan

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AIRPORT REPORT: CHANGI AIRPORT GROUP

and VietJet Air joined the Changi family. CAG also added services to Okinawa in Japan, Seattle in the U.S. and Phu Quoc in Vietnam. In China, Lanzhou and Xi’an were added, bringing the total number of destinations to the country to 26 and making Changi one of the best connected airports in Asia to China. In early 2015, Air New Zealand commenced services to Singapore, further opening the gateway to the Southwest Pacific for travelers from other parts of the world. On the travel retail side, several major enhancements have been launched to elevate the shopping experience for travelers. In February 2015, Korean company Shilla Duty Free officially launched 19 cosmetics and perfumes stores across Changi’s three terminals. Among the 80 brands that are exclusive to Shilla Duty Free, 26 brands are new to Singapore. In March 2015, DFS Group

Plans for the new Terminal 4 include cutting-edge design

Changi Airport’s new Terminal 4 is expected to be operational in 2017

Inside Jewel Changi Airport, travelers and residents will enjoy world-class lifestyle experience

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

opened the world’s first wines and spirits duplex store at Terminal 3 showcasing the unique Raffles Long Bar experience, as well as Asia’s largest assortment of single malt scotch in an airport. Commenting on these enhancements, Lim Peck Hoon, CAG’s Executive Vice President for Commercial, says: “Shilla Travel Retail and DFS are two of the biggest brands in the travel retail industry, and we are excited to partner with them in bringing revolutionary shopping concepts and experiences to our passengers. Double-volume duplexes and in-store experiential activities are perfect examples of innovations which will wow passengers and elevate the retail experience at Changi Airport to a new level. We look forward to partnering them to bring even more exciting retail initiatives and positively surprising moments to our passengers.” Adding on to the excitement, in late December 2014, CAG, together with Singapore property giant, CapitaLand, broke ground for the construction of Jewel Changi Aiport. It will feature leisure attractions such as a large forest valley, a rain vortex that is one of the highest indoor fountains in the world, and

AIRPORT REPORT: CHANGI AIRPORT GROUP

park spaces comprising gardens, walking trails and playgrounds. Shoppers will also be delighted to find enhanced retail offerings such as new-to-Singapore international and local brands. Other facilities include a cabin hotel and aviation facilities such as an integrated multi-modal transport lounge dedicated to fly-cruise and fly-coach passengers. The complex, covering 134,000 square meters, will be a central node linking all three terminals by covered glass walkways serviced by travellators, enabling ease of movement by passengers and supplementing the existing Skytrains. “We envisage Jewel Changi Airport to be a world-class lifestyle destination that will appeal to both travelers and local

DFS opened the world’s first wines and spirits duplex store at Terminal 3

In 2015 Shilla Duty Free launched its products across Changi’s three terminals

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

residents alike. With its unique dining and shopping concepts, integrated with indoor gardens and leisure attractions, a myriad of experiences lie waiting for all visitors under one roof,” says Peck Hoon. Summing up the future of Changi Airport, Peck Hoon concludes: “Continual innovation and enhancement of the Changi experience have been important principles we have held close to our hearts as the airport grew steadily over the years. Even as airports around the world renew and customer expectations rise, we will continue to challenge ourselves to transform the paradigm of travel and enhance Changi’s attractiveness as a stopover point and a must-visit shopping destination for travelers.”

RETAILER NEWS: DUFRY

Global dominance

Dufry is especially keen to pick up Heathrow airport’s WDFG location, as this airport is a gateway to emerging markets

WDFG’s locations in Spain are strategically important to Dufry to strengthen its hold on the Mediterranean region

ufry AG, the world’s biggest travel retail operator, has purchased a 50.1% share in Italy’s World Duty Free (WDF), the holding company of World Duty Free Group. This move ends months of speculation and gossip, with a list of reportedly interested buyers that included Lotte, Shilla, DFS and LS travel retail, though admittedly the name Dufry appeared most often and highest on the list. In the latter half of February, reports came that Dufry was in serious talks with WDFG, and these were apparently correct. The 50.1% controlling percentage sold represents the share owned by Edizione, the holding company 100% owned by the Benetton family. Dufry valued the fully diluted share capital of WDF at €2.6 billion and the enterprise at €3.6 million (US$3.8 million), and agreed to pay €10.25 per share in cash. This price represents a premium of about 22% on volumeweighted average share price. While this purchase gives Dufry control of WDF, the larger travel retail company wants to own its former rival outright and is planning a complete takeover. Shortly after announcing its purchase of the initial 50.1% stake for €1.3 billion (US$1.4 billion), the company further announced that it plans to purchase the remaining 49.9% through a mandatory offer once the first sale is complete, again offering €10.25 per share in cash.

Global reinforcement The sale creates a super-giant that will own close to 25% of the airport travel retail market. WDF currently operates more than

550 stores in 105 airports in 20 countries around the world. Dufry currently operates 1650 stores in 60 countries. After the purchase is finalized, Dufry will have stores in 67 countries. Combined pro forma turnover of the two companies in 2014 was US$7.8 billion, with a pro forma EBIDTA of US$1 billion. Dufry will integrate WDF into its organization, and expects annual cost synergies of €100 million. These savings will come about by integrating global operations and through improved purchasing power in addition to optimized pricing and promotion strategies. The company expects to realize these synergies by 2017. Another expected source of increased revenue for Dufry is the strengthened position overall, creating additional avenues for growth in future tenders and renewed contracts by leveraging core competencies. The combined capabilities, logistics network and positioning will help the company to be even more competitive in the tendering process. The initial purchase from Edizione, which had itself purchased its larger controlling share of WDF in 2008, is expected to be completed in the third quarter of 2015. Dufry intends to initially finance the acquisition of WDF and the refinancing of that company’s debt through a fully committed debt bridge facility of €3.6 billion (US$3.8 billion). This financing is being provided by BBVA, Goldman Sachs, ING, Santander, UBS and UniCredit. It is expected to be refinanced by the rights issue of at least €2.1 billion (US$2.2 billion) and long-term debt instruments for a total amount of up to €1.5 billion (US$1.6 billion).

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

RETAILER NEWS: DUFRY

The Nuance purchase This game-changing purchase comes straight on the heels of another, as last year Dufry rocked the travel retail world by suddenly announcing its purchase of The Nuance Group for US$1.7 billion. Prior to that purchase, Dufry was undoubtedly one of the top companies in travel retail, but the Nuance purchase made the Swiss company the undisputed leader. While the WDF purchase has strengthened Dufry’s position globally, the Nuance purchase was a real operational coup as Nuance was especially visible in regions where Dufry needed to increase its strength, such as Asia and the Mediterranean. The addition of WDF’s Mediterranean and other strategically important stores has reinforced Dufry strongholds in that region as well as in the Americas, and also strengthened its position in the Middle East. Diaz states that London’s Heathrow Airport, too, is an important location for their growth strategy. “Having access to one of the most diverse passenger flows in Heathrow, combining attractive emerging and developed market customer profiles, will allow us to leverage our existing expertise on all the customer groups and to further develop our global offering,” he says. Business analysts suggest that this purchase coming so quickly after the Nuance purchase will weaken Dufry’s position in the short term since the company will still be working out the logistics of the combined Nuance-Dufry operations when it begins evaluating and deciding upon the Dufry-WDF operational logistics. That being said, the company is sacrificing short-term

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

comfort for long-term gain, as after the first strain it is expected to surge ahead. In a company statement, Díaz said: “The acquisition of WDF is a truly unique and highly transformational transaction for Dufry and is equally a milestone for the travel retail industry overall. The transaction further enhances our global position and with a market share of 24% in airport retail, we plan to drive our business to new levels in term of capturing global passenger flows, execution capabilities and efficiencies.”

WDFG’s stores in western South America, such as this one in Chile, will add to Dufry’s grip on the eastern side of the continent

RETAILER REPORT: ERAMAN

Departure Emporium: The new International Departure Emporium is the piece de resistance.

Eraman’s Emporium leads the way at klia2 by

REBECCA BYRNE

With its dominant presence in the new terminal, Eraman continues to strengthen its position as a premier airport travel retailer.

Opening of the Emporium: Malaysia’s Deputy Prime Minister, Tan Sri Muhyiddin with senior officials from the Government and Malaysia Airports Holdings Berhad

n 2014 Eraman, Malaysia Airports Holdings Berhad’s retail arm, expanded its presence into klia2 when the terminal opened in May. As one of the main concessionaires of the new airport, Eraman now operates a total of 22 outlets across 28 lots, covering 86,523.4 square feet of retail space. Mr. Zulhikam, Eraman’s General Manager, comments: “Our operations at the new klia2 terminal represent a major step in our positioning as a leading airport travel retailer. When we entered the space we were given the opportunity to bring all our expertise and know-how and create something exceptional in terms of customer service and experience. Even though klia2 is a low cost carrier operation airport, we are still determined to provide a first class shopping experience.”

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

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RETAILER REPORT: ERAMAN

Departure Emporium: An innovative canopy of LED lights create waves of light

At klia2, Eraman offers passengers more than a mere ‘shop and go’ experience when they step into any of its outlets stocked with a wide range of competitively priced duty free product. Instead, it aims to provide an enjoyable retail adventure for the discerning traveller. Among the highlights is the walk-through International Departure Emporium. Officially opened by the Malaysian Deputy Prime Minister Tan Sri Muhyiddin Yassin on 16 February 2015, this piece de resistance is Eraman’s largest single retail space to date at 32,320.7 square feet. The Emporium comprises four retail outlets selling chocolates, liquor, tobacco and fragrances, and is described as a ‘best of world’ showcase in the new terminal. Interactive elements and a pleasurable atmosphere are key to achieving the primary focus of creating a memorable overall brand experience rather than aiming purely to close the sale. Recent brand additions, which include Jurlique, Bobbi Brown and Benefit, proved to be effective in generating more per ticket spend, as well as boosting up confidence towards Eraman’s ability to associate with globally-known brands. The introduction of Bibik Heritage restaurant including an apparel and accessories corner, aptly called Bibik Closet and a dedicated desserts area named Bar Baba.

The DPM and key staff: Malaysia’s Deputy PM signs the plaque

Marketing activity is also a major focus for Eraman, to enhance the total customer experience and to increase per ticket spend. The stores are supported by a canopy of LED lights which adorns the ceiling of the emporium, creating ‘waves’ of light to present different moods, while a video wall runs the length of the entire structure and displays promotional clips, messages and graphics. This focuses on providing travellers with the brand experience rather than simply a space to sell products. Furthermore, Eraman is maximizing its potential marketing exposure via the use of innovative advertising. Zulhikam adds: “There is abundant space over the video wall to facilitate opportunities for a variety of brands – the atrium in the middle of the emporium can be used for concourse promotions, while lightbox advertising can be implemented on the surrounding pillars. All these are provided by Eraman to heighten brand mileage and visibility.” Zulhikam is confident that Eraman will continue to provide a joyful experience in the airports in which they operate. “We believe that, with our highly focused approach, cutting edge design and first class local and international brands, we give our customers the ultimate downtown shopping experience inside the airport.”

Departure Emporium: A video wall runs the length of the Emporium to showcase brand and product marketing

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

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RETAILER REPORT: CHINA DUTY FREE GROUP

Staying ahead of the

China curve by

CLAIRE MALCOLM

Spearheading market growth with three decades’ experience at the sharp end of the business, China Duty Free Group is embracing a new era for the industry An architectural icon, CDF Mall is the centerpiece of the Haitang Bay complex in Sanya, Hainan

T The mall is home to more than 300 international brands representing the full gamut of luxury and designer names

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

he double-digit decline to single-figure growth of mainland China’s luxury market since 2012, and its negative growth in 2014, is indicative of market normalization and channel diversification and not necessarily a doom-laden prognosis for retail in general. So says Zhao Feng, Vice President, China Duty Free Group (CDF), who goes on to say that the switch from almost total reliance on a single channel is actually an exciting opportunity for future growth. Feng also says that diversification of customer ‘desire’ is shaping a new Chinese consumer profile, and one that is not adversely affecting CDF group revenues. She explains: “Despite a slowdown in the luxury market we have achieved double-digit growth and the growth rate of [our] revenues is much higher than the luxury goods market in China.”

RETAILER REPORT: CHINA DUTY FREE GROUP

Opened in September 2014, the 120,000-square-meter retail destination is the largest single tax free shopping center in China

“There has also been a move from gifting to purchase for self-use. This has become a prevailing [trend] and will be more substantial in the long run,” Feng adds.

Luxury redefined CDF research shows that although the country recorded negative luxury goods market growth in 2014, overall Chinese luxury consumption has continued on its fast-track ascendancy. According to Feng, while Chinese consumer behavior has matured, the selection of channels has increased, with outbound shopping and online purchasing gaining in popularity and with the travel retail market set to remain a key beneficiary of the country’s high-speed tourism sector growth. Figures released by the China National Tourism Administration put the forecast for inbound tourist arrivals by 2016 at 130.4 million with 164 million outbound Chinese travelers.

CDF has expanded beyond China’s borders with the Q4 2014 opening of its first international downtown duty free store in Siem Reap, Cambodia

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

“We have an important channel, which is travel retail. This channel has continued to grow substantially,” Feng says. The growth of China’s middle class will also be a driving force for luxury and travel retail market development. Says Feng: “It is no longer limited to first tier cities. The middle class continues to expand, and they will be a mainstay and major force behind travel retail. They are also CDF’s core consumer.” Shifting customer demographics are similarly impacting sector prospects, with Feng highlighting 36-year age point as a “turning point,” when expenditure by both sexes converges, whereas women dominate before hitting this magic number. “This has changed in the last two years from 39 years old, and male consumers are quickly catching up. There is also a brief peak at 51 years old, after which the consumption capacity and willingness to pay drops significantly. This was set at 48 years old two years ago,” Feng says. Regional market differences are also becoming more marked. While consumption is still concentrated in central cities, and Beijing and Shanghai continue to set national trends, northern China potential is growing. CDF says that Chinese consumers have evolved from “irrational to rational” purchasing behavior, thus bringing opportunities for more and more new luxury brands looking to expand eastwards. Says Feng: “Consumer behavior in China compared to mature markets is changing as Chinese consumers become more rational, and because they are younger they are willing to try different brands and styles. They are not so homogenous and they will buy, but they tend to focus on fashion and apparel.” This new style of decision-making is supported by a focus on exclusivity, quality and, more interestingly, value.

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RETAILER REPORT: CHINA DUTY FREE GROUP

CDF will add a second Cambodia store to its fledgling regional portfolio with Phnom Penh scheduled to open for business in Q4 2015

Restrictions on the single purchase policy of hot-ticket items was also approved, covering perfumes, cosmetics, watches, apparel, and small leather goods, among other items. “We hope that CDF Mall will become a name card for the city, and also offer a very good quality and experience, so that we can create a unique travel experience,” says Feng. More than 300 brands are currently represented at the mall and its early success is swiftly positioning it as a flagship for the country. “We represent the highest level of duty free shopping in China. In the future we will introduce more activities to ensure that it becomes an excellent platform for brand storytelling for luxury products,” Feng says.

Ahead of the curve

Record-breaking retail CDF’s Haitang Bay complex in Sanya may be only eight months old, however it is already setting records and earning international accolades. Opened in September 2014, the 120,000-square-meter retail destination is the largest single tax free shopping center in China, “if not the world,” according to Feng. “It really is a milestone for us in China. Since opening, we have had 2.8 million shoppers and we are already regarded as Sanya’s new landmark and a top tourist attraction,” she says. Results in the first six months’ have been impressive with Feng reporting a record single-day high of RMB 50 million (US$8 million) over the Spring Festival Golden Week period with a staggering 36,000 visitors entering the center daily. To cope with the sheer volume of customers, the center has a visitor flow limit in place and uses WeChat, micro blogging and other media channels to share shopping transportation guides and share peak-period shopping tips. In late 2014, the Ministry of Finance, through the State Council, approved further changes to its offshore duty free shopping policy in order to support international tourism to Hainan. The listing of types of duty free goods was expanded to include lifestyle items such as infant formula milk powder, coffee, health and wellness products and household medical equipment, bringing the total of approved goods to 38. 30

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

The luxury e-commerce market in China is forecast to reach RMB 37.4 billion this year and Feng is confident that CDF is on the right track to piggyback on the appeal of online shopping whilst maintaining growth in physical store revenues. “In China, consumers are willing to buy luxury products online and this presents unprecedented challenges. But it won’t replace offline shops as online and offline retail complement one another,” she says. In January 2015 CDF launched its own online luxury brand platform, and Feng says that the way forward is to effectively combine the online and offline experience. “The market is dynamic and energetic. Tourism and duty free shopping are the signature services of CDF. We have two platforms to deliver this, through CITS and CDF,” she notes. This will see further implementation of CITS’ dual-core strategy of ‘travel and duty free’ with the integration of tourism resources and duty free shopping as the catalyst for enriching the tourist resort experience and enhancing shopping choices. With plans for a luxury goods industrial park, CDF hopes to build a new platform for brand and consumer communication, and create a second top-ranking tourist-meets-retail destination. Added to that is CDF’s move outside of local borders, with the December 2014 launch of its first downtown duty free store in Siem Reap, Cambodia, and a second Phnom Penh location scheduled to open for business in Q4 2015. Remarks Feng: “Haitang Bay is a showcase platform for many international brands but we also want to be a platform where brands can work with us to communicate their ideas.”

Zhao Feng, Vice President, China Duty Free Group

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RETAILER REPORT: DUFRY CAMBODIA

By introducing the walk-through concept, the ultimate aim of store design is to create an unforgettable shopping experience with a strong sense of place

Dufry Cambodia

gears up for unprecedented

expansion

ambodia is currently one of the world’s hottest travel destinations and with the Cambodian Ministry of Tourism (CMOT) forecasting an 11% surge in international visitors during 2015 to reach five million travelers, this positive forecast promises an outstanding year for Dufry’s two Cambodia gateway stores at Pnomh Penh and Siem Reap airports. “The successful five-year extension of our Cambodian operations’ contract through to 2020 means that the second half of this year and first six months of 2016 will be very busy. We will be focusing on refurbishing and extending the new walkthrough stores at both airports while consolidating resources in readiness to meet extremely ambitious growth in Cambodia in the coming years,” says Felix Brunner, Deputy COO, Southern Asia Pacific, Dufry. During this transition expansion period Dufry expects that by working hand-in-hand with Cambodia Airports (SCA), a 32

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

CLAIRE MALCOLM

VINCI Airports subsidiary, it can continue to generate growth throughout this major refurbishment, although it will be at a more moderate level. In addition to overland visitors from Vietnam and Laos, CMOT statistics rank China, South Korea, the US and Thailand as the top four visitor source markets. However, Dufry Cambodia’s outlets are also attracting Japanese passengers, who are very active shoppers at both locations. “That said, the growth of individual nationalities between Phnom Penh and Siem Reap reflect slight differences because of the different customer profile at each location. Phnom Penh is more business and Cambodian national-oriented, while Siem Reap has a clear focus on cultural tourists,” notes Frederic Waeber, Country General Manager, Cambodia, Dufry. “Subsequently, it remains a top priority for us at Dufry Cambodia to ensure the level of customer service is always at the highest level and the effective allocation of multilingual staff. We

RETAILER REPORT: DUFRY CAMBODIA

Best-selling brands in Textiles and Accessories include Lacoste, AJ, Furla and Tumi

now offer customers access to staff fluent, not only in English, but in Chinese, Vietnamese and Korean,” he adds. To sharpen Chinese speaking staff ’s communication skills, the company recently introduced a series of extra language lessons.” With an increase in the size of operations at Phnom Penh and Siem Reap next year, Dufry intends to ensure that its in-store service mirrors the more high-end international names that it will be introducing to its Perfumes and Cosmetics and Liquor and Tobacco categories. “We will also bring in several new brands to other categories such as Textiles, Watches, Jewelry and Accessories with the new walk-through concept. All these demand that our staff is equipped with the highest level of service skills,” says Waeber. “Dufry Cambodia is very upbeat about the massive expansion of our retail outlet floor space as part of the new contract. As a leading global travel retailer, we are able to call on our 50-year track record of success,” adds Brunner. The company will also continue to work closely with SCA to ensure that shop refurbishments at both airports are seamlessly executed, as they explain: “We are confident that our new arrival shops will definitely open on time, later this year, and that both terminals’ walk-through departure hall concept stores will open in early 2016 as planned. “By introducing the walk-through concept, the ultimate aim of our store design is to create an unforgettable shopping experi-

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

New high-end international names are to be introduced in the Perfumes and Cosmetics and Liquor and Tobacco categories

ence with a strong sense of place that is unique to Cambodia. As local ambience is instantly iconic, it will be a vital tool in attracting passengers through the doors.” As a result, store concepts feature distinctive patterns and textures reminiscent of Angkor Wat and also play on the explosion of colors that Cambodia is known for, as a uniting theme. To identify areas with local products, promotions and principal circulation areas, Dufry has transformed various eye-catching forms into dazzling three-dimensional displays. Tobacco and Liquor have been the stores’ biggest selling categories, with Chunghwa and Hennessy among the many in-demand brands. “In the last two years we have made sizeable investments in expanding our operations and portfolio in other categories such as Perfumes and Cosmetics, Textiles, Watches, Jewelry and Accessories, and Destination Souvenirs, which has generated a measurable increase in sales,” says Waeber. Given Cambodian Airports’ current double-digit visitor growth, Dufry eagerly anticipates that these upgraded categories and newly introduced brands will make a further positive impact on sales with the significant expansion of operations at Phnom Penh and Siem Reap. Over the last 12 months, Dufry Cambodia has experienced an overall increase of around 8% in spend sales value at its stores. Says Waeber: “This growth is clearly attributable to the addition of the international world-known brands we launched with

In the last 12 months, Dufry Cambodia has experienced an overall increase of around 8% in spend sales value at its stores

extensive marketing support during this period.” Detailed in-house research shows that the main contributors to sales are Asian travellers, including Chinese and Koreans. Best-selling brands include SKII and Laneige in Perfumes and Cosmetics; Lacoste, AJ, Furla and Tumi in Textiles and Accessories; and Swarovski in Jewelry. “The road ahead will see us roll out our newly expanded offerings through a clearly thought-through marketing strategy. To ensure that we can use the most appropriate strategies, we have identified two different sets of passenger profile for Phnom Penh and Siem Reap,” notes Waeber. “Passengers at Phnom Penh tend to be business travelers where average spending power is higher than at Siem Reap, where core passengers are predominantly leisure travelers. “This is why the brand line-up at both destinations will be differentiated, and we continue to implement two-pronged marketing strategies to build awareness and sales across both airports,” adds Brunner. Marketing aside, Dufry remains optimistic that its pioneering walk-through shopping concept will greatly enhance visibility of the expanded offerings, guaranteeing that each departing passenger will have access or the opportunity to shop before heading to their gate. Space expansion is another important element of Dufry Cambodia’s strategy, as they explain: “In ensuring our objectives

in this area can be achieved, we intend to expand space in existing locations and complement them with fresh additions to our concessions portfolio. “At the end of the day, new stores promise excellent potential in terms of diversifying our already broad concession portfolio and enabling us to address new market categories and customer profiles.” The new walk-through concept, expanded space and offerings with supportive marketing will guarantee every visitor to Cambodia a “pleasant memory of an enjoyable shopping experience that they will want to repeat.” Ultimately, all of these changes represent huge advancement on Dufry’s existing offering, and should prove to be a very effective and impactful “natural marketing strategy.” “In terms of promotional activities, in Asia, duty free shoppers in airports love to feel a sense of place and enjoy some kind of incentive each time they make a purchase,” says Brunner. Adds Waeber: “At Dufry Cambodia, we highlight this in our major promotional campaigns by offering value-for-money benefits to increase customer propensity to spend. Last year, for example, we ran a four-month CUP card promotion aimed mainly at mainland Chinese that rewarded cardholders spending US$176 on their cards at either airport location with a US$10 rebate. The initiative was so successful we will re-run a similar offer this year.”

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ONBOARD SALES: INFLIGHT SALES GROUP

Flying

high by

RYAN WHITE

Inflight Sales Group sees good performance in 2014 in Asia and looks forward to similar results in 2015 while cementing new partnerships with Asian carriers

Inflight Sales Group has seen great success with NoNo!, an innovative hair removal solution

he future looks bright in Asia for Inflight Sales Group (HK) Ltd. (ISG HK). Currently working with 15 airlines in the region and looking towards adding a few more this year, the company performed well last year and is now looking to continue its performance in 2015. Asia Duty Free sat down with Vimal Rai, Executive Director of ISG HK, to learn about recent developments and what we can expect to see from the duty free powerhouse in the months to come. “Last year saw us adding a few new accounts and maintaining revenue performance qualitatively for our Asian customers,” he explained. “With so many customers across multiple geographies now, there was clearly a wide variety of performance across markets, some significantly up and others more challenging, especially towards the end of the year. Overall I would say we were more diversified than in 2013, which is always a good thing in itself.” ISG HK works with a wide range of brands across all categories—concentrating on those that “show demand,” says Rai—as a means of giving travelers and airline customers the most choice possible when it comes to inflight duty free. In terms of trending categories, customers have shown an increasing tendency towards niche beauty brands, while gadgets and watches have continued to be popular. In regard to specific products, Rai cites NoNo!, the professional hair removal solution; Veld’s; Chantecaille; Daniel Wellington; and Maserati as exceptional successes for ISG HK. And in much the same way as it’s difficult to distill the company’s Asia performance into a few sentences given the geographic diversity of the region, Rai tells us that multiple trends intersect where popular categories are concerned.

“Of course, ‘Asia’ is a very diverse set of countries, North to South and East to West. Nevertheless, very generally speaking, volume drivers tend to be traditional categories like liquor and tobacco, although there are some interesting developments in some parts of Asia with respect to skincare and cosmetics. We find gadgets and electronics to be in great demand and by far the most interesting sales drivers to focus on. Value drivers are of course subject to the range of brands that we curate for our specific airline partners; watches have shown a particular resurgence in Asia in general, so that has been interesting overall for us.” In terms of high-spending travelers, though, the answer is somewhat less complicated. Rai tells us that Chinese, Korean and Japanese passengers—with the order changing depending on the airline and route—are still driving the business.

New year, new opportunities 2015 has started off cautiously for ISG HK given currency uncertainties. Nonetheless, Rai notes that this has allowed the company to look at new growth markets. ISG HK recently in February signed an agreement with Russian partner Aeromar CJSC to offer duty free retail programs on board Aeroflot subsidiaries Rossiya and DonAvia. Back in Asia, the company’s latest additions have been Tigerair in Singapore and Malaysia Airlines, with Rai noting that sales have been good on both airlines. “In fact we are reevaluating sales expectations as a result of the explosive growth we are seeing on Tigerair, which has been the result of some very innovative crew engagement, and set upon the bedrock of a mutually-supportive relationship between the airline’s inflight sales division and ISG,” Rai explains. “The synergy from just these two things, in addition to a refreshed product assortment, is unbelievable.” ISG HK expects to add a few more Asian carriers to its customer list this year, and Rai concluded our conversation by noting that 2015 should mirror the company’s 2014 results, barring any unexpected rise or fall in economic sentiment in the region.

“We are re-evaluating sales expectations as a result of the explosive growth we are seeing on Tigerair—the result of some very innovative crew engagement and a mutually supportive relationship between the companies.” VIMAL RAI, EXECUTIVE DIRECTOR, INFLIGHT SALES GROUP (HK) LTD.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

the adventure begins.

BORDER RETAILER: PRESTIGE SUPPLIES

Land border store in Zamiin-Uud

Pioneers in Southeast Asia

REBECCA BYRNE

similar in concept to the ship channeling business,” explains Lukas Coates, Purchasing Manager. “We have set up a shop to cater directly to the mining industry of Mongolia and China. At any given day at this international checkpoint there can be up to 2,000 trucks crossing the border carrying gold, copper, coal and other natural resources.” The store, situated in Gashun Sukhait, is 25 square meters and its primary product is Chinese tobacco, with brands such as Double Happiness. ‘The concept has been well received,” continues Coates, as he talks about plans to roll out the groundbreaking model to further sites along the border. Other opportunities Prestige Supplies intends Lukas Coates, to capitalize on in the near future Purchasing Manager, include Mongolia’s new internaPrestige tional airport, currently under construction and set to cater to 10 million people, and the relaxation of visa laws with Russia, which has increased border traffic. 2014 saw an economic downturn in Mongolia, however, encouragingly, the company did not lose ground. “In spite of the unpredictable economic and political circumstances, sales remained

ver the past seven years Prestige Supplies Inc. has been growing and consolidating its foothold in travel retail and wholesale in Southeast Asia. From its first store presence in Mongolia, which opened in 2007, the company has added a further seven stores across three countries, with more planned for 2015. In Mongolia, Prestige Supplies now has six stores, covering international, diplomatic, downtown and land border channels. The most recent addition, a land border store situated on the MongolianChinese border, showcases a unique concept called truck channeling. “This is

Prestige Supplies continues its rapid expansion of duty free in emerging markets of Mongolia, Cambodia and Laos

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

stable during the year,” reports Coates, and on a positive note he adds that: “We are off to our best start yet in 2015. We are experiencing an increase of 27% in sales turnover compared to the same period last year.” Prestige Supplies has a strong presence in Cambodia. The company’s store in Bavet on the Vietnamese border opened in February 2013 and has exceeded expectations. “We are the sole operator at the border and this is our largest operation at 2000 square meters,” says Coates. Bavet caters to more tourists and locals entering and leaving Cambodia than anywhere else in the country. “We saw extremely aggressive growth here last year with sales of 400% over the previous year. We have reaped the advantage of government restrictions on duty free in Vietnam as it has pushed business our way and we are also tied into the tour bus companies, which represent a good portion of our business,” Coates adds. In terms of brand offering at this site, Prestige Supplies has seen growth in the perfume and watches concessions, particularly in mainstream brands such as Bvlgari and Dior in perfume and Armani, Fossil, FIYTA and Cerruti in watches. The company also has a presence in

BORDER RETAILER: PRESTIGE SUPPLIES

Prestige Supplies Inc. has six duty free stores in Mongolia

Laos with its first land border store, which opened in July 2013. This 70-squaremeter store is situated in Boten, on the Chinese border, and focuses on liquor and upmarket tobacco brands such as Lesser Panda, Furongwang, Yuxi International in cigarettes and VSOP, XO in Cognac. “This store is extremely popular with the rich educated Chinese from the Yunnan province,” Coates says. In fact plans are afoot to double the size of the store to include confectionery, focusing on brands such as Godiva, Lindt and Ferrero. Building on this success, Prestige Supplies is targeting a further five stores in Laos over the next 18 months. Prestige Supplies has traditionally focused on liquor and tobacco sales. However, as they increase their stronghold in Southeast Asia, the company has diversified its offering. “In the last two

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

years we have seen many more brands coming on board in perfume and cosmetics, electronics, accessories and food products,” says Coates. This includes sportswear brands such as Adidas and Puma, sunglasses including Chanel and Cartier. The company has continued to expand its liquor concession to include wines such as Santa Carolina, Mouton Cadet, Mapu and Escudo Rojo. Prestige Supplies also has a thriving wholesale arm. “Most of our wholesale supply business is focused in Mongolia where we supply independent operators. Our split is 70% retail to 30% wholesale. As we expand our retail presence in Laos and Cambodia it makes sense to also introduce our wholesale business over the long term” explains Coates. This is in line with Prestige Supplies’ vision to create a chain of retail outlets

across the Asia Pacific region serviced by its distribution and wholesale businesses. “Many companies want a stake in Asia,” says Coates, “but it is a tough market to get involved in. We are one of the first to create such a strong foothold within the region, and over next year our focus is to see existing projects come to fruition and continue to try and diversify our supplier base as and when it is required.“ Coates concludes: “Our long-term aim in Asia is to continue to create the fastest growing network of travel retail outlets across the region and we will do this by creating an environment that adds value to the world’s finest brands from our suppliers and leverages our extensive retail network to offer end customers a unique shopping experience.”

Source: IWSR 2012

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CRUISE TERMINAL: KAI TAK CRUISE PLAZA

LANDMARK KAI TAK

transformation steers new retail experience by

CLAIRE MALCOLM

The Sir Norman Foster-designed terminal makes a strong contemporary architectural statement, and this is carried through into the retail space

Kai Tak Cruise Plaza, the 2,300-square meter retail facility at Hong Kong’s Kowloon’s Kai Tak Cruise Terminal has been on the fast track to development since opening for business late last year

Kai Tak Cruise Terminal is expected to attract international tourists and visitors from mainland China looking for a unique retail experience

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

art of the greater development of East Kowloon, the cruise terminal is situated at the end of what was the old Kai Tak Airport runway, with both the retail space garden terrace and roof garden offering spectacular views of Hong Kong Island and the Kowloon skyline. With the Sir Norman Foster-designed one-kilometer-long terminal building already awarded icon status by the Hong Kong government, the retail operation has a lot to live up to and for Trevor Moore, Kai Tak Cruise Plaza Managing Director and General Manager, bringing the vision to life was the first challenge. “This time last year we were looking at an empty concrete shell, but a number of key partners and huge support from the vendor community enabled us to deliver a stunning environment by the beginning of October 2014,” he says. The terminal makes a strong contemporary architectural statement, and this is carried through into the retail space to enhance the shopping experience. Says Moore: “We inherited a truly dramatic space, 8.5 meters in height with a floor-toceiling glazed wall overlooking Victoria Harbour. It is important that we recognize the heritage of Kai Tak and the special place it has in the hearts of travelers worldwide; and we are determined to honor both. “In terms of design we worked very closely with architects, Llewelyn Davies to accentuate the unique environment, pay homage to the airport heritage of Kai Tak and celebrate its cruise-centric future.”

CRUISE TERMINAL: KAI TAK CRUISE PLAZA

He says that the design uses specific cues to support the historic location with the Plaza Café laid out like a ship’s deck, and the 1925 Champagne Bar named after the year that Kai Tak was granted an airport license, reflecting the earlier days of commercial aviation. The retail offering currently includes category retail presence covering perfumes and cosmetics, fashion and accessories, jewelry and watches, with duty free liquor and tobacco to be added to the mix shortly. As well as targeting cruise passengers with capacity to handle up to 6,000 arrivals and departures per day in the height of the cruise season, Kai Tak Plaza Terminal is expected to attract international tourists and visitors from mainland China looking for a unique retail experience. The Hong Kong Tourism Board has also invested more than HK$15 million (US$1.9 million) into marketing the facility to encourage international cruise lines to add it to their regional itineraries. Says Moore: “It is clear that such an iconic building, boasting a unique rooftop park experience and supported by the Hong Kong government as a tourist destination, Kai Tak has strong potential to attract international tourists. “At this stage in our development, our task is to increase awareness across the various audiences and build the right partnerships to deliver those tourists who want to enjoy these unique benefits.” Six months on from opening, with 120 brands in place and more to come, the early signs are positive, as Moore reports: “The full cruise itinerary only commenced earlier this year so it is a little early to draw any hard conclusions, but our dominant category at this stage is beauty, driven largely by skincare, followed by watches and Jewelry, fashion and accessories and gifts and souvenirs respectively.

Its 1925 Champagne Bar is named after the year that Kai Tak was first granted an airport license.

The Hong Kong Tourism Board has invested more than HK$15 million (US$1.9 million) into marketing the facility, targeting international cruise lines

Shop-in-shop partners include Aigner, Bally, Furla, Hugo Boss, Jinammi, Kate Spade, Lapalette and Montblanc

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

CRUISE TERMINAL: KAI TAK CRUISE PLAZA

“Our complete offer includes food and beverage options with the Plaza Café and our 1925 Champagne bar, both of which have been exceptionally well received by all. We are also looking forward to launching our duty free liquor and tobacco offer in the coming quarter.” Moore is looking forward to the addition of the liquor and tobacco option, which, he says, “will alter things considerably.” The fashion and accessories category is also thriving, mainly through its shop-in-shop partners with Aigner, Bally, Furla, Hugo Boss, Jinammi, Kate Spade, Lapalette and Montblanc all present. “The mix varies considerably from audience to audience. For example, and perhaps not surprisingly, our souvenirs sell much better to cruise passengers than all other customers,” he adds. In fact the importance of having a ‘local offering’ is a crucial reinforce of the sense of place message, as he explains: “It is extremely important for us to reinforce the tourism destination status in terms of product. Consequently, the development of a more comprehensive range and presentation will be a significant focus for our merchandise team in the coming months.” Interaction with and feedback from the various brands has been positive since day one. “I have been hugely encouraged by the feedback and actions of the brands to our venture. From their belief in the vision, through support in achieving our ambitious build program, to their continuing support today, we are very proud and lucky to be associated with all of them,” he says. Marketing the plaza with its diverse customer base requires a multi-pronged channel approach, and the ‘Attract and Delight’ campaign is at the strategic heart of all activity. Moore elaborates: “We are using traditional channels such as print media and, through our landlord, local radio. We are also using social media

where appropriate including developing specific apps to benefit Hong Kong visitors. “We have also secured a network of partners such as motoring organizations, wedding arrangers, travel agents and cruise lines to deliver marketing and promotional messages.” “Once those customers arrive we use a combination of retail, food and beverage, and the unique location, to deliver a memorable experience with events such as our Champagne under the Stars night, which is targeted at overnight cruise passengers. We hope that initiatives such as these will give visitors something to remember and tell their friends about; and encourage repeat visits,” he adds.

Coming up at KTCP A full calendar of promotions and terminal events are planned for H2 2015, including: • Seasonal campaigns on social media • Brand launch events (following on from the success of the latest event which was an exclusive Basel preview by Frederic Constant, held in the 1925 Champagne Bar) • F&B crossover promotions to convert diners into customers • Beauty Fair offering up to thee-hour sessions and including personal tips, product knowledge and expert advice • Get to Know the Wine Maker events • Wine Courses covering a huge variety of wine education topics from traditional tastings through to wine-food pairings • Cruise-specific promotions including exclusive products, instant prize draws, and F&B/retail linked incentives

The retail space garden terrace and roof garden offer spectacular views of Hong Kong Island and the Kowloon skyline

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

CHINA ECONOMIC DEVELOPMENT

SHANGHAI: Rising star of the East China’s most visited city is on a mission to develop its physical footprint and raise its commercial standing

he economic growth rate slowdown in China, which dipped to 7.4% in 2014 after years of upwards momentum, prompted a shift in direction in early 2015 when Shanghai became the first megacity—and province— to scrap its official economic annual growth target. Official policy has migrated towards a focus on quality over quantity, with city mayor Yan Xiong saying that Shanghai will grow “steadily, continue structural optimization and further increase quality and efficiency” as the government turns attention to other crucial metrics such as inflation and employment. A move to increase cross-border transactions and the development of Shanghai’s free trade zone are tempting inwards investment, and Gu Jun, Vice Chairman for the Shanghai Municipal Commission of Commerce, speaking at the March 2015 TFWA China’s Century conference, talked about the city’s position as a “very special window for trade and commerce.” “The size of commerce in Shanghai is expanding. The total commodities sales of RMB 7.4 trillion (US$119 trillion) in 2014 represented an increase of 11.4%. For 12 consecutive years the city has maintained double-digit growth,” he said. Shanghai has long been an advocate—and open to—attracting foreign direct investment (FDI), as Jun explains: “The first foreign-funded retail enterprise was in Shanghai, and one-third of total retail sales of consumer goods in Shanghai in 2014 were from foreign-invested enterprises.” A magnet for world-leading brands from Louis Vuitton and 50

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Chanel to Tiffany, Hermés and Gucci, Jun confirms that the majority chose Shanghai as their China headquarters, or ASPAC HQ. “In the last two years we have begun to see different types of commercial model led by a new round of technological innovation, and commercial growth is [being] transformed,” he remarks. Big data, cloud computing and mobile Internet is leading this charge and, in turn, this is opening up new areas of opportunity, as Jun explains: “Simply put, I think we are faced with unlimited and rare opportunities. This is a city with a lot of potential. By 2020, commerce in Shanghai will enter into a very important stage according to central government positioning. “It will become an international economic, financial trade and shipping center. And this proves that commercial development in Shanghai will continue to expand both in size and scale.” In 2014, 7.913 million international travelers chose to visit Shanghai, and with airport connectivity to 114 international destinations, the continued influx of business travelers and tourists continues to boost commercial revenues and, notes Jun, help to improve overall service levels. “The July 2014 Mastercard report showed that Shanghai was number 16 in the top 20 global tourism destinations, and number one in China,” he says. Shanghai’s future pipeline of major business and leisure projects will further support the city’s ambitious strategy for

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CHINA ECONOMIC DEVELOPMENT

development as major developments like the National Exhibition and Convention Center (NECC), Disney theme park, fourth and fifth runways at Pudong International Airport and renovation of Hongqiao Airport’s east block contribute towards a new city skyline. “We firmly believe that this momentum is going to continue and fast urban development is [another] opportunity,” says Jun. Plans to expand the city footprint from its original 600-square-kilometer ‘core’ to a new total area of 6,000 square kilometers are well underway. “By 2020 it is expected that we will have between 70 and 75 million square meters of planned commercial facilities. In the future we will build 15 municipal level commercial centers and there will be a number of new landmark areas such as the Disney theme park and the new Hongqiao commercial center,” he comments. The city is also extending its metro, with 800 kilometers of track operational within the next five years, reaching ever further outwards into the surrounding suburban communities. With this kind of growth comes a changing consumer, as Jun explains: “Another opportunity for us is the change in consumption structure, with the current level very close to that of middle income countries. “We have more leisure-oriented consumption with different drivers. We think the trend is now shifting from a focus on tangible products to a focus on the intangible as well, and on services. Last year, 30% of expenditure by Shanghai citizens was on services.” Jun reports that consumption in culture, leisure and tourism is on the rise, and is being driven by online activity. Experienceoriented consumption is another vitally important growth area. “I think [the arrival] of more high quality imported products as well as good quality domestic products will have huge potential,” he suggests.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Indeed, the city recently opened a new shopping mall exclusively selling imported products, which has proven to be very successful. Jun also notes the trend towards mobile-oriented consumption. “We need to individualise the needs of our customers and be leveraged by better technologies. “We will continue opening up and innovating in terms of policy through the adoption of new technologies and the introduction of new talents. We will also work to increase the quality of Shanghai’s commerce and influence in the international arena.” Construction of a world-class network of commercial streets with new characteristics is also part of the strategic vision. K11 will be Shanghai’s new landmark district and Jun believes that its dual proposition of art and commerce will set new trends. The city already has an active calendar of events including its shopping festival, Shanghai fashion week and Shanghai International Art Festival, all of which contribute towards its economic growth and market-leading position. This is further supported by new impetus in the development of business-centric services and facilities, such as the new National Exhibition and Convention Center (NECC) which launched this year, and which is the largest in the world. The government is also looking at enhancing tourism cooperation with cities in the Yangtze Delta region, using water tourism, high-speed rail transportation and port development as access points. “We will actively attract domestic and foreign companies specializing in exhibition, hospitality, cruise, tourism information and entertainment to have presence in Shanghai,” it says. In a radical new move, Jun confirms that there are also plans to facilitate the entry and transit visa process. “We will expand the visa waiver program for 72-hour transit tourists to ports, and for certain groups we will waive the tourist visa requirements. Plus we will implement a tax refund program,” he says.

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CHINA AIRPORTS UPDATE

New horizons for

China’s airports A seminal year for the aviation industry, airport operators and retailers across the country are looking to augment non-aeronautical revenues with retail planning at the heart of future growth by CLAIRE MALCOLM

his year, China’s tally of airport projects will grow to 220 locations, including 63 new builds and 88 redeveloped and expanded operations, with a further 20 projects approved for development. The government’s 12th Five-Year Plan, which covers the period 2011 to 2015, has seen airport infrastructure investment exceed US$240 billion (CNY 1.5 trillion) as market demand and new economic opportunities have fuelled increased capacity, domestic and international connectivity, and welcomed new lowcost carriers. Route expansion has been a key strategic focus, with China Southern Airlines and Air China respectively launching 12 and nine new international and domestic routes in 2014. Airport operators across the country are also looking at opportunities to augment non-aeronautical revenue streams, with retail a core element in future planning.

Beijing triangle The new Beijing Daxing International Airport, which is scheduled to open in 2018, will be one of the world’s largest airports, and its commercial product will help meet the Beijing area travel needs of an anticipated 180 million passengers by 2025, up from the 2014 figure of 86 million passengers. “This is far beyond the capacity of [existing] Beijing Capital International Airport (BCIA),” says Gao Shiqing, Vice General Manager, Capital Airports Holding. The new airport will also be part of the integrated network development of Daxing, Tianjin and Heibei airports, with

Construction of the new Beijing Daxing International Airport, scheduled to open in 2018

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Shiqing confirming that each will play a distinct role and offer a differentiated product as part of the regional airport triangle. Currently, BCIA contributes 8% to Beijing’s GDP and accounts for 7% local employment. Says Shiqing: “[This project] will help Beijing and the entire region to become an international aviation center, and better serve the entire country.” In the first phase of development, by 2025 the airport will have capacity for passenger throughput of 72 million passengers and up to 100 million in the long term. Being built at a cost of just under US$13 billion (RMB 80 billion), the short-term master plan includes four runways and total terminal floor space of 700,000 square meters. “Construction began in December 2014 and construction of the terminal building will start this year, with the airport coming into use in 2019,” notes Shiqing. China Southern, China Eastern and Air China will all be based at the new airport and also offer other services such as maintenance, logistics and inflight catering. “We also want to build experiential airport flagship stores,” he adds. A domestic and international aviation hub, the design and future operation has borrowed the best practices of other metropolitan airports. Says Shiqing: “This new airport project is a landmark project for the new century. We will also build supporting facilities and have a commercial office facility, so there will be a huge complex next to the airport to suit the diversified needs of passengers.

Beijing Capital International Airport contributes 8% to Beijing’s GDP and accounts for 7% local employment

CHINA AIRPORTS UPDATE

Emerging Guangzhou Lin Pei Qun, Director of the Concessions Department, Guangzhou Baiyun International Airport Co., is waving the flag for China’s “strongest economic province” and its airport, which had the second highest passenger throughput in the country in 2014 at 54.78 million. “Guangzhou tends to be somewhat neglected and people’s attention is dominated by Shanghai, Beijing and other emerging cities, but it plays a very significant role in China and deserves more of your attention,” Pei Qun says. Served by 230 domestic and international routes connecting 190 cities, 80 of which are international, the new Terminal 2 (T2) is pegged to open in early 2018 with 620,000 square meters of space accommodating 45 million passengers in the design phase, and an eventual capacity of over 80 million. “Commercial space accounts for 5% of total floor area, which is lower than the international average of 8 to 10%, and there will be around 300 shops representing 60 brands,” says Pei Qun. He continues: “The commercial plan [for T2] will be designed according to prevailing trends in the airport retail industry. There have been three stages in airport commercial [development] in China. The first was the responsive commerce stage before 2000, which was characterised by a lack of planning fulfilling only basic passenger demand.

“The second stage was the guidance commerce stage, when most airports started to plan their commercial style and pay attention to things like brand and image. Most Chinese airports are currently at this stage. The third stage is the experience commerce stage and many airports are now aiming for this.” Pei Qun defines this as a combination of service, experience, interaction and entertainment, with T2 designed to meet this new era brief. The total 40,000 square meters of commercial space at the airport is spread across four floors and will include two key international airside commerce zones for T2 covering 7,100 and 2,500 square meters respectively, and similar domestic space of 4,500 and 2,000 square meters respectively, with the tender to be opened in early 2017. “We have over 10 million international passengers but there isn’t enough duty free, so we want to use the T2 opportunity to expand and focus more on this. For the mid-market we are going to do some more work and we want to target some young fashion brands,” remarks Pei Qun. The unique curved design and flow will offer a balanced F&B, retail and brand proposition and “set new standards in airport commerce” with a futuristic feel yet also focusing on local culture to enhance the passenger journey and image of the airport.

The commercial plan for T2 of Guangzhou Baiyun International Airport will be designed according to prevailing trends in the airport retail industry

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

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CHINA AIRPORTS UPDATE

Chongqing upsizes With a population of 33 million, Chongqing is the largest megacity in China and an important southwestern transportation hub. Chongqing’s existing airport already covers an area of 200,000 square meters, has two runways and registered passenger throughput of over 29 million in 2014, with 15.8% growth. It is also connected to over 152 cities and is a major transit hub for flights to Tibet. “We are the eighth biggest airport in China and we hope to get throughput of 35 million passenger this year,” says Gao Ya Li, Chief Manager, Commercial Management Department, Chongqing Airport Group. Construction of the airport’s eastern zone is underway with the new four-storey Terminal 3 (T3) project comprising 500,000 square meters and a third runway to be added. The new terminal will boost passenger numbers to capacity of 45 million when it becomes operational in June 2016. “Currently we have a booming commerce area and retailing area of 6,500 square meters and restaurants covering an additional 7,500 square meters, with different business formats,” she notes. As well as international bestselling brands like Ferragamo, Zegna, Bally and Coach, there is a strong emphasis on traditional brands. Says Ya Li: “Once T3 goes into operation our initial forecast for total passenger throughput will be 35 million. T1 will be used for China Express, T2 for Sichuan Airlines and West Air, and T3 will be used by Air China, China Eastern Airlines, etc.

“We have learned experiences from other domestic and international airports, and in the planning for T3 we have 39,000 square meters for commercial use and the initial stage will cover 26,500 square meters. Retail will cover 11,000 square meters, VIP services 4,500 square meters, catering 8,500 square meters and leisure/entertainment the rest.” Commercial planning for the new terminal features a central shopping district located on the third floor, where transit passengers will also be encouraged to shop, and supplementary districts at the four corners of the terminal, which will feature some unique brands. Ya Li is also eager to encourage more brands to participate in the development of the terminal so there can be a “win-win situation,” as she explains: “We designed the space so that we can have a very good display for international luxury brands so as to enhance the image of this business district. We also take into consideration actual consumption and the purchasing behavior of this district, and we will introduce some light luxury brands and domestic brands to push sales. “In June/July we will start our commercial retail plan followed by catering in August and advertising in September. We will publicize our business plan on all major media platforms and also communicate with the major brands.” “We hope that we can cover international brands, international light luxury brands, and traditional Chinese brands in order to have a very good retail mix so that we can satisfy different customer needs,” Ya Li adds.

Construction of the Chongqing airport’s eastern zone is underway with the new fourstory Terminal 3 (T3) project comprising 500,000 square meters and a third runway

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

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CHINA AIRPORTS UPDATE

Shenzhen Airport has a unique customer profile

Shenzhen and the LS travel retail team place significant emphasis on service as the heart of the luxury retail experience

Shenzhen success Two years on from the development of LS travel retail’s new luxury operation at Shenzhen Airport, the unique domestic model that characterizes this vital southern hub comes with an equally unique customer profile, as Eudes Fabre, General Manager, China, explains, “The customer is not necessarily looking for savings; and indulgence is something that brightens the routine of a trip. “However, there is a shorter dwell time, so the browsing opportunities are lower. We see a lot more repeat guests, so this makes it even more important to have a curated product offer.” Shenzhen and the LS travel retail team place significant emphasis on service as the heart of the luxury retail experience. Says Fabre: “We have a dedicated VIP customer service team, and luxury and fashion are all about constant renewal.” Fabre also flags the importance of the integration of loyalty programs into the marketing mix and the maximization of dwell time to create a travel retail experience in the domestic market that can “transcend the traditional emotions of retail.” Sun Zhenglin, Deputy General Manager, Shenzhen Airport Co., echoes Fabre’s comments, adding: “[Our] commercial operation follows one immutable principle, that change is always there, so we have to adapt to feel the pulse of consumers and the ‘new normal’ of the consumer market, particularly the luxury market.” According to Zhenglin, the airport has invested heavily into IT capabilities, especially when it comes to customer profiling —with over 60% of business travelers—and thus adapting the brand portfolio. Looking at sector trends, Fabre says that new emerging brands are being propelled center stage and impulse luxury is currently the fastest growing category. “There are new boundaries to explore with the boom in outbound travel. Younger shoppers increasingly want a sense of differentiation. We also see newfound interest in quality and less tolerance with poor after-sales service,” he says.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

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Analyzing the China travel boom A summary of the latest trends in Chinese travel and shopping behavior from consultancy group i2i Group China by HIBAH NOOR

lexander Glos, CEO of i2i Group China, the consultancy group specializing in analyzing Chinese market trends, has shared the latest research from leading companies on outbound travel, shopping behavior and consumer preferences. Intercontinental Hotels Group, in collaboration with Oxford Economics, has published The Future of Chinese Travel: The Global Chinese Travel Market, providing insights to the future of Chinaâ&#x20AC;&#x2122;s booming tourism market based on official national, aviation, and hotel data sources. In 2014, Chinese travelers took 67.5 million trips, with this number expected to grow to 97 million by 2023. Outbound tourists currently favor short-haul destinations in Asia, led by Hong Kong, Macau and Thailand, but as household incomes rise and travel restrictions are eased, Chinese travelers will shift their focus to long-haul destinations in North America and Europe. For the ten-year period from 2013 to 2023, the U.S. is projected to attract the most Chinese long-haul tourists with 3.43 million arrivals, followed by France with 1.22 million arrivals and Germany with 909,000 arrivals. With Chinese overseas shopping estimated to account for 50% of global luxury sales by 2025, brands and marketers must develop strategies to connect with Chinese consumers even if they have no immediate plans to have a presence on the mainland, according to the report. One brand leading the way is Michael Kors, which is launching globally integrated campaigns that inspire Chinese travelers to purchase their products both at home and while abroad. Meanwhile, China Dailyâ&#x20AC;&#x2122;s chart of outbound travel behavior during the recent Spring Festival holiday points to a growing preference among Chinese tourists to forego traditional family gatherings in favor of venturing overseas to avoid domestic travel congestion. Data from the China National Tourism Admin-

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

istration (CNTA) puts the number of outbound travelers during the period at 5.19 million, which represents a 10% year-on-year upswing, continuing a three-year growth trend since 2013. Furthermore, the CNTA reported that Chinese tourist spending during the holiday period would reach RMB 140 billion (US$22.5 billion), driven by travelers flocking to South Korea to purchase fashion and beauty brands inspired by popular dramas and celebrities, and countries such as Japan attracting more visitors thanks to easing visa restrictions and increasingly favorable exchange rates. Turning to e-commerce trends, iResearch China’s recently published 2014 China Ecommerce Report captures the rapid adoption of mobile commerce on the mainland in 2014, as well as forecasting impressive growth over the next four years. For 2014, mobile shopping in China topped US$148 billion (RMB 929.7 billion), representing a 239% jump from 2013. This was more than quadruple the growth of online shopping, which increased 49.8% over the same period to reach US$447 billion (RMB 2.8 trillion). Mobile commerce shows no signs of slowing and will continue on its trajectory over the next four years, eventually surpassing US$719 billion (RMB 4.5 trillion) in 2018. As mobile shopping grows rapidly, marketers are establishing a presence on WeChat as it becomes the gateway for brands to reach China’s mobile consumers. In other online news, GO-Globe has analyzed China’s domestic third-party online payment industry in relation to consumer purchasing preferences. The data confirms Alipay’s dominance of the online payments sector with 51% overall market share as well as a commanding lead over second-ranked Tenpay in mobile app payments with a monthly active user base of 62.8 million versus 1.77 million. Consumers prefer to use third-party online payments (18.9%) over online bank (16.6%) and credit card (15.5%) methods. Brands with dedicated e-commerce channels such as Coach have already embraced Alipay, Unionpay, and even cash on delivery to cater to online shoppers in China.

Alexander Glos, CEO of i2i Group China

In social media news, Kantar has released the 2015 edition of the Kantar China Social Media Impact Report, providing insight on China’s evolving social media users based on statistical analysis of two million Weibo posts, 711 million WeChat views, and interviews with 66,000 online and in-person respondents across 60 cities. A recurring theme in this year’s report is the confirmation of WeChat as China’s top social media platform with 72% usage, well ahead of Qzone (53%) and Weibo (40%). While WeChat’s numbers represented around 7% growth, both Qzone and Weibo saw usage slump by almost 20% from 2013. Brands are turning to WeChat to start to learn how to best connect with mobile users on China’s now-dominant social media platform.

(Source: Intercontinental Hotels Group/ Oxford Economics)

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

GUEST COLUMN

From travel retail

TO TRAVEL

E-TAIL

Peter Mohn, CEO and owner of consumer research specialist m1nd-set, delves into a future where tech-savvy travelers pay by smartphone and post store pictures online by

PETER MOHN, CEO and Owner, m1nd-set

T Peter Mohn, CEO and Owner, m1nd-set

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

echnology: friend or foe for duty free and travel retail? That is the question which, for many companies working in the travel retail industry, still seems unclear. The possibilities with present-day technology are without question positive for our industry—if companies have a strategy and invest the requisite resources into concrete, tangibly beneficial solutions for consumers and, most importantly, maintain, update and anticipate future developments. However, a half-baked approach to today’s technology is not likely to seduce the tech-savvy, trendy traveler of today. Our research indicates that in 2015, the mobile payment market will grow by 60%. Are you/your retailers equipped to take mobile payments? Making the purchase as easy as possible for the consumer means tearing down another barrier to purchase and, as consumers become more accustomed to mobile payments, before long this will become their preferred—even only— payment method. Retailers will need to be ready. Smartphone users are using their phones at every opportunity and our research illustrates that 84% are using them while in physical stores and 62% of shoppers say they use their smartphones to assist with the shopping process. The essential take-away is that mobile phones will facilitate the sales process thanks to the immediacy with which consumers can purchase. And given that a vast majority of airport shopping is based on the impulse purchase, the mobile phone, both as a means for payments and as an engaging interactive media, is perfectly suited to the airport shopping environment.

GUEST COLUMN

As chart 1 shows, the majority of travelers today are constantly online when it comes to organizing their travel, whether business or leisure, booking flights, hotels, rental cars or even events. Unsurprisingly, almost all travelers (97%) use the Internet as a source of information for their trip.

However, if we look at how they utilize the online space for their duty free research or purchasing, the results show a significant indifference and lack of engagement among consumers. When we asked travelers in Europe whether they would use the Internet for duty free shopping the next time they travel, only 20% said they would definitely or most probably do so. The interest in the duty free online services increases to around 30% of consumers who use online services specifically for purchasing. When we look deeper into the results, we see that more than 50% of leisure travelers are posting photos on social media; we also see that around 60% of travelers seek information from instore merchandising displays. While these findings may seem disconnected, the opportunity lies in connecting the dots and utilizing the information to engage the consumer, getting them to interact with fun, innovative or unique merchandising displays that lead them to post. The key buzzwords when it comes to marketing to consumers in general are “make it fun,” “deliver value” and “engage the consumer.” The mobile marketing space is no exception. With customers increasingly demanding and expecting a more connected experience, it is essential that retailers and brands today adopt a holistically digital thinking approach, from pre-travel online to in-airport mobile solutions as well as in-store with digital merchandising and digitally empowered staff. For more information on this consumer study or any other research by m1nd-set, e-mail info@m1nd-set.com.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

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RetaileR News: Dubai Duty FRee

Promotions from Jameson and Lindt; at any given time, DDF runs over 500 promotions weekly throughout its retail operations

package

The complete

From new products and stores to renovations, promotions and staff training, Dubai Duty Free continues to surprise and delight travelers looking for their next duty free purchase by

RYAN WHITE

ubai Duty Free (DDF), the world’s biggest singleairport retailer, has been busy of late. In addition to preparing for the opening of Concourse D in August of this year, the operator has renovated many of its existing stores, opened new stores, listed a number of novel products, put on stunning promotions across essentially every category and continued to emphasize staff training as a means of ensuring excellence in customer service.

Up to snuff Colm McLoughlin, Executive Vice Chairman of DDF, told GulfAfrica Duty Free that ensuring customers are happy starts even before they speak to a member of the staff. “We place a great deal of importance on the ambiance of the stores because it plays a role in shoppers’ comfort level,” he explained. McLoughlin cited the renovations to DDF’s Terminal 2 stores as an example where more of a walkthrough shopping area was created. Since work was completed in 2014, a 10% increase in sales has been recorded for those locations. Terminal 1 of Dubai International Airport (DXB) is currently undergoing a major refurbishment and the DDF Arrivals operations have been relocated. The retailer’s Public Shops (landside) in Terminal 1 are also being renovated, as are the Public Shops in Terminal 2. 668Gulf-africa Duty&free & travel retailinG TFap may 2015 ASIA DUTY FREE TRAVEL RETAILING MAY 2015

Big things coming “Of course, I can’t mention the work being done on our stores without noting that Concourse D at Dubai International is scheduled to be fully open and functional from the third quarter of this year,” McLoughlin said. The New Concourse D will cater to all the non-Emirates flights, with a capacity to handle a staggering 18 million passengers annually. DDF will have a total retail area of 7,000 square meters in the new space. “We have exciting plans in place for this new retail area,” McLoughlin noted. “The opening of the new concourse will definitely cater well to the growing passenger numbers and further drive Dubai Duty Free’s sales.” And there are other recent new additions in terms of stores. The Jet Aviation terminal at DXB resumed full operations in July 2014 after a rebranding, and the terminal now offers airside duty free shopping—courtesy of DDF, of course—serving crew and passengers using the private and charter jet facility. Also completed just last year is DDF’s Fashion Boulevard in Concourse A, which is dedicated to Emirates’ A380 fleet. “We added Hermes and Chanel shops to the existing Ferragamo and Gucci shops,” McLoughlin explained. “They are doing very well.”

Making it an experience At any given time, DDF runs over 500 promotions weekly through-

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RetaileR News: Dubai Duty FRee

Dubai Duty Free’s Liquor shop at Dubai International Airport’s Concourse A

Keeping it fresh In addition to promotions, DDF makes a point of keeping its offering fresh. Already in 2015 the operator has listed new products across essentially every category: Carven, Eisenberg and Montale in Perfumes; Gucci in Cosmetics; Swarovski in Pens; Caterpillar phones, Rollei cameras and Blaupunkt headphones in Electronics; and Vilebrequin Men’s swimwear in Fashion. “As in past years, we also have many Dubai Duty Free exclusive launches spread across various categories in agreement with various suppliers,” McLoughlin added. Notable exclusive launches yet to come include: Lindt Airplane Napolitains 750g; Godiva Mousses Meringue; Johnnie Walker Blue, Black and Gold Label Dubai Duty Free editions; the Elie Saab Resort Collection; Sisley Soir De Orient; Boss bottled Intense; Ralph Lauren Oud; Tom Ford Noir Extreme; and seven more worldwide exclusive launches in the Fragrances category.

Where credit is due

out its retail operations. “Some of the most successful promotions this year have been part of the Dubai Shopping Festival campaign,” McLoughlin said. In fact, DDF has renewed its support for the 2015 Dubai Shopping Festival as a Strategic Partner. Now in its 20th year, the Festival is the largest shopping and entertainment extravaganza in the Middle East. Drawing visitors from across the globe, the event kicks off Dubai’s calendar of events each year with a wide variety of activities and promotions. This year, the Dubai Shopping Festival was held from January 1 to February 1. “Liquor, Perfumes, Confectionery and Electronics have been the key categories where promotions tend to work very well for us,” McLoughlin said. “The mechanics that work best are price offs, buy one get one frees, gifts with purchases and win a prizetype promotions.” In terms of upcoming promotional activity, McLoughlin cited Dubai Summer Surprises, Chinese-focused promotions specific to Union Pay cardholders and various Liquor category promotions as the most prominent. Dubai Summer Surprises is part of Dubai Festivals and Retail Establishment’s Summer Retail Promotions program. Last year, during the promotion’s five-week period, customers spending Dhs500 (US$136) and above had the chance to win Dhs20,000 (US$5,445) worth of DDF shopping vouchers every week, or a total of Dhs100,000 (US$27,225) in vouchers over the entire course of the event. And given that high-spending Chinese travelers generally contribute a great deal to DDF’s overall sales, the operator has teamed up with Union Pay to offer 5% off on varied spend limits across different categories such as Liquor, Tobacco, Perfumes, Food, Fashion, and Costume and Precious Jewelry. The promotion is currently ongoing until June. Finally in terms of promotions, DDF is currently running a host of buy two get one free offers on whisky. On the other hand, vodka fans currently receive 20 or 37.5 cl bottles free with the purchase of various brands. Price offs are also ongoing in Liquor, and DDF has a special allowance awareness program currently running in Arrivals.

870Gulf-africa Duty&free & travel retailinG TFap may 2015 ASIA DUTY FREE TRAVEL RETAILING MAY 2015

Customers interested in the above products, or any of the items on offer at DDF’s stores for that matter, can rest easy knowing that trained staff are on hand to advise them on their purchases. “Our staff are among the most highly trained in the world, I believe, as we know that a trained workforce is extremely vital to the success of the company,” McLoughlin explained. In 2014 alone, DDF put on a total of 907 training sessions— from product seminars and beauty advisor training to induction programs and skills training—with over 15,000 participants. “Whether it’s renovations, new stores, the products we sell, experiential promotions or staff training, Dubai Duty Free is united in its commitment of giving travelers a shopping experience that they can’t get anywhere else,” McLoughlin concluded. “I’m fortunate to work with a very dedicated team, many of whom have been with us since the very beginning. I am also lucky in having a dynamic boss in H.H. Sheikh Ahmed bin Saeed Al Maktoum. President of Dubai Civil Aviation Authority and Chairman of Dubai Duty Free, who provides me with great support and encouragement. “Dubai has become a world center of aviation in relatively short order and I’m proud of the role that Dubai Duty Free has played in that success,” he added.

Colm McLoughlin, Executive Vice Chairman of Dubai Duty Free, was named a recipient of the Irish Presidential Distinguished Service Awards in 2014 for the Irish abroad, making him one of a select group of people, and the first Irish person living in the UAE, to be recognized by the Irish government for his outstanding contribution to Irish business and communities abroad. He is pictured here with the Irish President, Michael D, Higgins and Taoiseach Enda Kenny (seated) at an official ceremony held at Aras an Uchtarain, the official presidential residence in Dublin.

EDITOR’S CHOICE

Fun and fabulous novelties A dozen hand-picked desirables to celebrate this month by HIBAH NOOR

1. Tateossian Carbon Fibre Bracelet: This reinforced, lightweight bracelet, made from black woven Italian leather, has a carbon fiber clasp, giving it a modern yet classic look

4. M&M’s Mug: This fun ceramic mug is available in either the red or yellow M&M’s popular character. The mug features a snappy quote and comes with a 45g packet of M&M’s Choco, showing how coffee and chocolate are a great match

2. Toscow Morning Dew jewelry: Inspired by sparkling dew under morning sun, Morning Dew features Toscow’s signature colorful crystals and freshwater cultured pearls. Rose, amethyst, apple green, sky blue and lemon crystals are set among natural pearls crafted on rose gold-plated mounting

5. Pandora Sparkling Garden jewelry: The daisy is depicted as a single sculpture or a field of wild blooms in a series of sterling silver charms, stacking rings and stud earrings featuring bright cubic zirconia

3. Tintamar Mini Vanity Bag: New for Fall/Winter 2015 is a functional and fun mini-version of the brand’s popular women’s vanity bag. This neat cosmetic purse, with two transparent compartments and a pocket for a powder compact, comes in four colors, plus a whimsical owl print

6. Ashima superslim cigarettes: Chinese International Duty Free introduces a superslim variant in the Ashima line. Launched as the first superslim targeted at the Chinese consumer in duty free, the 6.89mm wide stick design is a distinctive blend of Chinese style in modern form

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

11 7

7. Cabeau Better Umbrella: The creator of luxurious yet affordable travel products unveils the Better Umbrella, providing 30% more coverage with the ingenious design of an offset and form-fitting J-Handle (retail price: US$29.99) 8. Holland Heritage Shaver: With the introduction of Philips’ 9000-series shavers, Capi and Philips have teamed up to create a unique Dutch-made edition especially for airport travelers. To emphasize the Dutch heritage of both companies, the famous Delft blue print is used on the packaging 9. Harman/Kardon Esquire Mini stereo speaker: This portable, all-in-one speaker is ultra-thin, enabling you to take your music anywhere. It features wireless Bluetooth stereo streaming, dualmicrophone conferencing system with echo and noise cancelation technology, and ceramic-coated metal front aluminum housing

10. Cross 2015 Year of the Goat Collection pen: This handcrafted, special-edition addition to the US brand’s Chinese Zodiac Series is etched with the image of three goats to symbolize good luck and good fortune. It comes in 23ct heavy gold-plate or high-gloss black lacquer with 23ct gold-plate 11. Haribo Goldbear Box minis: The German confectionery brand’s best-known line, Goldbear, comes in new packaging: a bear-shaped box filled with 35 mini gold bear bags (10g each) 12. TRU VIRTU Leather Line Cash&Cards wallet: This wallet, made by Dolphin Innovations of Germany, combines fine Italian leather and aluminum in one product. By coating the aluminum surface with leather, this patented wallet protects cards from illegal scanning of personal data, demagnetization, as well as water and sand

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

BEAUTY: MOROCCANOIL Moroccanoil’s Dry Body Oil forms part of the US brand’s growing body care range

ASIA PACIFIC

Moroccanoil catapulted to fame with its signature hair oil treatment

ASPIRATIONS by

HIBAH NOOR

Hair and body care brand Moroccanoil is forging ahead with plans to break into the booming Asia Pacific travel retail market

oroccanoil is introducing its hair and body care brand to the Asian travel retail market with a debut showing at the TFWA Asia Pacific this month. The brand whose signature Moroccanoil hair oil treatment has proved popular in the Americas and Europe, is now focused on developing the Asian market. The company entered the travel retail channel in October 2014 in Denmark with Heinemann Duty Free in Copenhagen Airport, but it has more than five years’ experience working in duty free in Tel Aviv, where the brand’s co-founder Carmen Tal first discovered the oil treatment. Now, the company intends to build brand awareness of its antioxidantinfused, nutrient-rich, innovative formulas in Asia Pacific by attending the TFWA Asia Pacific show in Singapore. Moroccanoil’s Director of Retail Sales John Gates, explains: “Our strategy in the Asian travel retail market is to further establish our global brand awareness within the emerging Asia Pacific markets and provide our global consumer shopping convenience with our brand in the already-established travel retail points of sale. This includes Hong Kong, Tokyo and Beijing.” He adds: “By exhibiting at the TFWA Asia Pacific show we would like to achieve brand exposure and awareness where Moroccanoil is positioned to distribute

and open travel retail within the Asia Pacific marketplace.” The firm is introducing new products in Asian travel retail in 2015. As it’s the first time the company has tackled the Asian beauty sector, it has strategically defined a merchandising assortment that will be new to this market and soughtafter by the consumer. In terms of customers, Gates observes that Chinese customers are of the “utmost importance” to the company, adding: “All markets are important to our brand, especially emerging markets, as they present a great opportunity to introduce high quality, performance-based beauty to an entirely new demographic.” In addition to offering oilinfused hair care products, the company also delivers a complete head-to-toe experience to the travel retail shopper. This includes its iconic Moroccanoil Treatment in a TSA-approved travel size, as well as an assortment of hair care products and the full Moroccanoil Body product line-up. Asked about the brand’s successes over the past year, Gates notes the introduction

and launch of its global retail strategy in premium department stores, as well as establishing meaningful relationships with travel retail partners and businesses. Speaking about the challenges ahead, he says: “The biggest challenge the company faces in travel retail today is needing to frequently adapt to the ever-changing, fast-paced consumer market; however, what is exciting is that travel retail offers one of the greatest opportunities for our brand to reach more consumers globally.” The outlook for Moroccanoil in travel retail is bright. Plans this year and beyond call for further expansion within Europe and North America, as well as the upcoming launch in Asia Pacific markets.

Moroccanoil Body Soufflé body moisturizer ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Travellers looking for a delicious â&#x20AC;&#x153;after check-in snack-inâ&#x20AC;? will be delighted by the arrival on shelf of the new Kinder Miniatures collection of the three best-loved Kinder products. Presented in premium light card pouches, exclusively developed for travellers, with tempting images of the contents and strong branding, the Miniatures trio will appeal as a snacking as well as a sharing purchase for passengers of all ages. Please visit us at TFWA Singapore, Booth B2 / N1 and discover the whole portfolio.

GUEST COLUMN

Striving for retail excellence Patrick Bouchard, Managing Director of Global Travel Retail at Puig, expands on the fragrance group’s Asia strategy PATRICK BOUCHARD, Managing Director of Global Travel Retail, Puig

Nina Ricci’s Les Délices limited edition

sia Pacific has been a key strategic priority for Puig for a few years now, driven right from the very top of our organization. Our team has been challenged to deliver accelerated growth and significant gains in market share in both domestic markets and travel retail across the region, while supporting our retail partners in the overall category growth as a pure-player specialist in fragrances. Historically, Puig’s strengths have been in Europe, the Americas and the Middle East. However, our more recent Asia Pacific strategy has put intense focus, and commanded major investments, into the region. As a result, we are rapidly becoming an innovative and credible player here also. Prior to our travel retail growth plan for the region, stating clear value market share objectives as well as the appropriate strategies to accomplish those ambitious objectives in the Puig way, we did not have a dedicated travel retail business unit for Asia Pacific. Over the last two years, we have sought to put all the basics in place here, Patrick Bouchard, including building a Managing Director of Global Travel strong, experienced Retail, Puig and diverse team. We have also thoroughly

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

explained the growth plan to all our retail partners so they are aware of our objectives and through which strategies we intend to achieve them, and the response has been extremely positive. Puig knows how to create excitement and growth for the fragrance category, as we have already demonstrated in other regions. We are starting now to deliver this expertise also in Asia Pacific. For example, Puig is well-known in the industry for delivering high-profile launches and interacting with consumers at point of sale through retailtainment, and that is something that we are now successfully translating to key locations in the region such as Singapore Changi Airport. Puig Travel Retail is also benefiting from the investments behind our brands in key Asian domestic markets, which is allowing us to super-charge our growth in the channel across all sub-regions: North and Southeast Asia, the Indian Subcontinent and Oceania.

Growth of Puig’s Asia team Puig’s travel retail team in Asia has more than tripled in size over the last two years. We have concentrated on appointing sub-regional specialists—for Greater China, South East Asia, Oceania, etc. For us, it’s important to have a blend of Europeans who understand Asia and Asians who understand Europe, bringing integrated experience between the consumer and our brands and the category to support Puig’s ambitions in Asia. We’ve also tried to find individuals with experience on the retailer side, as this additional perspective is invaluable. Currently we’re in the process of reinforcing our field resources—Beauty Advisors and Field Supervisors—as part of our Retail Excellence drive.

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For inquiries regarding Maui Jim Sunglasses, please contact Giles Marks, Director of Global Travel Retail at gmarks@mauijim.com. ÂŠ2015 Maui Jim, Inc.

GUEST COLUMN Puig is reinforcing the Valentino brand by launching Valentina Pink Limited Edition

We are also giving novelty to Nina with the Les Délices limited edition. And we’re also reinforcing the Valentino brand by launching a new and luxurious limited edition, Uomo Edition Noire, as well as Valentina Pink Limited Edition. With each, we are seeking to significantly upgrade the quantity and quality of our exposure in all key locations across the region.

Opportunities and plans

Business performance in 2014 Puig Travel Retail has enjoyed exceptional growth in Asia Pacific over the last three years, albeit from a small base. In 2014, business in the region was somewhat slower than the previous two years. One of the primary reasons for this was the disruption to the tourism industry of Thailand, caused by the political unrest. Thailand is a large market for us due to its passenger mix which is very attuned to the fragrance category, and with tourism down by double digits in some months in 2014 there was a hit on sales. Fortunately we are seeing recovery in 2015. The other market to slow significantly is China. The government anti-corruption measures and new regulations on tour operators have impacted travel retail sales—not just of fragrances but of all luxury goods. That said, Puig is still seeing high double-digit growth in the region and growing significantly faster than the category, therefore gaining market share while contributing to our retail partners’ business growth.

Highlights of 2014 2014 was an excellent year for Puig in terms of new product launches. Many of these were developed with the Asian consumer in mind, including Prada Candy Florale and Nina Ricci’s La Tentation de Nina. Both launches have proven extremely popular, as they have scents in tune with Asian tastes and strong marketing concepts around our customary storytelling. Paco Rabanne has been an interesting brand for us in Asia —its appeal hasn’t translated universally throughout the region to date but we’re just starting to see real momentum build. As a team, one of the biggest highlights was Invictus winning Most Innovative New Product at the DFNI Asia/Pacific Awards for Travel Retail Excellence. Puig was also one of the three finalists for the Best Supplier of the Year Award. Great recognition for the Puig team from our retail customers and a true measure that we are on the radar in Asia Pacific.

The opportunity in Asia Pacific is clearly huge. The fragrance category is under-represented, and also Puig is currently underrepresented in the travel retail channel both versus our worldwide presence and our share in the domestic markets in the region. There are a number of specific opportunities which we feel remain largely untapped for us. Puig is increasing its focus and investments in China’s domestic market as a way of capturing the Chinese consumer not only in the local market, but also in travel retail in Asia. This reinforced focus will help us develop our brands in all key locations, since the Chinese represent the largest passenger numbers across the region. We continue focusing also on South Korea as the largest fragrance market in travel retail in the region, and eyeing opportunities in Southeast Asia where we are increasingly capitalizing on the strength of our brands in the domestic markets. Australia is a market that is fragmented and poses a number of challenges due to domestic discounting and online sales. That said, it is still a very attractive market with a well-established fragrance culture. The key to capitalizing on it will be through a greater focus on novelties in travel retail and other unique elements to differentiate it from the domestic offering. India is also intriguing. We’re starting to see both Delhi and Mumbai pick up, and with the passenger numbers potentially passing through these airports, and the increasing Indian middle class, these locations are full of opportunity. Puig brands are very well established in the domestic market and this gives us the possibility, and the obligation, to be really ambitious. In terms of brands, we still have the opportunity to bring Paco Rabanne up to the same leadership position it enjoys in other regions. Invictus has more than met expectations in the region and has given us another big new string to our bow. The concept has proven to be strong but equally the scent has been a hit as well. Continuing to tell the Invictus story in the region, while leveraging on the already successful Million universe, will therefore be a major opportunity to drive growth. Growing the Carolina Herrera brand, especially in Southeast Asia and the Indian Subcontinent, along with the fashion side’s progressive expansion in Asia, is a key opportunity for us.

In-store activity As part of our point of sale and Retail Excellence strategies, we are always looking to invest in the image of our brands in the region, be it through temporary animations or—most importantly—through permanent personalizations. We’re in an extremely busy first semester of 2015 in this respect, with a major launch on the Nina Ricci brand, L’Extase. 78

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Puig is known for delivering high-profile launches and interacting with consumers at point of sale through retailtainment, something that the company is translating in key locations such as Singapore Changi Airport

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BAGS & ACCESSORIES: FURLA

Premium potential

Furla is planning to release a travel retail exclusive version of its popular Piper bag

The evolving Chinese consumer is a ‘work in progress’ that the travel retail industry needs to get a handle on to drive penetration and spend. Gerry Munday, Global Retail Director, Furla, explains by CLAIRE MALCOLM

remium—or ‘accessible luxury’—brands are becoming a key growth driver for the Chinese domestic market, according to Gerry Munday, Global Retail Director at Furla. They are attracting both the upwardly mobile and city-dwelling post-luxury elite who are now looking for less ostentatious brands. Munday cites the popularity of Shanghai Tang as a perfect example of how the Chinese are becoming more sophisticated, confident and increasingly savvy about their fashion choices, and thus less interested in luxury logo branded goods. There is also keen interest in avoiding the tax-heavy premium pricing seen in the domestic environment, and more than two-thirds of luxury spending by Chinese travelers in 2013 was overseas. According to research by Global Blue, shopping is a crucial element of travel plans for 82% of Chinese travelers. This is reinforced by mid-2014 data from online booking site hotels.com, with a quarter of Chinese holidaymakers choosing their next international destination based on the quality of shopping available. Says Munday: “Another reason the Chinese want to buy premium and luxury brands abroad, apart from price differentials, is the guarantee of authenticity, which is why ‘Made in Italy’ labels outrank ‘Made in China’ ones.” But this doesn’t mean that airports are the natural winners when it comes to capturing spend, as she explains: “The Chinese are very intelligent, experienced shoppers and they will look for best brands at the best prices; shopping downtown, in outlet malls and at the airport—in that order.” Munday believes that conversion is contingent on ensuring that the shopper is aware of airport savings, and both retailers and brands need to work harder at communicating the benefits. “I also think it’s a mind-set issue. When the Chinese are travelling, part of the reason behind visiting the destination is the shopping opportunities; and the airport just isn’t necessarily top of the list,” Munday says. 80

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Education and investment in awareness of airport-available brands via the airport’s own website (working alongside retailers and brands to “beef up the information available”) top her checklist. Says Munday: “With 73% of consumers using the Internet to get information about luxury goods purchases before they travel and buy, we need to appeal to them before they reach the airport, and be able to offer them authentic quality brands combined with the ambience, service and experience that they seek.” Differentiation at the airport is also key to driving penetration, but there are certain restricting factors, as Munday explains: “Fashion brands tend to have two or three global collections per year and a huge amount of investment goes into these, and travel retail is a reflection of the global offer. “It is far more difficult, cost-wise, for a fashion brand to develop a travel retail exclusive line, especially for high value items.” Furla is one such brand working to create a point of difference, with plans for a travel retail exclusive version of its popular Piper bag. “The problem is that for so many of us, just being at the airport is a massive investment that we have to recoup before we think about investing even more in exclusives,” says Munday. Communicating the price savings available at airport locations is another area where there is room for improvement. Explains Munday: “I’m not talking about discount signs all over the place, simply that fashion prices in travel retail should generally offer at least the VAT/tax saving over the price on the corresponding domestic market. “It’s not always communicated very well, and this is part of an overall desperately needed consumer education message – whatever their nationality. I believe there is still masses of confusion about what travel retail is, what duty free is, what tax free is, what travel value is. Most regular Joes haven’t got a clue what they can or can’t buy, let alone about price savings.”

â&#x20AC;&#x201A;WATCHES: WENGER

Wenger eyes

100 new designs Wenger forecasts that 100 new references will be launched in 2015

Rapid expansion of the watch range is providing a stepping stone into travel retail for the company by

FAYE BARTLE

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Attention to detail and exemplary customer service are hallmarks of the Wenger brand

enger is undergoing a collection revamp that will present its popular watch range in a new light and bring more than a 100 new designs to market. “The Wenger watch division has grown in importance within the Wenger portfolio, which also includes the well-known crown jewel branded travel gear products,” says Arianna Pozza, General Director, Wenger Watch SA. “This year we are renewing the watch range with a completely fresh and up-to-date style with more than 100 new references forecasted to launch in 2015.” Founded in 1893 in Courtételle, Western Switzerland, Wenger has a rich history and prides itself on producing quality watches and travel gear. Attention to detail and exemplary customer service are hallmarks of the brand. “Out forte is Swiss-made watches with outstanding style,” says Pozza. “We target a wide audience with an affordable price point that ranges from CHF99 (US$103) to CHF298 (US$312), and all our products come with a three-year warranty.” When it comes to growth in the travel retail channel, Wenger is taking a considered approach. “Duty free is one of our key pillars of distribution for 2015 as part of our goal to build consistent, highly qualitative and volume-oriented distribution channels around the world,” says Pozza. “We are in negotiation with some of the best known players in the channel, although I cannot disclose any details at the moment. What I can say, however, is that it’s key to understand the channel and figure out a way to serve the customer with a product at the right price and via a sales system that is beyond expectation.” Wenger launched the first products in the new watch collection at BaselWorld. Among the highlights is the Attitude watch collection, which comprises a wide range of watches in stainless

The Urban Vintage has an appealing hint of retro

The new Urban Classic chronographs reveal a blend of classic taste and modern features

steel with a 41mm diameter for the Day-Date models and 43mm for the chronographs. This is combined with a functional dial in white, black and blue. Each Attitude watch is equipped with Swiss-made quartz movements and is water resistant to 100 meters. The extensive Edge watch collection comprises two lines, Edge Index and Edge Romans, and each of the designs spotlight Swiss-made know-how. Furthermore, the leitmotif of the collection is the 43mm-diameter steel case, scaled down to 34mm for the women’s model, with softly rounded lines and four small tone-on-tone screws outlining the perimeter. The range offers several finishes, from pure metal to yellow or pink gold color, applied using the PVD technique, available in both monochrome and two-tone for a striking look. The distinctive bezel shiny rim is the standout feature, however, which inspired the collection name. Striking design, vibrant colors and assertive lines define the character of the Roadster collection, while new Vintage and Metropolitan styles have been added to the Urban collection. Vintage has a hint of retro and Metropolitan is grander with styles offered in shades of pure metal, yellow or pink gold, or with a black PVD finish. The watch version comes with a 41mm-diameter steel case, which increases to 43-mm for the chronographs. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

FASHION: PAUL & SHARK

Less is more for Paul & Shark As the legacy brand continues its Asia expansion, the traditional market entry model of big and bold is being replaced by a preference for the understated by

CLAIRE MALCOLM

The company’s latest innovation is a traveling embroidery machine that enables the brand to offer added value with in-store personalization

he sheer size and scale of market opportunity in Greater China is commanding Andrea Dini’s attention these days, but the Paul & Shark CEO is also leading the charge into other Asia destinations with places like Vietnam becoming a new home for the heritage brand. Established hotspots include Macau, Taiwan and Singapore, and with an agreement to open in Cambodia about to go live, the brand is putting pins in the map across the region. “Our Singapore store owes around 20 to 22% of its turnover to Indonesian customers and so we also hope to be in Indonesia within the year, which is another market with good potential,” Dini says. Brand awareness in Asia comes from two different channels, as Dini explains: “We have locals who have probably seen the brand either in Hong Kong or

The high profile CDF Mall at Haitang Bay is home to one of Paul & Shark’s most popular stores

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Singapore, and they are the kind of people who travel very often to Europe, so they see us either in the airport or downtown in major capitals. “The other channel is driven by the Chinese, who, when traveling, have a package of information about the brands that they like, and those are usually the brands that are the most well developed in their home countries.” While brand image is strong, the challenge of optimizing on physical brand presence at airport locations is a permanent headache. “Space constraint in travel retail is always an issue, and particularly in this part of the world, where not all airport retail operations are really conceived, developed and built to host so many brands,” notes Dini. “Sometimes you have a lot of food and souvenirs but very small space for luxury retail. However, a number of the newer Chinese airports have really put some thought into allocating suitable space for luxury retail,” he adds. This segues neatly into the area of space design. Says Dini: “We have developed a simple way to virtually double the number of items we can display at the airport. Our brand architects have done this in a very nice way with a symmetrical bar and tables with storage cabinets below, so we can maximize on available space. “The issue of storage is even more important than in-store space. Sometimes

Andrea Dini, CEO, Paul & Shark

it’s very far away and if a customer has only a couple of minutes to make a purchase, they won’t wait.” Dini also reports that the more sophisticated Chinese and Asian customer is shying away from imported in-your-face superbrands and actively looking for alternatives to “les loud” items. Having local ambassadors endorse the brand is also key, as Dini explains: “When we initially entered the Chinese market, our ambassadors were external, as achieving the American or European dream was important then. “We now look for local, well-known actors or Korean pop stars, who are familiar and well-respected in the Chinese culture.” But it’s a different story in Vietnam and Cambodia, with Paul & Shark following the Chinese marketing model of a decade ago. “We also see a difference with product preferences. In new markets they are looking for a much ‘louder’ product, but we have also begun to produce a part of our collection without any obvious logo as customers are really starting to buy for themselves and not to show off,” Dini says. Paul & Shark’s latest innovation is a traveling embroidery machine that takes up a weeklong residency in a local store, giving clients the opportunity to have their favorite items personalized in less than two minutes.

Visit us: basement 路 stand EExhibition 14 Visit us: Basement 2 路 Stand E14 路 TFWA Asia2 Pacific & Conference 2015

FASHION: LACOSTE

French

Almost 12 months on from the launch of its new travel retail strategy and the ‘Fewer, Bigger, Better’ vision, Lacoste reports a positive first year by

CLAIRE MALCOLM

savoir-faire supporting

Lacoste future vision

verwhelmingly positive results both at a commercial level and from a customer experience and brand desirability standpoint, have confirmed that Lacoste’s decision to switch direction, was the right one. “The ‘Fewer, Bigger, Better’ direction to make Lacoste the leader in the premium casual wear market is still very much our mantra for 2015 and beyond,” says Jean-Louis Delamarre, APAC CEO & Global Travel Retail, Lacoste. The redevelopment of Jakarta’s Soekarno–Hatta International Airport into a premium standard concept has also translated into increased sales, according to Delamarre, who also notes that with Indonesia’s current ‘hot market’ status very much front of mind, Lacoste’s Jakarta operation has been justified in enlarging the existing facility both in terms of square meterage and product categories.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Other Asia Pacific markets registering strong performance include Thailand. Says Delamarre: “Kingpower Thailand has been an amazing partner from the beginning, and one with whom we have been growing at a fast pace over the last few years in both their airport and downtown stores. “Although 2014 was a challenging year in Thailand due to the political turmoil, the retail situation seems to be very much back on track.” The key growth market in the region for the brand is, unsurprisingly, China, and Lacoste is looking at new mainland opportunities. “Although China duty-free spending is still not as consistent compared to neighboring countries in the region, with the Chinese government looking at options to retain the spending of their nationals in China, it is most definitely a market to be on top of,” confirms Delamarre.

FASHION: LACOSTE

The bestselling product in the key Asia Pacific markets remains the iconic L1212 polo shirt. “Lacoste was the first brand to invent this classic garment more than 80 years ago. Having said that, Lacoste is a true lifestyle brand offering a wide variety of product categories,” says Delamarre. “In terms of purchasing differences, it is more about the colors and the cut; this is where we see differences from one market to another, and we consider ourselves well-equipped to cater for many different customer profiles,” he adds. Year-on-year duty free and travel retail sales performance registered double-digit growth in 2014, a “hugely encouraging” figure that presents Lacoste with “plenty of scope for further improvement.” New developments and trends impacting business in the region once again links into Chinese traveler numbers, as Delamarre explains: “Looking again at the PRC market, only a small percentage of the population is traveling today, which leaves huge market potential for brands to seize in the years to come from both an ASPAC and global perspective.” Working with its airport partners to drive sales through successful promotional activities as well as customer service, is an area where Delamarre sees room for further development. “Staff training is something we want to improve in the years to come as it is only through repeated training that we will ensure the right message is delivered to our customers. Staff incentive programs are also key to driving sales and increasing productivity,” he remarks. With a number of exciting retail projects in the pipeline for 2015, Delamarre is looking forward to the Singapore show. He says; “Singapore, as well as Cannes, are a great chance for us to talk about our brand and its amazing heritage.” “As with Cannes, in Singapore we will be showing very limited products—our SS15 Made in France capsule collection and our inflight collection—and focusing on the brand itself to present our elegant heritage and French savoir faire.”

The bestselling product in the key Asia Pacific markets remains the iconic L1212 polo shirt

In TFAP Singapore, Lacoste will be showing very limited products including its SS15 Made in France capsule collection and inflight collection. The focus will be on the brand’s heritage

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

Mars ITR is a leading player in the confectionery category. We combine insights, vision and global strength with powerful brands to create fantastic in-store opportunities. Contact your local account manager and see what we can accomplish together!

Let’s face it, if consumers can’t resist M, how can you?

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They sell as good as they taste

SPOTLIGHT ON TFWA AP EXHIBITORS

Braun introduces cutting-edge consumer technology German consumer products brand Braun is introducing some of its latest innovations at the TFWA Asia Pacific Exhibition in Singapore (booth H11). The company is introducing a new version of Satin Hair Brush with natural bristles for medium to fine hair. At the touch of a button it releases millions of ions to give more shine and reduce frizz for instant smoothness, Braun said. The combination of natural bristles and seamless bristles makes brushing extra gentle, protecting the hair. The new-generation Series 9 shavers is said to ensure the best skin comfort due to the world’s most efficient shaving performance, and is proven on three-day beards. Two specialized middle trimmers in combination with two cutting elements deliver much more cutting power than before and can easily handle problem hairs for a close, smooth shave, according to the firm. The Silk-épil 9 epilator features design innovations. The wider, flexible head removes more hair in one stroke for faster epilation and the wider, longer and deeper tweezers increase the feeding and plucking performance and remove even the shortest hairs. Silk-épil 9 can be used in the bath or shower and offers a gentle speed setting, which is described as ideal for beginners or sensitive areas.

The new Satin Hair PowerPerfection Collection consists of four ultra-powerful, compact and ultra-light hairdryers that combine an optimum drying temperature with high air volume for a fast finish. In addition, the Satin Hair 5 and Satin Hair 3 PowerPerfection hairdryers are equipped with ionic technology to ensure visible frizz reduction.

Braun’s new Silk-épil 9 epilator

Scorpio races into Singapore with new timepieces The Yamaha Factory Racing VR|46 Watch Collection by TW Steel is inspired by the MotoGP biking superstar, Valentino Rossi. This collection of eight watches with 45mm carbon cases comprises four chronograph models and four three-hand models with black, blue, white or yellow silicon straps. The official launch takes place on the Scorpio stand on May 12 at 17.00 when Scorpio’s Sales & Marketing Director Richard Kennedy will explain the strategy behind the new introduction. The Aviator watch brand sees new men’s and women’s collections that focus on the latest dial-colour and finish trend. For men, there are 12 new chronograph models, including three with various dial colours and finishes. For women, Aviator introduces five new models, combining blue and purple dials with interchangeable straps in a range of colours, finishes and materials. UK fashion brand Karen Millen offers a range of contemporary classic watches featuring contrasting elements with leather straps. In Singapore, three new models are being introduced – all updates to existing designs. The first two are strap versions of the popular small, round model, one in polished stainless steel with white dial and strap, the other finished with rose gold plating, chocolate colour dial and strap. The third watch is another version of the women’s cocktail watch with silver dial and pearlized azure blue strap. All come with Swarovski Elements crystals. The latest Time Design Time Teaching Watches for boys and girls aim to make telling the time fun by including easy-to-use and understand activities. Also aimed at children, the Ani-snap Mix and Snap comes with a snap-on wristband and three interchangeable fun watch heads: dog, owl and penguin. In the jewelry category, Pierre Cardin is expanded with two new watch and jewellery set families in a range of fresh colors 90

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

and designs. These include new pendant and earring sets, six new bangles and bracelets, plus a new interchangeable pendant set concept. Meanwhile, Danish designer Dyrberg Kern is offering buyers three new bangles finished in gold plating with black and white enamel detailing. Said Kennedy: “Watches and jewelry are core to our portfolio and I am really thrilled with the new and refreshed collections now available. Adding The Yamaha Factory Racing VR|46 Watch Collection by TW Steel is a real coup for us and I look forward to telling everyone more about it on Tuesday at our launch event.”

Scorpio Worldwide is highlighting new watches and jewelry at the TFWA Asia Pacific Exhibition (stand D9).

Michael Kors crafts jet-set eyewear for Fall Michael Kors’ eyewear collection seeks to capture sophisticated style and cutting-edge craftsmanship for Fall/Winter 2015-2016. Inspired by the designer’s signature jet-set sensibility, this collection showcases a variety of designs, from cat’s-eye shapes to sporty aviators and vintage-inspired frames. The clean lines and soft curves feature custom-made materials that recall the same refinement of the ready-to-wear collection, the brand said.

Distinctive design elements include: the Signature Plaque, an enamelled, lustrous logo accent; the Punch Charm, a sculptural logo detail crafted from crystalline acetate; and Slim Chic, a group of frames realized in thin metal silhouettes and inspired by Michael Kors’ sleek jewelry and watches.

This collection is inspired by Michael Kors’ appreciation of the jet-set life

Paul & Shark to bring personal touch to Singapore show Italian luxury lifestyle brand Paul & Shark is returning to the TFWA Asia Pacific show this year with its embroidery machine to enable visitors to collect their own personalized polo shirt (stand D11). Travel Retail Director Catherine Bonelli said that the machine was “incredibly well received” at the TFWA World Exhibition in Cannes last year. “It takes just a few minutes to embroider a name or message on a polo shirt, which in Singapore we will have for men and

Paul & Shark’s Spring/Summer 15 Smart Casual apparel line

women,” she enthused. “It is such a fantastic way to show customers how we can create something different for travel retail outlets and as a result of this feature in Cannes, we are now in talks with several retailers about introducing a machine into Paul & Shark airport boutiques. With our embroidery machine present in Singapore, retailers have the option to have an entirely personalized item.” Since the TFWA World Exhibition last October, Bonelli has agreed new listings for the brand worldwide. Paul & Shark now has some 45 points of sale in travel retail, across three continents and it is steadily building distribution, she noted. “Since Cannes we have opened a number of new locations, including a fantastic new 250-square-meter boutique at Haitang Bay, where sales are exceeding all our expectations. In March we opened a 32-square-meter shop-in-shop at Larnaca Airport and our location at Brussels Airport moved to a bigger and better location within the luxury concourse; this is a good example of where the retailer now understands the need for Paul & Shark to be in the right location.” At TFWA Asia Pacific Paul & Shark will be showcasing its spring/summer 2015 collection. With a new focus on travel retail, the collection highlights Polos of the World, which includes different country flags embroidered on polo shirts. This capsule collection seeks to address customers from all over the world. The new collection also includes the new Smart Casual line; the Luxury Collection of high quality materials allied with handmade tailoring featuring a new golden Paul & Shark Luxury garment logo on a solid blue background; the Sportswear line, combining style and performance; Capri, the summer capsule collection; and the new Travel Shirt that is presented in a bag made of the same fabric and color.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

CONFECTIONERY: LINDT

Achieving a new level of elegance LINDT’s Swiss Pralines selection is available in various formats to suit different budgets

LINDT is showcasing its new POS fixtures that center on the Swiss chocolate brand’s premium gifting offer by

HIBAH NOOR

LINDOR tubes contain six assorted seasonal flavors

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

INDT of Switzerland has emphasized its commitment to the Asia market as it prepares to showcase its Swiss travel retail exclusive product portfolio during the TFWA Asia Pacific exhibition this month. The company is seeking to lift its market share in this dynamic yet diverse region, and build on its considerable progress in Asia in recent months. The launch of its DIVA range in Thailand, Malaysia, Singapore, Japan, Hong Kong, Macau, Taiwan and the Philippines was a particular highlight, the company said, while the opening of its LINDT boutique in Kuala Lumpur was hailed as elevating the brand’s presence in the region to a new level of elegance. Similarly, considerable investment in the region into its Brand Ambassadors program (which offers customers advice and tastings so they can learn more about the brand and choose the perfect gift) has done much to boost sales, the Swiss chocolatier noted. Peter Zehnder, Head of the Lindt & Sprüngli global duty free division, said the Asian market clearly presented the travel retail sector with some impressive opportunities. “The Asian passenger is spending less than in the past, and price is becoming more and more important. As a highly approachable category, confectionery can benefit from this trend,” he noted. Zehnder said LINDT would debut its new POS furniture, featuring enhanced gifting cues and highlighting the Master Chocolatiers at the show. “In 2015, we will be focusing on increasing our POS footprint in the region, particularly in mainland China, Hong Kong and Singapore. We’re aiming to increase awareness of the LINDT brand, and reflect the premium quality of the product in the highest quality presentation at POS.” Speaking about Asian consumers,

he observed how travel retail exclusive products would play a key part in the regional strategy. “Asian customers are highly connected through social media, and their experiences are shared and followed. To be able to grow in duty free, we need to offer something special that sets travel retail apart from the domestic market. Confectionery is often an impulse buy, and it’s at the point of sale where we can make the difference. In the premium sector particularly, its important to enhance the consumer experience to tempt customers to buy,” he said. Commenting on LINDT’s presence at the show, Zehnder added: “The Asian market is particularly interested in brands with heritage and history, and this event is the ideal opportunity for us to shine a spotlight on the expertise of our Swiss Master Chocolatiers.” Gifting is an important motivation for purchase in Asia, and LINDT’s own research conducted by m1nd-set found that 47% of Asian travelers who purchase chocolate at the airport do so as a gift. At the Singapore show, LINDT will be highlighting the suitability of its ranges as gifts. To this end, its Swiss Pralines selection contains “seductive fillings—beautifully decorated and carefully packed by hand.” They are described as a premium gift for chocolate connoisseurs and enthusiasts of dark and milk pralines. The Praline selection is offered in a range of formats and sizes to suit different travelers’ budgets. The Asian spring launch of the striking pink LINDOR Limited Edition Spring tube will be followed with the Asian debut of the turquoise summer/autumn tube. The popular 400g tubes contain smooth melting LINDOR chocolate balls in six flavors chosen to complement the season, including two new recipes, coconut and strawberry cream.

BELGIAN CRAFTSMANSHIP

No two Duc d’O truffles are the same. The reason for this is very simple. The light chocolate mousse is sent on a journey through a large bed of chocolate flakes. Dancing over them, the truffles wrap themselves in the wildness of Belgian chocolate. Only then are they ready to find their way into civilisation. That’s why all Duc d’O truffles are indecently delectable. But each that little bit unique.

CONFECTIONERY: LEONIDAS

Delicious diversity by

FAYE BARTLE

Expanding its range with limited editions and impulse items at a range of price points is providing Leonidas, the Belgian chocolatier, with a welcome boost in sales An example of an eye-catching Leonidas POS at Eraman departures store at Klia2

For its Easter 2015 collection, Leonidas has chosen a fresh, modern look in a variety of bright colors and delicious flavors

emand for more snacking and on-the-go confectionery, specifically dark chocolate fruit combinations, has led Leonidas to launch a limited edition Summer Praline Selection. Coming to market in Q2 and Q3, 2015, the company will debut its new range at the TFWA Asia Pacific Exhibition & Conference in Singapore. While travel retail is a relatively new and young division within the company, high growth is expected in the next few years. “For Asia we will focus more on gifting boxes for a variety of spending powers and occasions throughout the year, as well as smaller portion sizes to make the product as widely accessible as possible and create new price points within the offering,” says Nelly Sannwald, Travel Retail Manager, Leonidas. In February, the company unveiled a number of innovative products to mark the Chinese New Year and the upcoming Moon Cake Festival in autumn is another important gifting occasion. “Chinese travelers are becoming savvier about offers in the international context and therefore there is a need to cater specifically to this passenger group, which is growing,” says Sannwald. “Special initiatives are well received, however ROI is still lacking behind any other initiative, such as those launched in Europe.” A healthy spread of key markets is

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

giving the company an opportunity to expand. “Europe is our core market with brand awareness especially high in BeNeFrLux and Greece,” says Sannwald. “Singapore, Hong Kong and Israel are also showing high demand for premium chocolate products.” When it comes to trends, the company is leveraging an appetite for exclusives. Sannwald says: “There is an increased demand for more premium gifting in the category, which is why Leonidas is set to launch its popular truffle selection in an exclusive packaging for travel retail.” Looking ahead, taking note of how consumer preferences are evolving is helping Leonidas to enhance the proposition. “Overall the category is developing positively,” says Sannwald. “Confectionery is increasingly recognized as a footfall driver within multi-category stores. Nonetheless, there is still a lot of untapped potential to use the category to increase basket spend per passenger. As a result of the positive developments within the category, competition for space is becoming fiercer – that goes for permanent as well as promotional space – which can make it more challenging for smaller brands like Leonidas.” She continues: “One of the biggest challenges recently is the labeling requirements in the EU, India and other regions, which require producers to adapt packaging

formats in a clever to way to make it work for as many markets as possible—sometimes at the expense of the end consumer reducing the products on offer.” Focusing on making the most of the current assortment with smart marketing is giving the company a competitive edge. As Sannwald says: “We will work on high profile promotions that go in line with the new product launches, and we are excited to include some more high quality products into the travel retail range to continue to excite our customers.”

Nelly Sannwald, Travel Retail Manager, Leonidas: “Chinese travelers are becoming savvier about offers.”

CONFECTIONERY: NEUHAUS

Acting on

impulse The Asian confectionery market is evolving, as the self-indulgent treats sub-category becomes more popular in the region

he sub-category of self-indulgent treats is gaining ground in Asia’s buoyant confectionery market, according to Philip Geeraert, Director International Sales at Belgian chocolatier Neuhaus. The market, which has in the past been characterised by high-end chocolate gifting by the Japanese, Koreans and Chinese as well as the mass-market sector driven by Filipinos, is now evolving, he believes. As the company prepares to exhibit at the TFWA Asia Pacific show, Geeraert explains: “Neuhaus is ready for Singapore. We are always impressed by the dynamic nature of the Asian market. We believe Asia is a very diverse and often sophisticated market in which high-end chocolate is very appreciated. Most Asian countries have a very strong food gifting tradition. Key nationalities such as Japanese, Korean, Chinese, etc, drive the high-end chocolate market, while on the other hand, countries like the Philippines drive the mass-market. Now, self-indulgence is gaining importance across the continent.” To that end, Neuhaus has completed its elegant travel retail gifting range with a selection of Neuhaus impulse gifts as well as a new Smurfs travel pack. The impulse range consists of a selection of the region’s most appreciated chocolates in a small elegant pack. Lines will include the brand’s top-end chocolate such as the Cornet d’Ore and the Caprice & Tentation. “This impulse range gives more flexibility to merchandise, is easy to understand and retails at a competitive price,” he notes.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

The exclusive Smurf travel box contains 24 crispy pralines with a new filling

Meanwhile, the new Smurf travel pack is in line with the Neuhaus tradition of working with Belgium’s cartoon heritage characters such as Tintin. The suitcaselike packaging was specially developed for the travel retail customer and is targeted at both young and old consumers. “It is a perfect gift,” says Geeraert of the new travel box. “The exquisite chocolates are filled with crackling milk chocolate and cookies – and they are so good that many customers will keep a box them for themselves.”

The exclusive Smurf travel box contains 24 crispy Smurf pralines with an updated filling. The chocolates are filled with crackling milk chocolate and cookies. Big Smurf, Smurfette, Brainy Smurf and Jokey Smurf are immortalized in these milk chocolate pralines. The striking keepsake box uses two different visuals on each side of the travel case, to enhance its giftability. The Smurfs collection is ready for shipment from mid-June 2015 – not long after the TFWA Asia Pacific show, where the product will be on display.

LET’S TALK GIFTING. INTRODUCING

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Made with a whole hazelnut, layers of creamy chocolate, delicate crisps and twice the size of the iconic HERSHEY’S KISSES. They are ideal for gifting occasions, which make up 60% of confection purchases* in Travel Retail. So let’s talk. Together we can meet consumer demand and grow your confection category. First Shipments August 2015

Contact your Hershey Business Manager or learn more at HersheysTravelRetail.com. * 2014 CIR Global Shopper Study

UNLOCKING SNACKING CREATING EASE OF SHOP MAXIMIZING IMPULSE

CONFECTIONERY REPORT

Appetite

for

success From packaging upgrades to smart promotions and personalized products, a selection of leading confectionery suppliers offer a taste of what’s to come by

FAYE BARTLE

s duty free shoppers seek more affordable gifts and treats, confectionery is rising in popularity. In a bid to stand out from the crowd, suppliers are striving for creative packaging and product solutions that inspire the new wave of sophisticated shoppers. “We have been doing a lot of consumer research to optimize and fine tune the packaging of Duc d’O,” says Erik De Troyer, International Sales Manager, Baronie NV/SA. “In September we will be launching upgraded packaging for the entire portfolio with larger, more qualitative visuals highlighting the premium quality of our products. “Furthermore, we will be emphasizing more clearly the Belgian origin and authenticity of our products and making it easy for passengers to find what they are looking for thanks to color coded product denominations. As a result, the range will become more eye-catching on the shelf, which will have appositive effect on sales.” Currently, travel retail represents 20% of Duc D’O’s business and the brand has built a global network with doors in Europe, Asia and the Americas. “Duc d’O was recently listed in DFS Hong Kong, which is a major breakthrough in the region,” says De Troyer. “In addition, the brand has been rolled out strongly within Heinemann with

The Ritter Sport 65g Tower is one of the latest additions to the travel retail exclusive range

listings in Budapest, Vienna and Johannesburg with Novosibirsk and Sydney in the pipeline. We are also entering the cruise sector with Starboard.” Another major player enjoying a surge in activity is Ritter Sport. The company’s travel retail business is growing significantly, up 35% in 2014 compared to 2013. As such, the channel is becoming even more important to the brand. “Our main growth drivers are distribution, travel retail exclusive packaging, tailor-made POS solutions and promotional activities that target the consumer,” says Katharina Tyrolt, Global Travel Retail Manager, International Division. Recent additions to its travel retail exclusive range include the Ritter Sport Choco Cubes Tin and the Ritter Sport 65g Tower, which are great for sharing or snacking on the move. “We will be conducting major promotional activities at Frankfurt and Vienna airports together with Gebr Heinemann this spring that will offer a brand new shopping experience to the consumers,” says Tyrolt. “Details are not to be revealed yet, however, I can say that the traveling theme has never before been approached in such a modern and fresh way.” Anthon Berg’s new Chocolate Coffee Liqueurs, with travel retail exclusive packaging, includes Irish Coffee with a warming whisky, a French Coffee with sweet and tangy orange liqueur, a Cuban Coffee with white rum and a Mexican Coffee with a shot of tequila

ASIA DUTY FREE & TRAVEL RETAILING MAY 2015

scale than ever before. That’s why we believe that now it is the right time to launch a coffee version of our successful chocolate liqueur bottles. “The two other products in the range—Chocolate Liqueur Bottles and Chocolate Cocktail Bottles, are the two top selling products in the Anthon Berg Travel Retail portfolio—so we believe that our new product Chocolate Coffee Liqueurs is a profitable way to expand.”

Hitting the sweet spot

Chocolat Frey’s Swiss Selection Finest Assorted Biscuits now come in a new box with a premium look and feel that is ideal for gifting

Suppliers bite back While confectionery may not enjoy the higher price tags associated with fashion and beauty, the category is just as competitive when it comes to raising its profile. “Confectionery is becoming more entertaining, especially compared to other classic categories,” says Claudia Rosenberg, Head of Travel Retail, Chocolat Frey. “Looking at perfumes and cosmetics, it has been the same picture for years and years now, with new launches, extremely high profile POS material and free cosmetics for sampling. I don’t see a huge amount of creative promotions and consumer engagement, however. Of course, these categories are much bigger and more important than confectionery, but the creativity I see clearly within the confectionery and liquor/wine category surpasses that of any other.” At TFWA Asia Pacific Exhibition & Conference the company is unveiling its ‘Message for you’ initiative—boxes of chocolate pralines featuring more than 600 personal messages on the label that customers can mix and match to create their own unique statement. Customers simply pick the three ‘statement pralines’ of their choice to create his or her preferred message before placing them into to a specially-designed box with a transparent window. Three unique box designs provide an opportunity to further tailor the gift to suit different sentiments or occasions. Anthon Berg is also finding new ways to engage with shoppers. Indeed, the company is running a promotion at selected airports to support the launch of Chocolate Coffee Liqueurs. Built around the brand’s Generosity concept, the promotion invites traveler to ‘spin the bottle’ to be in with a chance of winning a plane ticket to one of the four countries that the liqueurs originate from (France, Ireland, Cuba and Mexico). The competition will be hosted on Anthon Berg’s Facebook page, which has more than 100,000 fans. As for the products behind the promotion, Travel Retail Director Peter Dige says: “The combination of coffee and chocolate is an evergreen but coffee itself has also had a comeback and has been reintroduced as a fine food on a much broader

When it comes to boosting sales, smart additions and brand extensions that tap into subtle shifts in consumer tastes are going down a treat. “Passengers are looking for authentic food products that really deliver on taste,” says De Troyer. “In Europe, Duc d’O will be launching new snacking and ‘food-on-the-move’ concepts, growing its product range for different occasions and attracting younger consumers in the process.” Anthon Berg is unveiling a new addition to its Marzipan Bar range: the Marzipan Bar Nougat box with eight pieces. “The Marzipan Bar Original has been a bestseller for over 130 years on domestic markets,” explained Dige. “The Marzipan Bar Nougat is the best selling product next to the original. It is a line extension we believe will be very successful in the range, which also counts the Marzipan Bar Cognac and the Marzipan Bar Extra Dark & Cocoa Nibs.” A rise in seasonal and personalized packaging as well as storein-store concepts (such as pop up stores) are three top trends to watch out for, according to Ritter Sport. In response, the company is looking to broaden its travel retail exclusive assortment to keep pace with demand for quick-sell products that offer something special for the customer. With so many new developments, there is enough to satisfy even the largest of appetites and although it remains to be seen who will emerge as the breakout brands for 2015, these four suppliers are certainly ones to watch.

Duc d’O’s 20% discount activity at Changi Airport departures, Terminal 3

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

WHISKY REPORT

Black Bottle blended Scotch whisky is staying true to its name with a newly released all-black bottle and a reformulated recipe

The spice of life Asia Duty Free speaks to four companies with a stake in Asia Pacific’s duty free whisky category, each with its own ideas on how to grow the business by RYAN WHITE

rom new variants and novel blends to the next evolution of the entire category, there is no shortage of ideas on the table to grow the whisky business in Asia Pacific. We spoke with Distell, La Martiniquaise, Edrington and William Grant & Sons to find out what they’ve got planned for the region’s travel retail market this year and for the TFWA AP exhibition in Singapore.

Back in black Distell-owned Black Bottle blended Scotch whisky is staying true to its name with a newly released all-black bottle and a reformulated recipe designed to bring the taste closer to the Graham brothers’ original 1879 conception. In fact, the brand was originally offered in a black bottle and it was only as a result of glass shortages during World War I that there was a switch to the familiar green bottle. Along with the above changes, Black Bottle is now available in duty free, in a 1-liter variety, exclusive to the channel. “Our core focus has been on Europe, the U.S. and South Africa but we do have a seeding strategy in Asia Pacific that will assume greater momentum at a future date,” explains Robyn Bradshaw, Distell’s GM Marketing, Duty Free/Travel Retail. “We are currently showcasing Black Bottle at Schiphol Airport in Amsterdam as this is an important travel hub for intra-European and cross-Atlantic fliers.” Duty free being the powerful brand showcase that it is, Distell has also established the Black Bar, a very visible and prestigious branded shop-within-a-shop environment at Schiphol’s Lounge 1, where travelers can be treated to a fully integrated sensory experience at the invitation of on-site promoters. “Not only do shoppers get to taste the trademark blend of malt and grain whisky,” says Bradshaw, “but they watch our very compelling mood video, wearing special headsets. At regular

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Distell has established the Black Bar, a branded shop-in-shop environment at Schiphol’s Lounge 1, where travelers can be treated to a fully integrated sensory experience

intervals, aromatic notes are released into the space, expressing the Black Bottle nose—from its fresh, floral fragrance to whiffs of new-sawn oak and a hint of smoke, spice and honey. This is a really impressive and fully immersive experience for shoppers.” While Black Bottle is relatively new to Asia, Bradshaw notes that the response to date to the new bottle and blend bodes well for the brand. “We are finding it has strong appeal amongst established connoisseurs as well as newcomers to the category, given its versatility as a whisky to be enjoyed on its own, as well as in tall drinks and cocktails,” she explains.

Going for the gold Label 5 blended Scotch whisky recently expanded its range with a new expression called Label 5 Gold Heritage. This new offer will be unveiled at TFWA Asia Pacific in May. Label 5 Gold Heritage has been created to delight Scotch whisky lovers who are looking to explore Label 5’s character in more depth. Graham Coull, Label 5 Master Blender, crafted a unique and rich blend of exceptional whiskies that includes malts aged for more than 20 years. Created with passion and care, Label 5 Gold Heritage presents a unique profile that lies between the smoky and peated flavors of the old malt whiskies and the creamy vanilla notes of the grain whiskies. The smooth character that is the trademark of Label 5 whiskies has been accentuated with subtle woody hints and spicy notes. “Label 5 Gold Heritage is a personal achievement for me,” explains Coull. “Building on the traditions of Label 5, I have hand-selected Label 5 Gold Heritage has been created to delight Scotch whisky lovers who are looking to explore Label 5’s character in more depth

The packaging of Label 5 Gold Heritage echoes the iconic Label 5 Classic Black and conveys a premium look through the use of the gold and brown colors

whiskies from different ages and casks which marry together to produce a wonderfully balanced blend. The result is an exceptionally smooth whisky loaded with fruit, spice, warm vanilla oak and subtle smoke, which offers a unique taste experience.” Recently awarded a Gold Medal at the prestigious San Francisco World Spirit Competition, the quality of Label 5 Gold Heritage has been acknowledged by whisky experts. The packaging echoes the iconic Label 5 Classic Black and conveys a premium look through the use of the gold and brown colors. The packaging reflects perfectly the warm and inviting atmosphere of whisky tasting moments. Sabah Bouaka, Brand Manager Whiskies at Label 5 owner La Martiniquaise, tells us that Label 5 has been performing very well in Asia Pacific. With 800,000 liters sold in 2014 in the region, the brand is enjoying double-digit volume growth. “Malaysia, Vietnam, Singapore and Taiwan are countries where Label 5 has benefited from a longer presence,” she explains. “For several years now, we have gained stronger positions in Australia, New Zealand and China. We have high ambitions in duty free, with a focus on China and Pacific.”

Hong Kong and Seoul Incheon. “Despite being traditionally strong Cognac markets, we’re seeing a trend towards Scotch consumption in these locations,” Hill says. Asian countries such as China, Singapore and the sovereign state of Taiwan represent a significant portion of The Macallan’s sales. “Where we see future opportunities is with some of the nationalities with emerging middle and affluent classes,” Hill says. “Thailand, Vietnam and India are markets where economic growth is fueling increased travel, and with it opening up new consumers for premium and luxury brands to target.” Edrington recently debuted The Macallan Masters of Photography: Elliot Erwitt Edition at selected Asian airports. The launch gave whisky connoisseurs an exclusive opportunity to own a rare piece of Macallan history with just 134 bottles available across Singapore Changi Airport and Hong Kong International Airport through DFS, and at Taiwan Taoyuan International Airport. In January and February of this year, major promotions focusing on The Macallan Whiskey Maker’s Edition X-ray packs were launched in Hong Kong, Singapore and Taiwan. Created exclusively for travel retail, The Macallan Whisky Maker’s Edition: X-Ray Collection showcases artist Nick Veasey’s critically acclaimed style of X-ray photography on The Macallan’s Six Pillars. The limited edition offering is presented in a special gift box that interprets the essence of The Macallan. Einar, one of the Highland Park Warrior series: Following a launch at Singapore Changi Airport, Edrington is ramping up activities at locations across the region

Number one and still growing Ryan Hill, Managing Director of Asia Travel Retail at Edrington, tells us that the sales performance of The Macallan in Asia Pacific continues to be strong. “The levels of investment we are putting behind the brands in travel retail reflects this, and the brand continues to be the number one single malt in the region,” he explains. A key focus for The Macallan remains Taiwan, the largest market for Scotch whisky in Asia. The Macallan is one of the best-selling single malts in this sovereign state, enjoying a large following and extremely strong brand loyalty. Edrington is also seeing good performance at locations such as Singapore Changi,

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WHISKY REPORT

Edrington recently debuted The Macallan Masters of Photography: Elliot Erwitt Edition at selected Asian airports

“Building brand visibility and strengthening consumers’ engagements are key to the brand’s growth strategy, which we will continue to drive through promotional activations throughout the key airports in Asia,” Hill notes. As if this weren’t enough, Hill adds that Edrington has been extremely pleased with the rollout of the Highland Park Warrior Series in travel retail. Following an Asia first launch for the range at Singapore Changi Airport, Edrington is ramping up activities at locations across the region. In terms of what to expect at this year’s TFWA AP, at press time it was still too early for details. However, Hill promised “strong innovations” from The Macallan for visitors to this year’s trade show.

Oh Captain! My Captain! William Grant & Sons (WG&S) seeks to take a leadership position within global travel retail as the “Category Captain” for single malts. “We see a real opportunity to become the go-to supplier in terms of offering the most impartial and considered advice that can help to grow the entire whisky category and generate positive returns for our partners,” says Justin Weston, Managing Director of Global Travel Retail (GTR) at WG&S. “With Glenfiddich, The Balvenie and now Kininvie, we have a leading position within single malts,” explains Sarah Catton, GTR Category Marketing Manager at WG&S. “This is a critical, fast growing and high-value category. For continued success and long-term growth, we need to develop category management solutions that help to grow the entire category, not just our brands. These solutions must be shopper and consumer-focused and help passengers navigate easily and effectively through what can be a complex and confusing assortment.” For WG&S, this will mean working closely with the operators to secure a fair share of space for single malts in-store. Done well this can help increase average spend per head and generate more profit for all involved, according to Catton.

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Regional Director Asia Pacific GTR at WG&S Scott Hamilton concludes: “We are beginning to offer a true travel retail range across our portfolio, but to be able to best present the products that we now have we also have to offer international passengers something new and unexpected in the form of highly innovative brand activations. By doing this we give our brands, and our retail partners who are offering them to passengers, the best chance for success. Match that level of excitement to great packaging and highly giftable exclusive products and you start to create a truly compelling offering. This effect can be further maximized if we can control an entire area of the store and have it dedicated to our brands. This is part of the reason we are so excited to have now opened our first ever branded shop-in-shops for Glenfiddich and Hendrick’s with DFS at Changi. We look forward to seeing the results that they can produce.”

The Kininvie distillery was opened in July 1990 by the granddaughter of William Grant, Janet Sheed Robert

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SPIRITS: COMPANY NEWS: DIAGEO

The Striding Man greets travelers as they visit the Johnnie Walker House™ in Taoyuan International Airport

Exclusive and

luxurious Craig Norwell, Regional Director - Diageo GT Asia-Pacific, tells us how Diageo achieves yearon-year growth in Asian travel retail by focusing on exclusive, super-premium brands by WENDY MORLEY

The makers of luxury single malt Scotch whisky Mortlach have launched a liquid especially for travellers

Q: How has business been for Diageo in the Asia-Pacific region in the past year? A: We are delighted to see growth in our year-on-year business in Asia-Pacific, driven by a strategy of premiumisation and differentiation. Scotch whisky is our leading category, with luxury brands that appeal to affluent Asian travelers. We have seen a hugely successful rollout of HAIG CLUB, released in partnership with David Beckham and British entrepreneur Simon Fuller, which we introduced at scale across the region in October. Q: Have you launched any new products? Any travel retail exclusives? A: The launch of a series of global travel retail exclusives has also helped drive growth in the region. JOHNNIE WALKER GOLD LABEL RESERVE EXCLUSIVE TRAVELLERS’ EDITION, inspired by the spirit of travel and celebrating shoppers’ own journeys, features a striking gold-colored metallic coating embossed with a travel-inspired image of the world map. 104

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In time for the Chinese New Year, we launched a limited edition design for JOHN WALKER & SONS KING GEORGE V Blended Scotch whisky. The elegant design marks the 80th anniversary of the awarding of the Royal Warrant to John Walker & Sons. The limited edition pack was crafted as a visual celebration of the arts and crafts movement that blossomed during the 1930s. In the luxury Single Malt category, the launch of travel retail exclusive MORTLACH SPECIAL STRENGTH has also helped boost our sales in the region. This new variant is aimed at travelers who enjoy super deluxe whisky and seek rarity and quality in their liquids. Two other expressions of MORTLACH are also now available in travel retail and domestically: MORTLACH 18 Year Old and MORTLACH 25 Year Old. To date, the most successful limited edition in the channel has been THE JOHNNIE WALKER BLUE LABEL 2015 Limited Edition Design, launched in travel retail outlets around the globe including Korea, Singapore and China. This exclusive edition was designed as a visual celebration of the extraordinary whisky it contains; its unique design features a rare opportunity to view the liquid through the case. This exclusive edition serves as a rare collectible and is ideal for gifting. Q: Have you had any activations in the region in recent months? A: In a campaign that fueled the growth of JOHNNIE WALKER BLUE LABEL, we focused on a series of high-profile

activations in key airports including Taiwan, South Korea, Japan, Hong Kong and Singapore, showcasing the successful JOHNNIE WALKER BLUE LABEL short film starring Jude Law and Giancarlo Giannini: “The Gentleman’s Wager.” Q: What will be your focus for TFWA Asia-Pacific Exhibition & Conference? A: Our focus on the TFWA Asia-Pacific Exhibition & Conference will be on these key luxury brands. We work closely with customers to develop disruptive activations designed firstly to catch the eye of travelers and then immerse them in the story of our brands. Prime examples of this are the JOHNNIE WALKER Houses located in the Mumbai and Taoyuan airports. Each JOHNNIE WALKER HOUSE is an exploration of the brand’s legacy, inviting travelers to embark on a multi-sensory journey in whisky. The houses provide an opportunity for our knowledgeable ambassadors to interact with travelers, sharing the story of the brand’s rich heritage and samples of the beautiful liquid. Q: Is there anything you’d like to add? A: The fundamental attractiveness of the region remains strong. It’s a region that will continue to drive the expansion of travel retail sales, particularly at the super-premium end of the market where we have the brands consumers love. Asia-Pacific presents a hugely exciting opportunity for our business and we will continue to invest strategically behind our luxury brands in the channel.

SPIRITS: COMPANY NEWS: BEAM SUNTORY Beam’s bourbons and other range of strong spirit brands added to Suntory’s malt whiskies makes for a formidable enterprise

Powerful portfolio When Japanese whisky giant Suntory purchased Beam last year, its portfolio increased to include not only the company’s namesake Jim Beam family of bourbons, but also Maker’s Mark, Courvoisier, Sauza and other authoritative brands, resulting in a product range as wide as it is deep by WENDY MORLEY

s malt whisky is a huge subcategory in Asia, one might expect Beam Suntory to focus on its significant whisky selection in this region and indeed, that is the case. This will be apparent throughout travel retail, on the shelf and through promotions. Nick Detmold, Director of Global Retail for Asia Pacific, says, “Beam Suntory has an unrivalled collection of peated malt whiskies that drive profitable category growth and maximize increasing consumer opportunity for new flavor experiences. By combining all these under one umbrella promotion ‘Peated Malts of Distinction,’ we begin to build a story around this emerging whisky segment and introduce new products into the shopper’s repertoire.” The company has already held these promotions in HKIA and is exploring opportunities in other locations.

Bourbon: growing globally While malt whisky may be the focus, that does not mean Beam Suntory is forgetting its bourbon side. “As in the rest of the world, in this region we are seeing 106

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great growth in the bourbon category. As travelers from emerging markets seek out new and interesting products, we expect growth within the bourbon category to further increase across the APAC region,” says Detmold. A travel retail exclusive that will combine the company’s two pillars is Jim Beam Kentucky Dram, which will be released this September. Possibly the only product ever of its kind, Jim Beam Kentucky Dram is a “premium Bourbon infused with Highland Scotch whisky.” This unique product was inspired by the legends surrounding Jacob Beam, the first Beam family member to create corn whiskey in the style that would become known as bourbon. Beam Suntory will continue to introduce premium expressions based on the legends surrounding this man as bourbon flourishes in popularity and consumers look for products that are both authentic and not commonly found.

Great strengths Whisky and bourbon will not be the company’s only focus for travel retail in Asia. Cognac is a strong seller in the

region, and Courvoisier is one of the world’s best-known brands. “We intend to fully introduce the new Courvoisier travel retail exclusives into Asia in 2016,” says Detmold. These new travel retail exclusives will feature distinct packaging. Beam Suntory is building from such a strong and solid foundation that it can really move in any direction at this point, but clearly the management has decided to build a fortress of continued strength. “The main goals for the coming year are to showcase our brands.” Detmold confirms. “That involves listing premium bourbons, leveraging the world whisky portfolio and driving Courvoisier.” Beam Suntory will motivate the travel retail customer with its suite of premium products, delivering value growth. The company is also intent on developing strategic and sustainable customer-centric plans with its key customers. “With a new increased level of resources and focus on the channel combined with a leading whisky supply portfolio, we are ready to be a strong strategic growth partner for our customers.”

VANA TALLINN

Estonia is a small country rich in culture and tradition, and Vana Tallinn brings a taste of that country to those who drink it

Estonian

EMPIRE For years, Vana Tallinn liqueur has been hidden away in its corner of the world, but this traditional drink is now bursting out of its Baltic confines by WENDY MORLEY

ong a famous brand in Estonia and named after the old section of its capital city, until now Vana Tallinn—a strong, rumbased liqueur infused with the natural flavors of cinnamon, vanilla, a hint of star anise and a fresh bitter aftertaste achieved by using natural citrus oils—has rarely been found far from its country’s borders. That is changing. Now popular in Russia, Finland and the Baltics, the brand is spreading its wings. Liviko, the producer and brand owner of Vana Tallinn, had attended TFWA WE Cannes a number of times, but 2014 was the first year as an exhibitor. The company had a large, modern, attractive booth. “It was a great experience,” says Maksim Maltsev, Export Manager for Liviko. “We left Cannes with three new contracts: a duty free company from Azerbaijan, a company from UAE, and lastly one we had been trying to achieve for three years: Heinemann agreed to take our products, and we are now in their database. We are still in negotiation with a number of other companies and looking to sign more contracts soon.”

Many launches The company is not relying on its Estonian heritage to achieve sales in the rest of the world. It has recently launched numerous new products and packaging. The product family was complemented 108

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with the premium Vana Tallinn Signature, wherein the classic Estonian liqueur features French Cognac. The company has also released a new summer edition, Vana Tallinn Summer Lime, flavored with fresh lime and mint. “It’s very good for mixing and is perfect for making a mojito,” says Maltsev. The company’s new ice cream flavor in the Vana Tallinn Cream range is unduplicated on the market, and has become the consumers’ favorite. The Vana Tallinn gift-set range also got a new member: a book-shaped gift box with an exclusive pen. The changes have not only taken place with Vana Tallinn itself, however. A new major launch for the company last year was its new premium vodka, Viru Valge Hõbe Vodka (Silver Vodka). Silver filtration gives this vodka an incredibly pure and smooth flavor. Another important step for Liviko was the launch of Crafter´s Gin. The name refers to craftsmanship behind the product; Crafter´s is a traditional pot-still-method gin created with juniper berries and handpicked botanicals. Domestically, the Vana Tallinn brand has been the nation’s favorite for decades and shows no signs of stopping. It is now available throughout northern Europe, North America and parts of the Middle East in addition to Thailand and Japan in Asia. As is usually the case, duty free lags behind domestic, but it is catching up. The brand is available in duty free through-

Vana Tallinn’s new Ice Cream flavor has proven very popular, becoming the consumers’ favorite

out Eastern Europe and the Middle East. According to Maltsev, Asia and South America are the company’s targets for the coming year, in particular South Korea, Singapore, Indonesia, Vietnam, Uruguay, Brazil, Argentina, Chile and Panama. “Our goal is to make our Vana Tallinn liqueur a ‘must have’ product around the world, to share a part of our country through its unique and unforgettable taste,” says Maltsev. “Estonia is a small but culturally rich country bursting with tradition. Vana Tallinn is more than just a liqueur; it is an invitation for those who have never been to Estonia and at the same time a fine memory for those who have visited us at least once, allowing them to recall that time and enjoy the moment.”

Making Friends Since 1834 FINEST SCOTCH WHISKY Lauderâ&#x20AC;&#x2122;s Scotch Whisky first appeared in 1834. The original blend was developed by the Glasgow merchant Archibald Lauder soon after the distilling of whisky was made legal in 1815 and Lauderâ&#x20AC;&#x2122;s has changed little since it was first produced over 175 years ago in Glasgow, Scotland.

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SPECIAL PACKAGING

Standing out in the crowd

The Year of the Sheep special edition gift tin has exceeded Patrón Spirits expectations and has proven to be a highly popular product, especially with Chinese travelers

Asia Duty Free speaks with four spirits producers about the importance of special packaging in the highly competitive travel retail landscape by

RYAN WHITE

ravel retail shoppers for the most part now expect that when they pass through an airport or land border shop, they’ll be greeted with something a little different than they can find in the domestic market, whether it be altogether new products, gifts with purchase or any other number of offerings devised by brands to give their duty free presence some shelf standout. One of the surest ways to catch the attention of busy travelers is special packaging. Asia Duty Free speaks with Patrón Spirits, Deau Cognac, Disaronno and Ladoga and about how they’re enticing style-savvy shoppers to buy their brands while on the road or in the air.

New year, special packaging To celebrate the Year of the Sheep for 2015’s Chinese New Year, Patrón Spirits introduced a limited edition keepsake tin for Patrón Añejo tequila. This tin is available in select domestic markets and in global duty free. The tin, illustrated by Chinese artist Peach Tao, is red with black and gold accents. Her inspiration was the classic Chinese design “three rams bringing bliss.” The illustration includes such elements as goddesses around a lotus flower symbolizing good luck, and other modern and traditional Chinese symbols including lanterns, a ship and the phoenix. A leaping sheep on the lid reflects the wish for a year of happiness and prosperity. As a gentle reminder of the tin’s contents, the artist included the image of an agave plant and Patrón’s famous bee emblem. “Duty free shoppers enjoy finding distinctive luxury products, and unique and relevant gift ideas, when they visit travel retail. This new eye-catching tin not only celebrates the Chinese New Year holiday, it’s also a wonderful way to remember the year, long after the contents of the bottle have been enjoyed,” says Dave Wilson, President – International and Global Chief Operating Officer at Patrón Spirits. Also, John Kilmartin, Patrón’s global travel retail director, tells us that because of the success of the Year of the Sheep gift tin and the significant amount of local press that it generated in the region, the company is planning to create additional marketspecific special edition tins in the near future.

Strong out of the gate Being new to the duty free scene, Deau will be launching a number of new Cognacs—and some very unique packaging—to the market at TFWA AP 2015. On showcase in Singapore will be Privilege, a blend of fairly aged Cognacs expressing freshness, smoothness and clearness, the key profile of Deau Cognac; 110

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and two sets of tasting boxes, containing three or six different cognacs in 200ml bottles, with the three-pack being Deau’s XO Cognacs and the six-pack containing the entire range. “Our range is new to travel retail and one of the most important elements of the proposal is the packaging, which is quite unique,” Says Olivier Hedier, Export Director at Deau. “The shape of the glass decanter reflects the strong identity of a highly original brand. The decanter’s asymmetrical lines give it its vital energy and codes of elegance, modernity and success. It is inspired from a fine sailing ship, which makes a link to the founding father of the company, Roland Bru, who was an explorer who sailed with Captain Charcot.” Visitors to this year’s TFWA AP that are fans of fine Cognac and special packaging, can find Deau Cognac at booth A 02. Deau Cognac’s asymmetrical lines appear modern, intriguing and instantly recognizable.

SPECIAL PACKAGING

bottle. The initiative benefits the Fashion 4 Development charity in Africa through a donation of its profits. This will be the third year running that Disaronno has supported the charity; last year the liqueur brand partnered with Versace, and Moschino was the designer in 2013, the inaugural year. “The Versace Edition has proved to be immensely popular in this region, as Italian designer-themed products fit very with local consumer aspirations and needs,” added Howey.

The lap of luxury Ladoga Group has a number of high-end vodkas that utilize luxury packaging as a means of grabbing attention in what is known to be a highly competitive subcategory in travel retail. For example, Czar’s Original, a vodka crafted to celebrate the 300th anniversary of St. Petersburg, has a bottle that is adorned with old engravings, showing the portrait of Peter the Great created by Carl Moore in 1717, as well as early scenic views of St. Petersburg. Exuding luxury is Ladoga’s Imperial Collection Gold and Imperial Collection Golden Snow. Both bottles are decorated with real 24-karat gold to make them especially alluring and beautiful. Both bottles also feature a portrait of Peter the Great and a two-headed eagle. The pièce de résistance of Ladoga’s portfolio, though, is the Imperial Collection Fabergé series. It features a vodka decanter and four shot glasses made of Venetian glass, all nestled in a Fabergé egg-shaped box. The surface of the egg is covered with colored enamel that imitates natural previous minerals and rhinestones. The super-premium vodka is currently available in 11 different color combinations. The egg rests on legs shaped like winged lions, and atop the packaging rests an eagle that features 24-karat gold. The set also includes a gold-plated bracket to hold the shot glasses and a cap for the bottle decorated with a large Swarovski crystal. Largely due to Ladoga’s attention to detail and willingness to go above and beyond when it comes to offering consumers something different, the brand recently announced that its entire premium vodka line has been listed with Heinemann Australia. Disaronno Riserva is presented in special packaging that consists of a frame and a high-tech film that keeps the bottle suspended.

Double the fun Illva Saronno, producers of both Disaronno and Tia Maria, launched Disaronno Riserva at TFWA WE 2014. The exclusive spirit is the brainchild of two companies within the Illva Saronno Group, Illva Saronno and Duca di Salaparuta wine company. The innovative Disaronno Riserva is the result of marrying Disaronno with Scotch whisky in oak barrels that had contained Marsala produced by Duca di Salaparuta. Importantly for travel retail, the delicious liquid is presented in special packaging that consists of a frame and a high-tech film that keeps the bottle suspended. “Disaronno Riserva has quickly proved a big hit with connoisseurs who recognize the rarity value of this product and appreciate its unique taste profile,” says Martin Howey, Disaronno’s Global Travel Retail Director. “The reaction has been very positive.” Disaronno has also partnered with iconic Italian fashion house Versace to create a special design for a new limited edition 112

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The pièce de résistance of Ladoga’s portfolio is the Imperial Collection Fabergé series, featuring a vodka decanter and four shot glasses made of Venetian glass, all nestled in a Fabergé egg-shaped box

LIQUOR NEWS

The bitter truth Typically used as a digestif and highly effective at helping relieve the discomfort and pressure after a particularly large, fatty or spicy meal, Underberg is made of a secret blend of herbs that was invented in 1846 by Hubert Underberg-Albrecht. After World War II the grandson of Hubert began bottling the bitter digestif in 20 mL bottles. This decision ended up being important to the brand’s future popularity in travel retail, as 20 mL bottles can be easily brought through carry-on. Anyone who travels a lot knows an upset stomach is a common occurrence when doing so, and few things can negatively affect your day like being doubled over with stomach pain. Countless people swear by Underberg for this relief. But Underberg is also seeing a rebirth with the recent upsurge in the popularity of cocktails. According to an almost innumerable number of bartending magazines, blogs and online articles, one of the biggest trends to watch for in 2015 is towards bitter flavor. Baltimore magazine stated in its “Top Bartending Trends” article: “Overwhelmingly, every bartender we spoke with emphasized that bitter will be a popular flavor profile for 2015.” For some, that means a few dashes of Underberg. Others use an entire bottle. This German-style of bitters is gaining a true cult following around the world, with mixologists becoming both excited and creative at what is, for them, a new flavor.

Bitter is the flavor of the year for mixologists, and Underberg is used by a growing number of almost cult-like fans

Bache wins big BacheGabrielsen’s Hors D’Age is a dark, rich, aged cognac made of eauxde-vie dating back to 1917

The World Cognac Awards of 2015 were recently held, and Bache-Gabrielsen came home with two prestigious awards. Bache-Gabrielsen Hors D’Age won a Gold Medal in addition to being chosen as Best Superior Quality Cognac. The Cognac house won another Gold Medal with Bache-Gabrielsen 3 Kors VS. Bache-Gabrielsen Hors D’Age is complex, with notes of spice, apricot jam, burnt orange and a slight vanilla tone. The finish offers hints of brown sugar sweetness. Bache-Gabrielsen 3 Kors VS, meanwhile, is pale in color and light in flavor, floral and fruity on the nose, with a palate of green and black tea and a fruity finish.

Crossing borders

byejoe’s modern taste and design appeal to the coveted 25-35-year-old consumer

With the explosion of Chinese tourists in the past few years, many have thought that the incredibly popular Chinese spirit baijiu would cross the country’s borders. Until now that has not occurred, but trailblazer byejoe is set to change that. Distilled in China from 100% red sorghum, byejoe is then aged for five years, brought to the US in small batches and then further filtered and refined using patented US technology. “The result is an ultra-premium spirit,” says Alberto Fariñez, byejoe’s Duty Free & International Markets Manager. “It is possibly the cleanest, purest baijiu on the planet.” The demographics of byejoe are especially interesting. Slightly more women than men consume byejoe, whereas byejiu consumers are mainly men. The majority of baijiu drinkers are in the 25-35-yearold range, whereas baijiu drinkers tend to be older. The reaction to byejoe from Chinese and westerners alike has been one of surprise, says Fariñez. “The Chinese are surprised by the smoothness and modernity, whereas westerners are surprised and excited by the unfamiliar and exotic flavor.” For even more surprise and excitement, byejoe has introduced flavor infustions, starting with its sweet and spicy dragon fire flavor, made with dragon fruit, lychee and Szechuan hot chilies. Certified gluten free and Kosher, byejoe is becoming a real hit with mixologists. “We believe byejoe is the best-priced, most modern baijiu,” says Fariñez. “A perfect product for the travel retail consumer.”

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LIQUOR NEWS

Vinprom brings a little Flirt to Singapore

Flirt Vodka captures the purity of silver, the tradition of Eastern European vodka making and the free spirit of youth

Produced after multiple distillations of 100% grain alcohol, Flirt Vodka then runs through a filtration system of silver ions, a long and complicated process that allows for precision removal of any impurities. This precise process is modern and the brand relatively new, but Bulgaria, its country of origin, has a long history of vodka production. The first and oldest spirits factory in the Balkans is the one that produces the distillate for Flirt, meaning there is tradition along with the purity in every sip. “Flirt is the outcome of the desire to create an exclusive vodka offering not only high quality, but an ultimate vodka experience. It represents the stubborn, eager, free spirit of the young generation. Its exquisite nature drives through limits and cultural dogmas,” says Elka Khounova, ATL Manager, Vinprom Peshtera. You can taste Flirt Vodka at booth G33 during the TFWA Asia Pacific Exhibition.

Grab an orange by the bottle The Mediterranean blood orange has become a popular ingredient for culinary experts, and has now translated over to the mixologists of the world. Southern Comfort and orange are two flavors that have always worked well together, and now the venerable whiskey-based liqueur has taken that combination to another level with the travel retail exclusive Southern Comfort Blood Orange. This item, introduced at the IAADFS Duty Free Show of the Americas, is available exclusively with World Duty Free Group for its first three months on the market. In August, 2015, it will come available to all of global travel retail. Promotional activities include samplings at airports, on ferries and at other key locations around the world. Southern Comfort Blood Orange is being proclaimed as the perfect drink for summer vacation.

Southern Comfort and orange are two flavors that have always worked well together. Travel retail kicks it up with the culinary favorite of blood orange

Gold standard

The new Licor de Horus Chocolate is a real stand-out in its gold-bar bottle.

Fraternity Spirits is bringing a wide range to Singapore, with the addition of Licor de Horus Chocolate, RIVES spirits and mixers and Tropics cocktails to the company’s time-tested portfolio that includes Tequila Corralejo, 99,000 Horas and El Ron Prohibido. The new Licor de Horus Chocolate is a neutral-spirit based, rich and creamy chocolate liqueur presented in a 750 ml gold bar-shaped bottle complete with the 999/9 gold standard symbol. The company’s RIVES range of spirits and mixers is extensive. A stunning new limited edition blue bottle will be introduced for its 1880 London Gin. “Gin is a very competitive sector. Bottle design is all important and needs to stand out on shelf,” Fraternity Spirits CEO Raffaele Berardi. “This new limited edition presentation most certainly does that with its modern look and vibrant color.” The RIVES range also includes new RIVES Pink Gin and RIVES Special Gin as well as Conde De Cuba rums, various fruit liqueurs and the Tropics range of cocktail syrups, mixes and juices. Visitors to the booth will have the opportunity to try a variety of tequila- and gin-based Tropics cocktails each day from 15:00 to 18:00 at the Fraternity Spirits booth B-02.

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LIQUOR NEWS

Bacardi launches Star of Bombay Bacardi has announced the launch of Bombay Sapphire’s new super-premium gin. Star of Bombay is created using two new additional botanicals and a slow distillation method, to deliver an extraordinarily smooth and rich flavor experience. The production begins with the gathering of the ten precious botanicals used in all Bombay Sapphire gins: juniper, coriander, lemon peel, orris, angelica, almonds, licorice, cassia bark, cubeb berries and grains of paradise. Then two more botanicals are added, to make this liquid a super-premium and distinct liquid: gently dried bergamot orange peel sourced from the mountains of Calabria in Southern Italy, and the aromatic ambrette seed, sourced from Ecuador in South America. This newest expression is produced in small quantities entirely at the Bombay Sapphire distillery at Laverstoke Mill in Hampshire, England, When Master Distiller Nikolas Fordham watched the Dakin stills craft the Bombay spirit once again in 2014, he wanted to open up a new chapter in the brand’s history, creating a new expression of the Bombay signature style, but with a character and flavor of its own. He worked with Ivano Tonutti, Master of Botanicals for Bombay Sapphire, to find botanicals that would harmonize with Bombay Sapphire’s secret recipe from 1761, and together they created Star of Bombay. This new super-premium gin has just launched in global travel retail, starting with Heinemann in Sydney airport.

The new Star of Bombay bottle, like the liquid inside, is based upon the original premium Bombay Sapphire but with its own distinct super-premium look, taste and feel

Bottega’s Rose God range will now be complete, with the release of a magnum-sized bottle

Bottega introduces magnum-sized Rose Gold and more Bottega is once again announcing its commitment to the travel retail channel by participating in the TFWA Asia Pacific Exhibition & Conference. This year the Italian company is introducing a magnum-sized bottle of Bottega Rose Gold. This item completes the Rose Gold range, currently available in four sizes (20 cl, 75 cl, 150 cl and 300 cl). Bottega Rose Gold is a rosé sparkling wine, produced with Pinot Noir grapes from Oltrepò Pavese, characterized by its brilliant peach pink colour and the charming metallic bottle. Bottega Stardust will also be featured at the exhibition. This sparkling Prosecco Dry DOC has a rich, creamy, persistent foam and a fine perlage. The color is brilliant straw yellow; the nose has the typical fruity and floral scent of Prosecco. Bottega Stardust stands out thanks to its attractive packaging: the traditional dark green glass is entirely covered by a myriad of tiny crystals, bringing to mind a sky full of stars. Bottega is also celebrating the 15th birthday of its iconic Bottega Gold. The idea of the gilded bottle dates back to 2000, when Sandro Bottega created an eye-catching packaging for its premium quality Prosecco. A specially designed bottle has been created to celebrate this milestone. A three-litre Jeroboam gilded bottle will feature the number 15, signifying the number of years since its launch, and the letter B, representing the company logo, both encrusted in tiny brilliant crystals. All Bottega products will be available for tasting at Bottega booth M9.

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Spirit France owns two of the most respected Armagnac houses in existence: Armagnac Janneau, founded in 1851 and purchased by Spirit France last year, and L’Armagnac Le Marque

SPIRITS REPORT: SPIRIT FRANCE

The

French Spirit by

WENDY MORLEY

Discover the real essence of France by venturing beyond the usual choices to Armagnac and Calvados

hree different spirits normally come to mind when someone mentions spirits that come from France: Wine, Cognac and Champagne, with a possible addition of absinthe. But there are two spirits from that country with pedigrees that are just as French, and histories replete with the French countryside. Those two spirits are Armagnac and Calvados, two types of French brandy—one made with wine and one with apple cider. Like French fashion and food, French brandy has a “je ne sais quoi,” a combination of terroir, fruit, expertise and history that creates superior spirits.

Before Cognac, there was Armagnac Cognac is an extremely well-known spirit, the name almost synonymous with an elegant, sophisticated life. Made in the region of Cognac by distilling wine, this spirit is normally produced by blending a number of “eaux de vie,” as these distillations are called, after they have matured. A particularly good grape-growing and therefore wine-producing year may cause the master distiller to create a vintage.

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This is all fairly well known by Cognac lovers. But few know that the distillation of brandy from wine began about 150 years earlier in an area a little further south and a little further inland from Cognac. This region is called Armagnac, and as with Cognac and Champagne, the spirit produced there bears the same name as its locale. While Armagnac and Cognac are both French brandies made from wine, they are produced using different grapes, they are distilled differently, and Armagnac is normally matured for longer in oak barrels. Armagnac’s flavour may be described as richer, spicier or more complex than Cognac. Connoisseurs of spirits often choose Armagnac as their preferred French brandy, because of its complexity and also because it is generally produced by smaller houses, which tends to mean more character and greater differences between the brands. While this combination may makes Armagnac slightly less accessible to the mass market, it makes the spirit a perfect choice for duty free and travel retail, where customers seek purchases that are both unique and high in quality. Armagnac may also be the perfect brandy choice for the Scotch whisky drinker, who not only is unafraid to encounter complexity in his or her spirits, but rather welcomes it.

Rustic to elegant Like certain foods, certain nightclubs and restaurants, there are certain spirits that are cherished by those in the know. Calvados is one. Calvados is the romantic name for French apple brandy. This name was given to the liquid in 1790, after a rock located off the coast of Arromanches-les-Bains, in the Normandy region of France. While brandy is made from apples in other parts of the world, notably the US, Normandy is its birthplace. A rustic drink, apple brandy is perfect for the cooler weather. As the temperatures dropped in Europe during the Middle Ages, apples were found to be a good crop for this cooler part of the country. The fruit could be stored well through the cooler months—whole, dried, or made into cider. In the early 16th century, local orchard keepers discovered how to make brandy from apple cider, a feat that was not simple, and the future-named Calvados was born. While it has pastoral origins, Calvados has become a truly elegant spirit. High-end Calvados Lecompte Coeur de Gamme, owned by Spirit France, comes with an exclusive gift box and it is available in ages ranging from five to 25 years. Their Pere Magloire, meanwhile, has been a leading brand in France since 1821.

Calvados Boulard is the most exported brand and quite possibly the most recognized Calvados in the world. The brand’s spectacular Pays D’Auge XO is aged between eight and 15 years

BELUGA VODKA

Beluga’s Siberian Express promotion, featured at selected airports in 2014

From Russia

WITH LOVE Beluga Vodka continues its dominance of the vodka category in Russia and CIS, and continues growing in other key duty free markets around the world

ravel retail’s vodka category is a highly competitive landscape that requires brands to exhibit authenticity, innovation and luxury values to succeed. Fortunately for Beluga Vodka, the brand exudes all three. Asia Duty Free recently spoke with Victoria Leonova, Head of the Travel Retail Department Beluga’s brand-owner Synergy Group, who tells us that the brand is performing well outside of Russia, with overall sales increasing 21% in 2014 versus the previous year. The company’s duty free business specifically saw a sales increase of 13% during the same period. “As for Synergy Group’s total sales, we saw a 5% increase over the previous year,” says Leonova. “This includes sales in Russia, as well as export and import operations.” Part of the reason for Beluga Vodka’s success in travel retail has to do with its concentration on special packaging and promotions. Synergy Group recently put on a promotion called “Siberian Express” which featured in Dubai, London, Beirut, St. Petersburg, Moscow, Milan and Cancun in 2014. And in part due to this continual innovation, the brand was listed last year at all airports across Spain and in Cancun, Kuala Lumpur, Delhi, Mumbai 120

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RYAN WHITE

Special packaging for Beluga Noble featuring a glass GWP

and Bangladesh. “Beluga Vodka is now featured in a total of 178 airports worldwide,” says Leonova. To keep momentum strong this year, Synergy Group will be releasing a 1-liter bottle of Beluga Vodka with a glass; a novel design for the Beluga Twin Pack; and Beluga Gold (0.7 liter) with three shot glasses. “Beluga always pays special attention to promotional packages,” explains Leonova. The company will also continue this year to promote its popular Transatlantic Racing special packaging in selected airports in Moscow, St. Petersburg and Dubai. “Particularly in these locations, Beluga has matured as a brand and this line reflects that,” Leonova adds.

On the horizon “Beluga Vodka is still growing worldwide and in spite of the fact that in Russian and CIS we are the leaders, we have many locations where we can continue our growth,” Leonova says. In the months and years ahead, Synergy Group sees growth coming from the Americas, the Middle East and Asia. Furthermore, where duty free specifically is concerned, Leonova notes that the brand is poised for growth in Singapore and Vietnam. “Another area where we see growth coming from is from our Belenkaya brand,” Leonova says. “The brand is a standard segment vodka that is currently number one by sales in Russia and most CIS countries with annual sales volumes of more than six million nine-liter cases.”

Beluga Gold 0.7 liter with three shot glasses

For visitors to this year’s TFWA AP exhibition in Singapore, Synergy Group will be featuring a new product in 1-liter format called Beluga Jubilee. “This particular release was inspired by the 100th anniversary of the Mariinsky plant in Siberia, where Beluga is produced,” Leonova notes.

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Tobacco news

Agio celebrates Year of the Goat For the Chinese Zodiac Year of the Goat, Agio released a special limited edition of Balmoral Dominican Selection Collection 12’s. The special edition of the Balmoral Collection gift box, available only in select duty free markets, was created to honor those born in the Year of the Goat, who are artists and lovers of harmony, beauty and aesthetic pleasures. This Balmoral Collection sampler is presented in a decorated wooden box containing four small Panatelas, four Panatelas, two Coronas and two Corona Tubos cigars. These cigars all feature a shade-grown Ecuadorian wrapper to ensure a rich, mild flavor. The binder is of Dominican Olor and the fill is a blend of Dominican Olor, Piloto Cubano, and Brazilian Bahia leaves. The cigars are made at Balmoral’s production facilities in San Pedro de Macoris in the Dominican Republic. During the TFWA Asia Pacific Exhibition, Agio will present several of its new innovations, highlighting the Balmoral Dominican Selection, in booth H9. Balmoral’s special Year of the Goat collection was presented in a decorated wooden box containing four small Panatelas, four Panatelas, two Coronas and two Corona Tubos cigars

Imperial Tobacco highlights Davidoff cigarettes’ “For the Hunters” campaign

Imperial Tobacco will present a new booth and smoking room at TFWA AP, capturing the look and feel of its new campaign

36 Duty&free & travel retailinG TFap may 2015 122Gulf-africa ASIA DUTY FREE TRAVEL RETAILING MAY 2015

Imperial Tobacco’s luxury cigarette brand Davidoff will have a starring role in the company’s booth at the TFWA Asia Pacific Exhibition in Singapore. Davidoff’s new “For the Hunters” campaign, which was just recently launched in the Middle East, is intended to strike a nerve with the brand’s target customer by bringing a fresh, modern edge with visuals based around three key descriptives: For those who know when to strike; For those who own the game and For those that set the pace. These descriptives highlight certain reputed characteristics of Davidoff cigarettes and of the brand’s targeted smokers, including a dedication to quality, confidence, style, luxury and distinction. Along with the new campaign, Imperial Tobacco is bringing a brand new stand along with a new-look smoking room. The stand is designed to reflect the luxuriousness and fresh, modern vibrancy of the Davidoff brand, with a meeting room that Christian Münstermann, Sales & Marketing Operations Director Global Travel Retail, says “aims to give customers a sense of the campaign and truly incarnate what it is to be a hunter,” though he is secretive as to just how. “Visitors to the stand are in for a real treat – we always aim to bring theater and entertainment to the Imperial Tobacco stand and Singapore is no exception.” Meanwhile, the new smoking room offers the look and feel of a prestigious lounge, with a self-service mini-bar and a glass overlook, allowing visitors to view the exhibition hall. Imperial Tobacco will be at booth C38.

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A MIXED BAG

A Mixed Bag Here, we feature seven must-have products that can be found in a fashion-savvy woman’s bag this Spring-Summer season 5 3

7 2

1. Mondelez WTR’s Tiny Mono-flavour Bags: Three new variants will be launched in a travel retail exclusive format— Milk, White and Dark—complementing the Toblerone Tiny Mixed Bag, one of Mondelez’s top-selling SKUs in the channel

2. Lipault bag: The Parisian house of luggage and bags reveals its new color palette for Spring-Summer 2015: soft blue, tender red and acid yellow (pictured)

5. Happy Hands hand lotion by Rituals: A fast-absorbing, ultra-nourishing hand lotion for your travels, with a fragrance of mandarin and the invigorating effect of mint

3. Fendi Orchidea sunglasses: For Spring-Summer 2015, Fendi presents eyewear inspired by the exotic orchids embroidered on the ready-to-wear and accessory collection

6. Clinique Pop lipstick: This rich, long-lasting, velvety lipstick also features a built-in smoothing primer. It comes in fun, flirty colors to define and nourish the lips

4. SKROSS rechargeable batteries: RELOAD 5 and RELOAD 12 offer mobile users state-of-the-art gadgets. Their ultra-flat design is a perfect fit for any side pocket, briefcase or backpack

7. Toni&Guy Radiating Tropical Elixir: Made with an exotic blend of four high-performing natural oils, this elixir has built-in UV filters and is your perfect summer hair styling essential

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QUESTIONNAIRE

ALL ABOUT

Matthieu Mercier, CEO, LS travel retail Pacific

Q: Where were you born and raised? A: I was born and raised in Paris. Q: If you attended post-secondary school, what did you study? A: I attended business school in Rouen. I wasn’t quite sure what to do at the time and this seemed like a door opener. Q: Are you married? Do you have children? A: Married with three kids; my daughter is 15 and my twin boys are nine. Q: What is your favorite movie? A: Grand Départ—it’s a very personal preference, as it is written and directed by my brother Nicolas. Q: What is the last book you read? A: In Search of Lost Time by Marcel Proust. Started a few years back and I’m still not finished so I did lose a little time on the way! Q: What would you choose as your last meal? A: A taste of summer holiday at my grandparents’: peeled tomato salad with vinaigrette and frog legs à la provençale, finished with a lemon tart. Another option would be a heart-shaped waffle, filled with butter and sunk into a hot chocolate. Q: Your favourite drink? A: I assume and I hope we’re talking alcoholic drinks! In this order, depending on the time in the evening: Champagne; a Bordeaux red (Pessac-Leognan is my favorite) or a Burgundy white such as a Pouilly Fuisse; gin and tonic. Q: Do you have a passion in your life (or more than one)? What? A: Too many indeed, which sometimes puts me in trouble at home: Antiques,

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vintage watches, ’70s and ’80s sports cars, tennis and sports in general (playing more than watching), 19th century classic literature. Q: Do you have pets? If so, what type of animal and what is its name? A: No pets. I have made attempts with goldfish and turtles. I’m always very sad to see them die and so I will not make other attempts. Q: Do you prefer country or city? A: I really need both, at different times of year. But if I had to choose one for good that would be country for sure. Space, air, nature—no city can compete with that in my eyes. Q: What is your favourite place to vacation? A: Sounds cheesy but true: wherever I can spend my time with good friends is always my favourite holiday. Q: What’s the first thing you do in a new place? A: When moving to a new country I usually do the following: Learn the language, find a place to live, find a school for the kids and a tennis club, and have a big night out to get a feeling of the place and of the people when they let go. Q: If you could choose any place in the world to live, where would it be? A: I feel very privileged to live in Sydney and for now I cannot think of a better place. Next one would be a place I haven’t lived in: South America, Africa or Asia. Q: Which living person do you most admire? A: Honestly everyone who, maybe for very different reasons, has to fight hard to make it through the day and actually

makes it, day after day. Most of us are so privileged with health, education, jobs and a home to go to at night. Q: Which historical figure do you most admire? A: It is recent history but it would be L’Abbé Pierre for sure. A man who, born in a wealthy family, was a member of the resistance during World War II and a leader for decades in the fight against homelessness and so many righteous and important political fights. Q: Where and when were you happiest in your life? A: Every time I’ve managed to feel settled and home in a new country has felt amazing, a nice feeling of belonging to a new place while still rich with home culture. I was lucky enough that I got this feeling in the USA, in Spain, in Bulgaria and now in Australia. Every time I feel surrounded by friends and family, though that never occurs often enough! Q: What in the world would you most like to change? A: The condition of less fortunate children as a very broad choice, from health to education and of course homelessness. Q: What about yourself would you most like to change? A: My crappy forehand, which drives me totally crazy and to the edge of a nervous breakdown. Q: What is the most important piece of advice anyone ever gave you? A: Take risks. Q: What is something about you that most people would find surprising? A: I’m more terrified than a kid by any movie that’s a little scary. 