AsiaTFWA WE May 2016 by Paramount Publishing Ltd.

TFWA AP 2016

DUTYFREEMAGAZINE.CA MAY 2016 · TFWA AP· VOL 20 · NO 1

DFS chooses Cambodia for downtown store p. 10 John Garner takes DFASS to new heights p. 14 Teo Chew Hoon: New at Changi Airport p. 36

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You are unique. Your jewellery should be too

Imagine a million different rings within the reach of your fingertips.

LETTER FROM THE EDITOR

Recalibrating and recalculating

uch has been said and written over the last year or so of the Chinese slowdown, but the fact of the matter is that Asia—China included—still holds a great deal of potential for travel retail. The latest figures indicate that air travel across the region is up 10.6%. Moreover, China is outperforming the region-wide average at 11.2% growth. TFWA President Erik Juul-Mortensen tells us on page 32 that while it’s true that the Chinese traveler is changing (more families and couples are traveling now as opposed to the large groups seen in years past), a recalibration on the part of travel retail may be all that is required to once again fully seize the opportunity that these travelers represent. Juul-Mortensen points to changes in spending habits—these travelers are in some cases looking for different brands than the Chinese traveler of years past, as well as more mid-range offerings—as a trend to which duty free must pay attention if it is to fully capture the new Chinese traveler’s imagination—and hard-earned dollars. The latest statistics make it clear that the travelers are still there; they’re just looking for something slightly different. And while we’re on the topic of learning to roll with the punches and accommodate new types of travelers and evolving tastes in products and brands, consider that JuulMortensen points to air travel growth being high in a number of other places across the Asia region, with Thailand, Korea, Hong Kong and Singapore reporting growth of 14.7%, 12.3%, 13.3% and 10% respectively. The clear winner, though, is India, with the latest figures indicating growth of 16.4%. Each of these traveler demographics is looking for something different, and it’s up to duty free to deliver on their expectations. These changes necessarily mean a lot of work for travel retailers and brands in Asia and other worldwide destinations that are popular with the travelers mentioned above. We can, however, take consolation in knowing that the trends of growth we’re seeing regionally in China and India and demographically with the rise of the middle class are expected to play out over the longer term. This is good news, because it means the work we put into understanding these new travelers today and getting them to spend in economically hard times will pay dividends for some time to come.

Kindest Regards,

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

MAY 2016 · TFWA AP · VOL 20 · NO 1

Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published by Global Marketing Company Ltd. 26 Pearl Street, Mississauga Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldives Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. MAY 2016, Vol 20, No.1. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2016 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 SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Rebecca Byrne Claire Malcolm

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

CONTENTS

What’s inside LEAD STORIES 10 Retailer News: DFS ON THE HERITAGE TRAIL

Luxury travel retailer, DFS has chosen the popular town of Siem Reap in Cambodia as the location for its next downtown store

14 Inflight Retailer: DFASS TAKING TRAVEL RETAIL TO NEW HEIGHTS

Through their new joint venture inflight travel retailer DFASS and ground handler and inflight caterer SATS are looking to transform the travel retail experience for their customers

16 Airport News: Jewel Changi Airport THE JEWEL IN THE CROWN

A joint venture between Changi Airport and CapitaMalls Asia is set to deliver an iconic centerpiece for air passengers, tourists and locals

20 Airport News: Sydney Airport A STRAIGHT LINE TO SUCCESS

Sydney Airport is repositioning itself as a key global retail destination with a contemporary redesign of its International terminal

28 Retailer News: Gebr Heinemann A RAPID TOUCH DOWN

German travel retailer Gebr Heinemann has seen a year of change at Sydney Airport since the company won the duty free contract

32 Q&A: TFWA THE FUTURE IS BRIGHT

As the travel retail industry comes to terms with the evolving tastes and spending patterns of Chinese travelers, TFWA President and veteran industry player Erik Juul-Mortensen offers his take on a fastchanging situation

36 People News: Changi Airport CHANGE AT CHANGI

Teo Chew Hoon joined Changi Airport Group as the new SVP of Airside Concessions in January 2016. Just few months into her new job, she spoke to Asia Duty Free about the challenges of her role and developments in the pipeline

36 FEATURES Guest writer: Michiel Munneke, M2mobi 38 m1nd-set talks travel retail shopping 42 i2i Group targets the repeat traveler 46

Lotte Duty Free looks for new stores Plenty of growth in store for Furla Editor’s Picks: Little travel treasures

50 52 56

CONTENTS

LEAD STORIES 58 Jewelry: Dyrberg/Kern ARM CANDY

The launch of its first-ever men’s collection marks another step in Dyrberg/Kern’s plan to become one of travel retail’s leading jewelry brands

60 Fashion: Radley BAGS OF CHOICE

Fast-growing affordable luxury accessories brand Radley is looking to triple its sales in the next five years across the travel retail channel, with growth coming from Asia in particular

64 Writing instruments: Staedtler FLYING COLORS

The adult coloring-in trend has meant boom times for Staedtler, the German pencil and felt-tip company, as it attends the TFWA Asia Pacific show for the first time

72 Liquor: Edrington CONTINUED GROWTH

Despite a weakened economy and a trend toward lower price points, Edrington’s whiskies are still achieving double-digit growth in Asia, says GTR Managing Director Tellis Baroutsis

80 Liquor: Rémy Cointreau OPEN MARKET

Rémy-Cointreau GTR Managing Director Peter Sant sees opportunities abounding in Asia, and the company is increasing its footprint with multiple brands

82 Liquor: Brown Forman RISING ABOVE THE STORM

In a difficult business environment, authentic and iconic brands that are recognized worldwide and in line with current trends help smooth the waters

FEATURES Confectionery News 66 PVM launches 2016 portfolio 70 Marie Brizard’s big splash 74

Bacardi trades up 78 Liquor News 84 Questionnaire: Sunil Tuli 86

RETAILER NEWS: DFS

On the heritage trail by

REBECCA BYRNE

Luxury travel retailer, DFS has chosen the popular town of Siem Reap in Cambodia as the location for its next downtown store

he historic city of Angkor, just a short distance from Siem Reap, is famous for being home to the largest religious monuments in the world. Tourists flock to Angkor Wat to explore its 12th century temples seeped in religious history. With six million visitors predicted to arrive in Cambodia in 2016 and the majority of these passing through Siem Reap, it was the perfect place for DFS to launch its latest T Galleria by DFS. It took DFS three years to find the right building to house its collection and it was worth the wait. The downtown store has a prime location near the iconic Raffles Hotel and is connected to the Angkor National Museum. At 8,000 square meters the store will be the largest duty free luxury department store in Cambodia. Two hundred local sales associates, employed and trained by DFS, will be on hand to help customers chose from more than 170

international brands, many of which are new to the country. Philippe Schaus, DFS Group’s Chairman and CEO, commented on the reasoning behind this latest venture: “The T Galleria by DFS brand is truly inspired by the traveler and their love of discovery. So when we looked for the next location to open our latest T Galleria by DFS store, we wanted a destination that not only would be distinctive and luxurious, but would fulfill our customers’ desire for exploration. And of course Cambodia as a travel destination is growing across the board. It’s an incredibly enchanting country with a stunning cultural history that is increasingly being discovered by travelers from all over the world. We’ve seen the number of visitors grow 30% since 2013 and that growth is expected to continue with nine million travelers predicted to visit the country in 2020.” It is anticipated that 70% of the visitors

Stunning installations instore add to the shopper’s experience

to the store will be from Asia Pacific. The recent increase in direct flights between Cambodia and China has already boosted visitor numbers by 20%. As a world heritage site, Angkor Wat also attracts travelers from across Europe and the Americas. To raise awareness of the T Galleria by DFS store, the company is leveraging market resources to reach customers both pre-departure and in-market. This

INTRODUCING THE NEW EAU DE TOILETTE

Philippe Schaus, DFS Group’s Chairman and CEO

ACTOR

ENVIRONMENTALIST

Please drink responsibly.

SINGER

RETAILER NEWS: DFS

The store will showcase more than 170 international brands, many of them new to Cambodia

includes working with travel industry partners, promoting the store on social media, with press and at DFS.com as well as creative in-market marketing, such T Galleria by DFS-branded tuk tuks driving around Siem Reap. Shoppers visiting T Galleria by DFS, Angkor will discover the luxury experience they have come to expect from a T Galleria store. The store will have the full product assortment across the five pillars of luxury including beauty and fragrance, watches and jewelry, fashion and accessories, wines and spirits, and food and gifts. Importantly, DFS will be introducing several international brands to Cambodia for the first time including Bulgari, Carl F. Bucherer and Tiffany & Co. in the world of watches and jewelry, and international fashion brands Bottega Veneta, Burberry, Fendi, Gucci, Polo Ralph Lauren, Saint Laurent and Zegna. In beauty, customers can also discover 12 beauty and fragrances brands such as Bobbi Brown, Clé de Peau

At 8,000 square meters the store will be the largest duty free luxury department store in Cambodia

Beauté, MAC and Sulwhasoo for the first time in Cambodia. What is quite distinctive in the Siem Reap store compared to some of the other T Galleria by DFS sites is the expansive amount of space dedicated to local product offering. In the store’s rotunda, customers will find products from 25 local artisans and brands, many of who are breathing new life into some of Cambodia’s ancient modes of craftsmanship. A few examples include: Angkor Artwork, whose master craftsmen Eric and Thierry Stocker produce lacquer and straw marquetry using traditional techniques; Golden Silk, one of the last fully integrated silk producers in the world to use the rare yellow silkworm indigenous to Cambodia; and Samatoa, an eco-friendly accessories brand that has revived the forgotten technique of lotus fiber weaving. Schaus comments: “We have also teamed up with Artisans d’Angkor, a socially-conscious business aimed at revi-

talizing Cambodia’s traditional craftsmanship while pioneering a sustainable working environment, to develop an exclusive collection of luxurious handwoven silks and fine crafts. The collection will showcase products that were designed by and will benefit local artisans.” In addition to the many local brands DFS has partnered with for its destination assortment, the company has worked closely with local artisans to bring the magic of Angkor Wat to life in the interior design of the store. From stone carvings on the interior columns to the stunning 60-foot art installation suspended in the store’s vaulted atrium, these design choices help to elevate the shopper’s experience. And in keeping with local traditions, DFS made sure the store received an auspicious start. “To celebrate the opening, we invited local monks to come and bless the store. It was incredibly important to us as a company to engage with and celebrate the

local customs and culture that make Cambodia unique,” says Schaus. The store will be fully operational in June 2016. Currently, the beauty and fragrance, wines and spirits, food and gifts and local destination areas are now open. Part of the fashion and watches and jewelry offering is also available, with more boutiques opening in May and June. In a country first, DFS is bringing Crystal Jade to Cambodia. The restaurant, opening in June, will serve traditional Chinese cuisine and dim sum in a “casual yet sophisticated setting”, overlooking the gardens and reflecting pools outside. Schaus enthuses: “Overall, we could not be more thrilled to be introducing our brand to this magical destination and we’re incredibly grateful to the community of Siem Reap for welcoming us with open arms.” The next T Galleria by DFS will also be in an area steeped in history. Opening this year in Italy, the store will be housed in Venice’s Fondaco dei Tedeschi, a large historic building in Venice, first built in 1228 and currently undergoing a full restoration. The store will have the full product assortment across the five pillars of luxury

DFS worked closely with local artisans to bring the magic of Angkor Wat to life in the interior design of the store

INFLIGHT RETAILER: DFASS

Taking travel retail to new heights

John Garner, Deputy Chairman of the DFASS Group and President of DFASS Asia Pacific, in Singapore where the new joint venture was signed

Through their new joint venture inflight travel retailer DFASS and ground handler and inflight caterer SATS are looking to transform the travel retail experience for their customers by

REBECCA BYRNE

W Executive Vice President of DFASS Asia Pacific, Lee Hwee Ming (center) will lead the new joint venture as interim general manager

DFASS Group sponsored the 2016 Aviation Festival held in Singapore

John Garner and DFASS staff at the Formula One Light Up The Night Carnival in Singapore where DFASS was a concessionaire for KrisShop

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

hen DFASS recently announced its partnership with SATS, Asia’s leading provider of gateway services and food solutions, this heralded a new era in inflight services. DFASS is already a market leader in Asia, operating a full concession model onboard 17 airlines at last count, with more airlines coming on board in the near future. But for John Garner, Deputy Chairman of the DFASS Group and President of DFASS Asia Pacific, the business will no longer be limited to 200 items on a cart on the aircraft. The new joint venture, named DFASS SATS, is set to change all of that. The two companies have been working together since DFASS launched in Asia 10 years ago: DFASS packs its carts on SATS’ premises and SATS arranges the movement of the carts and uploads the carts onto the aircraft. However, both companies realized that there were many more synergies to be exploited. Garner comments: “Together with SATS, we wanted to find new ways of reaching our passengers beyond inflight. In our minds there is a trinity of operators – the airline, which has first contact with the passenger; DFASS with the travel retail program touching on the passengers during inflight; and SATS with its ground handling expertise and its ability to reach out to the passenger on ground. It seemed crucial to work together in a more sophisticated manner and ultimately broaden the product range, passenger touch points, and ultimately benefiting all stakeholders including airline, passenger, retailer and ground fulfilment partner.” Alex Hungate, President and Chief Executive Officer of SATS agrees and sees this new joint venture as an opportunity to innovate and develop new ways of retailing to travelers and fulfilling their orders. “Once bounded by the quantity and size due to certain space restrictions of the galley carts and the maximum weight an aircraft can carry, now, we can explore expanding the merchandise list to include larger and more premium items.” This will change the way travelers in Asia approach duty free by taking it beyond the airport retail space and inflight. “We

DFASS is one of the leading inflight travel retailer in Asia

want to see a mindset like Scandinavia where they book their duty free when they book their flight because they know there is a substantial tax saving and convenience,” says Garner. He adds that there are untapped sales opportunities within the partnership as the traveler moves through the airport, such as at the check in counters and lounges, both of which SATS runs in Singapore. “We can foresee a time when passengers can order their duty free in the lounge or on the internet and it is delivered to their seat,” says Garner. “Or a passenger is able to pre-order on one leg of the flight and have merchandise delivered in the second or third leg of the journey.”

Already, DFASS is in the process of creating an app for duty free which passengers can download when booking their ticket or boarding the plane. Furthermore, its real time credit card initiative will soon come on stream, which will help combat fraud and expand the product range to include higher ticket items such as luxury watches. Garner believes with this facility they can start to offer hotel and attraction bookings inflight. Garner is also enthused about the product potential this partnership could deliver. “SATS is a very interesting company from a catering point of view as they have their own confectionery line and other products such as sauces. Singapore is a well-known culinary destination and a package of chilli crab or laksa sauce would make a wonderful souvenir or gift. Together, we will look at every opportunity to enhance the traveler’s retail experience. Imagine if, as a passenger, you could celebrate a special occasion on a flight and order in a bottle of chilled champagne with smoked salmon sandwiches. This is the type of service we want to be able to offer in the future.” Along with revamping inflight travel retail, the joint venture company will manage and operate the travel retail facilities in the Marina Bay Cruise Centre Singapore. This will be DFASS’ first retail space in Asia. The terminal has the capacity to handle more than 6,000 passengers at the same time. Plans are underway to develop the shopping area, which will be ready later this year. The relationship is currently limited to Singapore, but Garner sees potential in expanding the partnership across Asia. “Whenever you start this type of relationship you have to be prepared to develop and expand together. We each bring unique capabilities to the joint venture and a strong pan-Asian footprint. I see no reason why we cannot provide these new services in other places such as Indonesia and India.” Executive Vice President of DFASS Asia Pacific, Lee Hwee Ming is tasked to lead the startup of the new DFASS and SATS joint venture as the General Manager to ensure a smooth transition. She will be supported by team members in Asia from both DFASS and SATS on an interim basis until the transition is completed and a permanent General Manager is in place.

DFASS worked with Singapore Airlines to create the Formula 1 ‘beary ambassador’ and other merchandise for the event

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

AIRPORT NEWS: JEWEL CHANGI AIRPORT

THE JEWEL

in the crown by

REBECCA BYRNE

A joint venture between Changi Airport and CapitaMalls Asia is set to deliver an iconic centerpiece for air passengers, tourists and locals Jewel, the new icon of Changi Airport

Jewel will offer around 90,000 square meters of retail space

Jewel embodies Singapore’s reputation as a garden city as visitors can dine amongst the lush greenery

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

ingapore’s Changi Airport is already considered the best airport in the world and soon it will be even more impressive thanks to the latest project, Jewel Changi Airport (Jewel). This impressive glass and steel structure with its outstanding leisure and retail facilities will embody the concept of a lifestyle destination. Set to complete in 2018, the 134,000 square meters that make up Jewel will offer: a hotel operated by international brand YOTEL; a dedicated multi-modal passenger lounge; and 90,000 square meters of retail space. The ten-storey complex, with five floors above ground and five below, is integrated with the expanded Terminal 1 via the Arrival Hall and linked to departure halls of Terminals 2 and 3 via pedestrian bridges with travellators. Jewel is conveniently located on the public side of T1, making it accessible to local visitors as well as air passengers and destination tourists. Philip Yim, Chief Executive Officer, Jewel Changi Airport Devt, describes the reasoning behind the S$1.7 billion (US$1.2 billion) investment: “Our vision is for Jewel to be an iconic world-class lifestyle destination that will enable the Changi air hub to capture passenger mindshare, and boost Singapore’s appeal as a stopover point for travelers. At Jewel, we want the world to meet Singapore and for Singapore to meet the world.”

AIRPORT NEWS: JEWEL CHANGI AIRPORT

At night the world’s largest indoor waterfull, the Rain Vortex, will be lit up

The retail offering in Jewel will showcase a comprehensive range of products and services with a good mix of new-tomarket and unique concepts to create a great shopping experience. There will be approximately 300 shops in Jewel, with about 30% of the space dedicated to F&B and 70% to retail. The Jewel team has just started speaking with prospective retailers regarding leasing opportunities in the complex. Yim continues: “The retail experience at Jewel will be customized and curated to deliver the vision of it being a world-class icon of Singapore. The commercial offer-

ings will be unique and attractive to both international travelers as well as local visitors. “We plan to introduce international brands that are new to Singapore and Asia. For brands that are already in Singapore, we plan to work closely with these retailers to make the shopping experience a process of discovery for our visitors. With the rich heritage behind brands, we will also share these stories and introduce artisan showcases in Jewel. In addition, we will be looking at homegrown retailers, designers, and craftsmen to introduce a strong Singapore retail story to share with

the world. Finally, with the lush greenery that is prevalent throughout the complex, there will also be a strong theme of ‘bringing the outdoors indoors’ in our shopping and dining offerings.” Designed by the architect of Singapore’s Marina Bay Sands hotel, Moshe Safdie, the concept for Jewel’s design stems from Singapore’s reputation as a garden city. Visitors can shop and eat whilst enjoying Jewel’s unique design features such as the majestic Forest Valley, incorporating 22,000 square meters of trees and plants, and the Rain Vortex, the world’s largest indoor waterfall.

The Jewel team has started speaking with retailers regarding the leasing opportunities

Philip Yim, Chief Executive Officer, Jewel Changi Airport Devt

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

AIRPORT NEWS: SYDNEY AIRPORT

Many brands such as Joe & The Juice are new to Australia, not just the airport

A straight line to success Sydney Airport is repositioning itself as a key global retail destination with a contemporary redesign of its International terminal

isitors to Sydney Airport’s T1 International terminal are in for a visual treat. An improvements program is transforming the T1 Departures area, creating a reconfigured layout with enhanced wayfinding and more light through expanded views of the city skyline and airfield. Asia Duty Free talked to Glyn Williams about the changes he has overseen during his two years as General Manager Retail. “Sydney Airport facilitates a diverse mix of around 40 million passengers a year and we’re implementing significant upgrades to the T1 International terminal to enhance the airport experience for passengers, visitors and staff.” Rather than simply enhance the existing duty free offering, this was an opportunity to see how the current terminal layout operated from a passenger perspective. Research was undertaken to see if the retail experience as the passenger moved from security to the gate was enjoyable and stress-free. The result led to a complete rethink of the retail structure, as Williams explains: “The incumbent design took passengers down a winding path, through a store where the duty free operator would use different touch points to encourage purchasing. We found that this format not only created frustration and confusion for passengers who did not wish to shop, but also was equally frus20

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

trating for those who intended to shop. Most of the passengers had preplanned their purchases and were trying to locate a product whilst bumping into the nonshoppers who were anxious to get to their gate. It was not creating a relaxing shopping experience.” The terminal’s new layout is much more linear and conducive to passenger flow, with improved wayfinding and clearer lines of sight. Passengers pass through security into an orientation zone where new flight information displays and e-directories in English and Simplified Chinese help them to plan their time in Departures. There is no longer a winding path through the main duty free store; instead, there is a straight 12 meter wide shop-lined path which takes the passengers directly to the gate lounge. Passengers can orient themselves quickly and it separates those who want to get to the gate quickly from those who want to shop. Williams adds: “The upside of the new format is that it has slowed down the pace at which passengers walk through the terminal because they can see the commencement of the main piers and enhanced wayfinding aids the understanding of time to gates. This gives passengers more time to orient themselves and enjoy the updated mix of retail, enhancing choice and value across a range of price points.”

Glyn Williams, General Manager Retail, Sydney Airport

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AIRPORT NEWS: SYDNEY AIRPORT

A luxury promenade reminiscent of Canton Road in Hong Kong includes brands such as MaxMara

With China now overtaking New Zealand as Sydney Airport’s largest visitor market based on residency, it was important to adapt the retail offering to meet the needs of this important market. With a growing number of Chinese travelers and other growth markets such as Philippines, Malaysia and India to consider, this has informed the plethora of luxury brands and diverse food and beverage outlets now found at Sydney Airport’s T1. Some of these, such as Joe & The Juice and Bistro by Wolfgang Puck, are not only first to Australian airport brands but also first to Australia. These brands will join the new premium food and dining precinct known as City View, which includes Heineken House, Benny Burger by Shannon Bennett and Kitchen by Mike. The enhanced retail offering boasts Heinemann’s largest standalone airport duty free store in one footprint. Sydney

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Airport chose Heinemann as its duty free partner and has been delighted with the flexibility and creativity of the world’s sixth largest duty free retailer. Working with Heinemann, which has its own fashion component with major brands such as Fendi, Bally and Jimmy Choo, the airport has developed a new luxury precinct. The direct lease store tenders have been awarded to prestigious brands such as Kate Spade New York, Michael Kors, TUMI and MaxMara, the latter of which is already open for business. Tiffany & Co. is set to open its first Australian airport store soon. These stores will display eight meter high facades, complete with floating watermarks. In fact, the double height visual experience is reminiscent of streets such as Hong Kong’s Canton Road. With more big names being signed up this year, it is not surprising that Harper’s Bazaar magazine has named Sydney Airport as fast becoming a go-to destination for luxury shopping in transit. Sydney Airport has also revamped the rest of the retail offering to cater to the airport’s diverse passenger mix. This includes introducing larger format stores that offer a complete retail experience, rather than a collection of smaller stores. For example, a travel essentials concept has been introduced with WHSmith, replacing the more traditional books and news outlets and offering pas-

The airport has brought in a plethora of new luxury brands to cater for the changing demographic now visiting Australia

AIRPORT NEWS: SYDNEY AIRPORT

sengers a number of essential products for their journey. Technology will play a key role in the redeveloped T1. Sydney Airport offers passengers free apps and in-terminal Wi-Fi, while a recent digital initiative with China’s leading social media platform WeChat targeted Chinese passengers prior to their arrival in Sydney. “We are seeing a change in the next generation of Chinese passenger,” comments Williams. “They travel in smaller groups, rather than package tours, and conduct up to six months of research beforehand, looking at specific websites. It is important for us to educate them as to our exciting offering, so that they know exactly what to expect on departure and plan their time at T1 accordingly.” Although it is still early days with engaging Chinese passengers via WeChat, Sydney Airport has already experienced a 500% increase in Chinese followers in the last six months, and the retail marketing team is looking into other ways of reaching out to global customers through digital platforms. It was important for Sydney Airport that the redesigned T1 embraced a strong ‘sense of place’. Popular Australian brands, such as Australian Way and renowned Australian food brand, Kitchen by Mike,

Customers to Benny Burger can admire the iconic city skyline whilst eating

which showcase the best of the country, have been introduced to T1. Furthermore, the terminal has been redesigned to incorporate a raised roof that will allow diners to enjoy sweeping views of Sydney’s city skyline at the soon-to-open City View precinct.

The marketplace is an example of the new relaxed vibe at terminal 1

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

“We’re striving for Sydney Airport to be seen as a major shopping destination in its own right,” concludes Williams. “We’ve brought in brands that would wow Australians and our visitors, unique retail experiences that we believe showcase the best of global and the best of local.”

POPULAR GUESTS AT ANY PARTY

YOU CAN NEVER BE TOO GENEROUS

RETAILER NEWS: HEINEMANN

A rapid

touch down by

REBECCA BYRNE

German travel retailer, Gebr Heinemann has seen a year of change at Sydney Airport since the company won the duty free contract

T Constantin Wiesmann, Managing Director Heinemann Australia

Heinemann has an exciting food and beverage offering throughout its stores at Sydney Airport

o say it has been a busy year for Heinemann at Sydney Airport is an understatement. At midnight on February 17, 2015 during Chinese New Year, one of the busiest times for airports in Asia Pacific, the company took over from Nuance as Sydney Airport’s duty free partner. Just a few hours later, 5,000 square meters of retail space was rebranded and restocked. By 6am, the company was ready for business. Entering the Australian market was an important milestone for Heinemann in Asia. Constantin Wiesmann, Managing Director Heinemann Australia, describes winning the seven and a half year contract at Sydney Airport as an exciting new chapter in the company’s history. Already successful in South East Asia, with ventures such as Be Duty Free in klia2, the first foray into Australia was key to the company’s global strategy.

Local Australian wines are popular with the international travelers

The cosmetic and perfume category has seen the strongest increase in sales growth

However, as Wiesmann explains, this was only the beginning: “We opened with the existing structure knowing that over the next year terminal 1, where our main store was situated, would be completely transformed. As a result, in the last 14 months, we have refurbished every square centimeter of space, reconfigured the entire layout and extended our footprint to 8,000 square meters.” The stores at Sydney Airport are instantly recognizable as Heinemann duty free. There is the corporate feel with the distinctive category signage and fixtures and fittings, such as its unique concrete tiling and high quality wooden floors. However, the company has also adapted to the Australian market with the larger personalized branded areas popular in the region. What makes the store truly local is the homage to the iconic Jacaranda trees seen throughout Sydney. Across the stores visitors can see illuminated tree installations giving the space a ‘sense of place’.

Heinemann has introduced over 400 new brands to Sydney Airport, significantly increasing the product variety. The main departure store in T1 is the world’s largest duty free store in one footprint at 5,700 square meters. Here shoppers can peruse a full offering of luxury watches such as Omega, IWC, Logines and Frederique Constant; jewelry from Kailis, Swarovski and local Samantha Wills; and electronics in partnership with JB HiFi; as well as an eclectic food and beverage offering with exclusive Australian brands such as Trippas White Group in collaboration with internationally renowned chef Luke Mangan. The 3,000 square meters of increased space has enabled Heinemann to greatly augment its popular cosmetic and perfume offering. Due to the increase in brand choice, space and visibility, this category has seen the strongest increase in sales over the year.

RETAILER NEWS: HEINEMANN

The stores at Sydney Airport are instantly recognizable as Heinemann duty free with the unique concrete tiling and high quality fixtures and fittings

Heinemann has been mindful to cater to the airport’s key demographic with its brand selection. “The largest percentage of our customers are Australians who are passionate about their country and like to take presents from Australia all over the world,” comments Wiesmann. “As a result, we have brought in more local products such as Pana Chocolate, quality Australian chocolate, as well as popular brands of local gins like Four Pillar, Archie Rose and Melbourne Gin Company.” Visitors from China, the second largest market, are also provided for with specialist brands. For example, Heinemann offers an extensive selection of ‘health and wealth’ products such as nutritional supplements from Swisse and Blackmores. Equally important is the extensive range of international brands that Heinemann has introduced, bringing in exciting new names such as: Jo Malone, Armani Cosmetics, Tom Ford, Nars, Bare Minerals and Urban Decay in perfumes as cosmetics; and Ferragamo, Bally and Fendi in the fashion category. Many more will be joining in the near future, such as La Neige, Jimmy Choo and Zegna, some making their debut at an Australian airport. Working through such a challenging refurbishment in such a short time period has strengthened the relationship Heinemann has with Sydney Airport management. “The partnership has

grown over time and the airport has been very supportive,” says Wiesmann. He is equally enthused about the new layout, which has removed the winding path through the duty free store in preference for a straight path with Heinemann Duty Free on one side and direct lease stores on the other. “The new structure gives passengers a lot more space in terms of shopping and flow. Crucially there has been an improvement in orientation, passengers now know how long they have to get to their gate and this has led to them spending more time browsing the duty free offering.” Wiesmann also comments that the raised roof has created a lighter, more relaxed environment. Looking back over the year Wiesmann says: “It is good to see that the hard work and the passion we put into the business in the past 14 months have paid off. We took over a developed shopping environment and transformed it. The fact that we are seeing double-digit improvement in sales and passenger spend shows that we are on the right track.” And as for the future: “We are not finished yet. There is a long list of initiatives we are looking at to develop our business and we are collaborating closely with our partner, Sydney Airport.”

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Q&A: TFWA

The future is bright Erik Juul-Mortensen, President of Tax Free World Association

rik Juul-Mortensen, President of Tax Free World Association, is in no doubt about the long-term opportunities presented by the Chinese traveler, despite the spending slowdown by this vital passenger group. In an interview with Asia Duty Free, Mortensen sets out how the Chinese traveler is changing, and how the industry should react to the new order. He identi-

fies the key countries to watch across the Asia region and offers sage advice to the industry as it grapples with many geopolitical and economic challenges. But his main message is clear and simple: the industry has faced turbulent times before, and the future is bright – if industry takes the right approach. Asia Duty Free: China and Chinese travelers are impacting the industry in a

Tax Free World Association Asia Pacific tradeshow & conference in Singapore

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

huge way, especially now with the slowdown. What role will they play in coming years? Will there be a new “Chinese traveler” that retailers will be going after? Erik Juul-Mortensen: The Chinese traveler will undoubtedly continue to play an important role in the global travel retail market, both at home in Chinese airports, and when traveling abroad.

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But the typical Chinese traveler is indeed changing. In the past, Chinese passengers would often travel in groups, but now we see more families and couples planning their travel individually. They are also venturing further afield to new destinations such as Hawaii and the US. The growing Chinese middle-class is traveling more and more frequently, and as a consequence we are seeing a shift in the demands from the Chinese traveler. Chinese customers are keen on luxury brands, but whereas previously this would have predominantly meant Western names, there is now a growing number of Asian premium and luxury names. One customer’s mid-range brand is another’s luxury purchase, and we need to take these varying perceptions into account too. ADF: What are some emerging countries in Asia that we should keep an eye on? EJ-M: According to the latest report from ACI, passenger numbers were up by 10.6% year-on-year across the region, and there is no reason to believe this impressive trajectory won’t continue. China saw growth of 11.2%, while growth in India

registered a hike of a breathtaking 16.4%. Thailand, Korea, Hong Kong and Singapore also grew by double digits at 14.7%, 12.3%, 13.3% and 10% respectively, making them also very worthy of watching in the coming months. ADF: How do you see big retailers coping with and reacting to geopolitical tensions, exchange rate fluctuations, etc? EJ-M: Of course the uncertainty we are seeing now is not helpful and some retailers (and brands) are undoubtedly feeling the pinch. But we have to remember that we have been through turbulent times before and we need to take a long-term view on the current difficulties too. ADF: What is your advice to retailers, brands, distributors – the industry – on how to navigate through current changes? EJ-M: We need to keep coming up with imaginative ways to give shoppers reasons to chose to spend at the airport, be that ensuring that the assortment available covers the aspiration of the consumer group, enticing travel retail exclusives, or

innovative promotional initiatives that add real excitement to the airport shopping experience. Across the travel retail sector, we need to capitalize on the power of digital technologies to encourage sales, and this is no less the case in Asia. The price-conscious nature of the Chinese shopper, for example, means they are likely to research their planned purchases to look for the best value, and will often use apps and social media to do this. ADF: Is there light at the end of the tunnel? When can we expect things to stabilize? EJ-M: The growth in people taking to the skies shows no sign of slowing down. According to IATA, routes to, from and within Asia Pacific will see an extra 1.8 billion annual passengers by 2034, for an overall market size of 2.9 billion. In relative terms the region will increase its size compared to other regions to 42% of global passenger traffic. That’s got to translate into good news for our business, and undoubtedly the long-term future is bright both in Asia and beyond.

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ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

PEOPLE NEWS: CHANGI AIRPORT Star Wars created a buzz at Changi Airport in 2016

Change at

CHANGI by

REBECCA BYRNE

Teo Chew Hoon, SVP of Airside Concessions, Changi Airport Group

Asia Duty Free: What attracted you to the job at Changi Airport and what relevant experience do you bring? Teo Chew Hoon: Changi Airport holds a special place in my heart. I am proud of Changi Airport, because it is a shining example of the Singapore brand and one of the best airports in the world. Before joining Changi Airport Group, I was with Auric Pacific Limited. As its CEO of the Retail Group, I was in-charge of the food courts and restaurants business as well as franchise operations both locally and overseas. Prior to Auric Pacific, I was with SMRT Corporation as their Executive Vice President of their Commercial Division. During my 10-year stint there, I developed and managed the leasing of the retail spaces, as well as the media advertising business. I was also part of the team that conceptualized and transformed the retail offerings for all Mass Rapid Transport (MRT) stations. In addition to the role for commercial division, I was in 36

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

charge of the public buses, taxis, and autoservices (fleet management and maintenance arm) business for the company. Additionally, my experience includes a decade in the travel retail industry. I was the General Manager of DFS, Airport Operations, overseeing the travel retailer’s duty free operations at Changi Airport. So, Changi Airport is a familiar place to me and I had a lot of good experiences here. Many of the DFS ex-colleagues and people in CAG whom I used to work with are still at the airport. It is nice to be back working with them. With my past experiences in both the retail and transport industries, I hope to be able to contribute even more to the company. ADF: What are your hopes for your new role? TCH: The commercial team has done well. The business was already thriving when I joined the company. I believe that together with my 60-strong team, I will be able to further enhance the experience

and grow Changi Airport as a destination for the world to shop and dine in. My hope is that frequent travelers enjoy the airport every time they fly through and that travelers who set foot in Changi for the first time will come back for more. ADF: What are the challenges you see ahead for Changi Airport and for airport retail in general? TCH: People are becoming better traveled with the world becoming more connected. Shoppers are more discerning and informed of the choices they have. Therefore, we are conscious of the retail offerings and their value propositions to our passengers. In addition to offering a wide range of products and brands at competitive prices, we augment these with experience. The frontline staff at Changi goes through service learning training to ensure that the service rendered to passengers is of a good standard. We are always looking for innovative concepts to constantly refresh our retail mix and keep the airport shopping experience

Promotions such as the ‘Changi Millionaire’ aim to reward shoppers and create a compelling airport shopping and dining experience

Terminal 4 will open in 2017 with 17,000 square meters of retail and dining space

relevant and exciting for our passengers. These include new product launches and iconic local specialties. Together with our retail partners, we do our utmost to create a delightful and rewarding shopping, as well as dining, experience for our passengers. For instance, with the ‘Be a Changi Millionaire’ and year-end Christmas promotions, we reward shoppers and create a compelling airport shopping and dining experience for them. ADF: Why do you think that Changi Airport always tops the awards? TCH: Leadership is one of the key contributors to Changi Airport’s success. We are people-centric, both to our passengers and employees. In my time here in CAG, I am already very inspired by the company’s management team. They are very open-minded. They listen, spar, share their expertise and experiences, and are very open during discussions. This makes the company very dynamic and different. ADF: The new terminal T4 will be up and running next year, can you comment on its progress? TCH: Construction for the terminal is currently ongoing, with the terminal’s

super structure and façade recently completed. When operational in 2017, the full-service terminal will have an annual handling capacity of 16 million passengers, more efficient passenger processing, quicker aircraft turnaround and a full suite of amenities, including more retail and dining outlets. On the retail front, the two-story terminal with a total space of 195,000 square meters will have 17,000 square meters of retail and dining space for more than 80 outlets. We’ve made good progress leasing the retail spaces at the terminal. Brands which have confirmed their footprint in the terminal include Desigual, Michael Kors, Charles & Keith, TWG Boutique, Bengawan Solo, Bee Cheng Hiang, just to name a few. Leasing the rest of the retail space is expected to be complete by end of 2016.

I am a highly motivated person. I believe in 活到老学到老 (never too old to learn). Continuous learning happens every day and it helps me to grow and it spurs me on.

ADF: What do you love about the new job and what drives you to succeed? TCH: Changi Airport is already one of the best airports in the world and has won many accolades. I hope to be a positive change agent in making it an even better place, where it is a destination as well as a part of the journey where our passengers and customers enjoy.

ADF: And finally, what do you like to do outside of work? TCH: When I am not working, I like to spend time with my family. Chatting, eating out, going for movies are some of the things we do as a family. No matter what we do, it’s about enjoying each other and catching up.

ADF: What has been your biggest achievement to date? TCH: One humble accomplishment was being a part of the SMRT team that transformed the retail experience across the entire network of MRT stations. The transformation was a successful change. We added convenience, vibrancy and provided a refreshed experience to commuters. On the personal front, my happiest and greatest achievement is being a mother to two lovely children! Being a parent teaches me many valuable things and is very satisfying at the same time.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

GUEST WRITER: M2MOBI

Travel retail enters the digital age Combining digital and traditional in-person shopping has potential to revolutionize the passenger’s travel retail experience by

MICHIEL MUNNEKE, Director & Co-Founder, M2mobi

ven though passenger numbers have been increasing, the average revenue per passenger is decreasing. Now that passengers have the ability to compare products online, the idea that duty-free products are cheaper is long gone. Still, we don’t see an urge to digitally innovate within travel retail. If we look at the high street, we’ve seen many brands struggling because they didn’t adapt to the new digital reality. Consumers who order online expect more variety, better prices, and faster service. The brands that are surviving on the high street, are the ones that have embraced the digital revolution and are continuously improving their omnichannel strategy. That is, these brands are combining the strength of a digital and a physical shopping presence. So why aren’t we seeing this trend in airports around the world? Is it because digital just doesn’t work in travel retail? Or is it because airport retailers just don’t know how to apply digital yet?

Because passengers have to be at the airport on time, they are more or less forced to use the shopping mall that is built around it. That’s one reason why travel retail hasn’t been hit as hard by digital as high street has. However, passenger expectations have changed. These days, they expect a personal approach and online shopping mixed with the offline experience. They are scanning products to see if they can buy them cheaper online and have them shipped to their homes. This behavior is only slowly starting to affect airport retail sales and the revenue per passenger. And, most airports are still resting on their comfortable nonaviation revenue streams, all the while not realizing they need to take urgent action in order to keep their customers satisfied.

Integrating physical and digital shopping At M2mobi we work to bring a variety of brands into airports including Schiphol, DFW, Paris CDG, and DXB. We want to use our passenger knowledge to help

Four points in time define the travel retail experience, and each has opportunities for increased shopping time, both online and in-person shopping

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

brands like G-star and Heineken reach their customers in a meaningful way. In airport retail, we always start with the passenger but when looking at digital shopping possibilities within travel retail, we need to start with the customer. They are already highly accustomed to online shopping and direct services via mobile ordering. Their established online habits have given a whole new range of possibilities to the retailers who have the right ingredients in place. The beautiful thing about mobile and wearable connected devices is that they create the opportunity to combine digital shopping with the physical shopping experience. And being primarily physical, this is where it gets exciting for travel retailers. Recognizing the customer in a shop gives retailers the chance to become personal in terms of knowing what this person likes, what he has bought before and whether he deserves special treatment. Bluetooth beacons can be a powerful tool to enable a personalized approach in airport retail shops. Since GPS does not work well inside buildings, it becomes hard to know where passengers are within an airport. But, by strategically placing Bluetooth beacons, an app can recognize the beacon’s proximity and thus determine that this person is in your shop.

reduce passengers’ stress levels will create trust, and therefore confidence, that there is enough time to relax in the lounges, go shopping, and do things that improve the total travel experience. Decreases in passengers’ stress levels will result in revenue increases. Apart from the relaxed passenger who has more time to spend in the lounges, there is also a more direct business model, mCommerce. The duty-free zone is a perfect place to shop, but what if you could already figure out which shops to go to and which items are on sale before you got there? Also, why should you drag all those bags with you during your trip if you don’t really need them?

From taxi service to food and fun, passengers need and want a variety of services while en route and online

If done well, you can set up your digital systems in such a way that customers can connect to their profile and receive personalized suggestions. On the other hand, the physical shopping experience is also rife with personalized opportunities. You can help the staff along in this direction by giving them background information about the customers who are in your shop. Saying something as simple as “Hello, Mr. Munneke. How did your wife like the perfume you bought for her last month?” can go a long way in building a memorable, personalized shopping experience. The problem is that most travel retailers don’t have their systems set up right for this personal attention. Most of them are still stuck in retail’s middle ages and lack things like a product information management (PIM) system with all their SKU’s nicely documented; an ecommerce platform in which their customers can actually buy things; or even a customer relationship management (CRM) system, loyalty program, or targeted advertisement system.

sengers carry a smartphone now . When mobile check-in is available, it is used by more than half of the passengers, and 9 out of 10 passengers want flight status on their mobile. This indicates that there is a strong demand for a passenger journey during which mobile is the primary touchpoint. We believe that this mobilefirst approach is the way to go for airports, retailers and airlines the coming years. Setting up this mobile-first strategy will lay the foundation for many innovations.

Business model The prime business model leads back to the main passenger problem: stress. When passengers have to run to their gates only to experience the frustration of having to sit and wait for their flights, stress results. M2mobi is convinced that finding ways to

Digital Services and mCommerce Not only should passengers enjoy the majority of their time in an airport, but this enjoyment can be extended if they can access the airport services digitally. There are a lot of possibilities pre- and post-travel to create an integrated online and offline travel experience. The aim here should be to create a kind of “Uber for airports” where all the available services of an airport will come to you with a single tap. This means you can have a coffee delivered at the gate, or a rental car waiting for you right outside the main exit. Passengers can browse the collection on their way to the airport and use the showroom to select and get a better feel for the products. Ultimately, passengers want to have single-click services experience.

Opportunities At M2mobi, we think the opportunities are vast within a passenger’s journey of the airport, especially if key flight information, wayfinding and leisure elements like shopping and food are integrated into a single flow. Every mobile travel service that has been introduced has seen a quick uptake by passengers. Eighty percent of pas-

Eight factors contribute to a passenger’s personalized shopping experience

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

GUEST WRITER: M2MOBI

Location determines special product offerings in Dubai and Tokyo, while pre-flight wait time and the time of day can influence meal promotions

Personalized offers & recommendations At Schiphol Airport, 21% of the passengers have indicated they did not shop because they did not get a relevant offer. If the airport knows their flight, their gate, their shopping history and their preferences, why can’t it be more personal in its offerings? Personalization and context are key to creating an experience that is relevant to the user. With such a wide range of services and products to offer, we need to be able to get this right. There is no use in offering a parking spot to someone

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Conclusion who travels by train or to send offers to passengers who are in a hurry to board their plane. There are a lot of factors and existing data that we can use to predict whether a certain passenger might be interested in a certain offering. In the above image, eight factors that can affect the level of personalization a passenger experiences are shown, ranging from the passenger’s location to his final destination. Obviously, time is an important factor in these offerings. For example, the time of day defines whether to offer someone breakfast or lunch.

There is a long way to go for airport retailers to catch up with high street. The situation is different, so a different approach should be taken. Travel retailers have taken the first baby steps, but now it is time for a serious change. Simple solutions like hiring a digital manager won’t do the job. Rather, it is time for a company-wide sea change in which every retail employee understands and embraces the new digital opportunities. If they get this right, there is a lot to gain for the airport, the passenger and the retailer.

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INDUSTRY NEWS: M1ND-SET

m1nd-set questioned travelers about whether they were aware that liquids regulations had changed after January 31, 2014. The Chinese (14%) and Thais (16%) were significantly more likely than other nationalities to know about the new regulations and the details of these changes

A must-have service The latest surveys from travel market research firm m1nd-set demonstrate the value of travel retail shopping as part of the airport experience for both leisure and business passengers by

HIBAH NOOR

pecialist travel market research firm m1nd-set has studied the impact of security and regulations on Asia Pacific travel retail shopping and food & beverage consumption, with interesting results. The company questioned 2,287 travelers (75% men and 25% women), with more than half aged over 41. 42

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

The information level about the restrictions on quantity of liquid that passengers may carry in their hand baggage through security was high for nearly 80% of the travelers surveyed. For about one third of travelers, the security restrictions on liquids trigger an increase of the amount of non-alcoholic drinks purchased after the security check at the airport. Some 35% of travelers stated that they “buy more at the airport because they are not allowed to bring drinks from outside”. However, 61% said that the security measures don’t affect their purchasing behavior. Security restrictions are the reason why nearly 70% of shoppers in the relevant categories refrain from purchasing

m1nd-set’s Owner and CEO Peter Mohn

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INDUSTRY NEWS: M1ND-SET

Security restrictions are the reason why nearly 70% of shoppers in the relevant categories refrain from purchasing liquids in the duty free shops

liquids in the duty free shops. m1nd-set notes that this highlights the importance of increasing the passengers’ information level about security restrictions and new regulations concerning liquids. A significant negative correlation can be found between the perceived level of information about the security restrictions on quantity of liquid and the likelihood of refraining from purchasing liquids (e.g. perfumes, alcohol) at the duty free shops. This means that the less informed travelers are about security restrictions, the more likely they are to refrain from purchasing liquids in duty free shops. In the case of China and Australia, for example, both the share of people “not being well informed” and the share of people who “refrained from purchase” were significantly higher than the total. m1nd-set then questioned travelers about whether they were aware that liquids regulations had changed after January 31, 2014. The Chinese (14%) and Thais (16%) were significantly more likely than other nationalities to know about the new regulations and the details of these changes. Turning to hand baggage allowances, the perceived information level about airlines’ hand baggage allowances (such as the one bag rule) was relatively low for almost 50% of the travelers. The information level about the customs regulations on alcohol and tobacco in the home country and the countries respondents travel to was high for nearly 60% of the travelers questioned. Asked whether they ever refrained from purchasing products such as alcohol 44

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

and tobacco in the duty free shop because they were unsure of the customs regulations in the destination country, 49% said they were sometimes afraid that the products bought wouldn’t be allowed at customs. The Japanese were significantly more likely than other nationalities to refrain from purchasing alcohol and tobacco because they were unsure of the customs regulations in the destination country (64%). In a separate survey of 2,287 business and leisure travelers, m1nd-set aimed to gauge the satisfaction, relevance and importance of various airport services. When traveling for business, a fast, easy and efficient process (at the check-in, at the security check, etc.) was the top priority for passengers. Quality of the airport lounges was the top priority for 57% of business travelers, while value for money at the duty free shops was cited by 32% of passengers, and quality of the shops and the duty free offer was cited by 28% of the sample. When considering “nice extra” airport services for business trips, duty free shops gained more importance, as they were considered the top “nice extra” services. “This underlines the value of travel retail shopping as part of the airport experience,” notes m1nd-set’s Owner and CEO Peter Mohn. Only 11% of the travelers considered duty free shops as an “irrelevant” airport service. However, more travelers (21%) mentioned that other airport shops were irrelevant as an airport service. The research showed that 10% were very satisfied with the quality and variety of the offer at the duty free shops, with

44% saying they were satisfied and only 8% were very unsatisfied. Turning to value for money at the duty free shops, 7% said they were very satisfied, with 32% satisfied and only 3% were very unsatisfied. As for leisure passengers, a fast, easy and efficient process (at the check-in, etc.) was the top priority for passengers, as for business trips. The share of travelers who considered duty free shops as a “must have” service increased when traveling for leisure. The quality and variety of the duty free offer was a “must have” for 37% (compared to 32% for business travelers) and value for money was a “must have” for 40% (compared to 28% for business travelers). When considering “nice extra” airport services for leisure trips, duty free shops gained more importance, as well as for business trips. “This underlines once again the value of travel retail shopping as part of the airport experience, even though the percentages were slightly lower than for business trips,” says Mohn.

When considering “nice extra” airport services for business trips, duty free shops gained more importance, as they were considered the top “nice extra” services

INDUSTRY NEWS: I2I GROUP CHINA

Hey, big spender! i2i Group China’s CEO Alexander Glos discusses the Chinese shopper’s spending habits and how i2i is targeting an attractive subset: the repeat traveler by

HIBAH NOOR

2i Group is a consultancy that specializes in analyzing Chinese market trends, and Asia Duty Free recently sat down with Alexander Glos, CEO of i2i Group China, to discuss the latest developments with regard to this important duty free shopper demographic. He told us that the big Chinese shopping trend in the second half of 2015 was the significant increase in shopping by the Chinese in Europe. “It was good before, but in the second half of 2015 it was explosive,” Glos said. “Global Blue reported their refund processing grew 72% year over year. This is largely due to the exchange rate shift; today, the Euro is cheap compared to the US Dollar for the Chinese. As a result, they are flooding Europe.” Glos said that globally, the inbound Chinese traveler market is growing rapidly— for example to the USA, from 2.2 million last year to a projected 5 million by 2020. What’s more, repeat travelers, which currently count for 1.4 million Chinese, spend an average of nearly US$10,000 on luxury shopping. While he notes that these travelers are particularly attractive targets for duty free, he concedes that they’re a hard group to reach given that they’re independent travelers as opposed to part of a homogeneous group. “Many brands are now focused on how best to align the flow of goods with the flow of qualified and capable Chinese buyers,” Glos added. “Fully 80% of Chinese luxury purchases originate outside of China because Chinese consumers prefer the retail experience of buying abroad. Furthermore, they enjoy sharing their experiences with their friends and colleagues through social media.”

Facts and figures Glos cited a number of sources which indicate that despite widespread economic turbulence in many markets throughout the world, Chinese tourism and shopping continues strongly. China 46

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Luxury Advisors notes that the Chinese slowdown isn’t changing the amount of travel, but rather the nature of it. This includes fewer long-haul trips among the middle class and a lower average spend, but one that is still strong compared to other nationalities. Backing up Glos’ claim that Chinese travelers prefer shopping outside the country, China Luxury Advisors says that figures indicate that Chinese consumers currently spend US$229 billion per year outside China. This amount is projected to double by 2020. Glos cited a number of other sources which suggest that the boom in Chinese shopping isn’t going away anytime soon:

“Fully 80% of Chinese luxury purchases originate outside of China because Chinese consumers prefer the retail experience of buying abroad. Furthermore, they enjoy sharing their experiences with their friends and colleagues through social media.” ALEXANDER GLOS, CEO OF I2I GROUP CHINA

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INDUSTRY NEWS: I2I GROUP CHINA

i2i Group China has developed a new publication called Galerié, which is distributed to Chinese travelers when they apply for their travel visa in China

•

According to marketing organization BrandUSA, Chinese visitors to the US spent a staggering US$24 billion in the country in 2014. China is the second-largest inbound travel market for the US, according to China Daily USA. More than 2 million Chinese visited the US in 2014, and this number is expected to increase. Ctrip, China’s top online travel booking service, says that the number of Chinese tourists who booked trips during China’s national holiday increased by 150% in 2015 over the previous year. Furthermore, shopping remains a major focus, with 36% of Chinese tourists surveyed by Ctrip selecting shopping as the purpose for their trip. Given the Unites States’ decision to offer 10-year visas to Chinese nationals from November 2014, more Chinese travelers are planning on visiting the US on their own as opposed to travelling as part of a tour group, says Ctrip. Los Angeles, New York, Honolulu, Las Vegas, San Francisco, Washington D.C., Boston, Orlando and Chicago are the top US destinations for independent Chinese travelers. Appraisal firm Miller Samuel suggests that precisely because of the economic upheaval within China, more money may finds its way into the US, particularly in residential and commercial real estate.

Reaching the right people i2i has developed a new publication called Galerié, which is distributed to Chinese travelers when they apply for their travel visa in China. Importantly, the magazine reaches the attractive repeat traveler target group since these travelers apply through CITIC Bank for their visas. The magazine is distributed across all CITIC Bank locations across China.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

And there are other advantages to this approach, explained Glos: “What is particularly attractive about this way of distributing the magazine is that each of these travelers is unique because one does not typically apply for a visa several times a year. Rather than a typical magazine hitting the same readers multiple times a year, in this case we get all new readers with each issue.” It’s easy to see why advertising in the magazine would be an attractive way for brands and retailers to reach these travelers, but i2i has taken the quest to connect advertisers and shoppers one step further with its Wechat platform. “Wechat is sort of a customer relationship management platform for our advertisers,” Glos said. “We have over 350,000 members in our Wechat platform, allowing us to connect the advertiser to the reader on an ongoing basis.” Given the above, Glos told us he sees Galerié as much more than simply a magazine. “It’s a print and digital publication, but also an integrated marketing solution that enables luxury and premium brands to build a customer base that consists of their target shopper. The magazine reaches an impressive 640,000 repeat Chinese travelers every year.” Another advantage to this approach is that Galerié’s readers are virtually guaranteed to travel given that they receive the magazine upon applying for a visa. “No one in China is getting a visa for fun,” quipped Glos. “They are getting a visa because they are traveling.” Most Galerié readers are going to the US, and Glos told us that nearly 80% will travel within 90 days. “The bottom line is that Galerié offers retailers, brands and service providers an ongoing marketing and communications package that keeps them in contact with a very attractive group of travelers not only as they are making their travel plans, but also during pre-departure, while they are in the US and for months afterwards,” Glos concluded.

RETAILER NEWS: LOTTE DUTY FREE

The 6,162 square meter Lotte Duty Free Jeju store opened in 2015

Global

Ambitions Lotte Duty Free is increasingly looking overseas for new stores as it continues to dominate the Asian duty free market by

Kim Bo Joon, Marketing Director Lotte Duty Free

ASIA DUTY FREE & TRAVEL RETAILING TFAP MAY 2016

REBECCA BYRNE

otte Duty Free received a shock at the end of 2015 when it lost the lucrative license for its World Tower store, situated in downtown Seoul. However, this has not stopped the company pushing forward on its goal to become the leading global duty free shop as it targets international stores as well as growing its domestic footprint. Asia Duty Free talked to Kim Bo Joon, Lotte Duty Free’s Marketing Director about the company’s plans for 2016. According to Kim, the domestic market - which is the number one duty free market in the world with annual sales of 9.2 trillion won (US$8.2 billion) in 2015 - is becoming increasingly competitive. As a result Lotte is looking overseas for its expansion plans, targeting the newly affluent Asian consumer who travels regionally and is spending increasing amounts on duty free goods at airports, and downtown department stores. Currently, Lotte is the world’s third largest duty free retailer, however the company has ambitions to become the global leader.

At its Busan store Lotte Duty Free offers a selection of items in all categories

Lotte will be adding 2,760 square meters of space at its flagship Sogong downtown store in Seoul

The Lotte Duty Free store at Gimpo Airport mostly caters to tourists departing to Japan and China

Lotte Duty Free has the largest store at Seoul’s Incheon Airport

The Lotte Duty Free COEX store is located in a popular tourist destination near the affluent Gangnam district

Recent years have seen the company open stores at Japan’s Kansai International Airport as well as Guam, Singapore and Indonesia. Already, this year, Lotte has opened the biggest duty free store in Tokyo at 4,396 square meters, and plans are afoot to launch its first outlet in Bangkok, Thailand. Lotte has also announced its intention to open in Japan’s Osaka. The 4,400 square meter store will be located on the sixth and seventh floor of Big Camera Namba department store and sell global luxury brands, cosmetics, perfumes and fashion accessories. The company aims to achieve sales revenue of 130 billion won (US$113 million) in its first year of operation in 2017. The furore following the recent license awards led to the Korean government announcing plans to expand the license period from five years to 10 years. Kim comments: “We welcome the decision in terms of the investment stability.” The government will also consider issuing more licenses for duty-free shops. In response Kim says: “Regarding the new licenses, there’s nothing we can say specifically since there’s no fixed announcement

from the government for new licenses, but we are expecting it.” In the meantime, Lotte has injected fresh investment into its flagship downtown Sogong store in Seoul. Currently on three floors, Lotte will be expanding onto a fourth floor during 2016. The project, approved last year by Korea Customs Service, is under construction and will be completed within several months. Adding 2,760 square meters of space, the new floor will enable Lotte to enlarge its Korean cosmetics offering, a category increasingly popular with Chinese visitors. Lotte continues to support its sales with events and promotions popular with its customers. In April, for example, the company held its highly anticipated annual family festival, where customers were entertained by a string of top K-pop stars, and meet and greets with star models. With annual sales increasing more than 10% in 2015, international projects in the pipeline and domestic potential, Lotte Duty Free is on the right path to achieve its stated ambition to lead the duty free market.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

FASHION: FURLA

The facade of Furla’s flagship boutique in the prestigious Miramall shopping center in Tsimshatsui, Hong Kong

Plenty of growth in store Furla has seen its sales snowballing in Asia Pacific travel retail, thanks to rapid store expansion in key tourist hotspots that attract Chinese travellers

remium/affordable luxury brand Furla has been celebrating a spectacular year in travel retail, as turnover surged 36% in 2015 compared to the previous year – and in Asia that growth was an impressive 20%. But the company’s ambitions don’t stop there under its dynamic Global Travel Retail Director, Gerry Munday. The Italian accessories brand has begun trading in a number of Asian duty free locations this year, having recently opened with DFS in Siem Reap, Cambodia, and Okinawa Airport North and South Wings and in the Okinawa Galleria in Japan. This year, it will also

be opening in Siem Reap Airport, Bali Airport, Kaohsiung Airport, a further location in Taoyuan Airport and a boutique in Myanmar. Munday passionately believes that a presence in travel retail – particularly airports – can be a very valuable way for a brand to build a presence on domestic markets. “We often hear of airports being referred to as a shop window of the world for a brand, and for sure, the premium customer profile of international passengers with 60% being A and B is a significant draw,” she says, adding that airports can be the perfect way for brands to grow their global awareness and also to use Furla’s store at Shanghai’s CITIC Square commercial area in the Jing’an district is one of 24 stores the brand has in mainland China

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

them as a platform for product launches. “They are a great way to reach the growing middle classes of emerging markets – look at China in the past few years. And in terms of marketing potential, airports offer the possibility to create engaging activations and theatre, regardless of the category.” Certainly, Furla has an impressive presence in the Asian domestic market since it entered the region in 1991. The company now has a total of 196 points of distribution throughout Asia domestically, in either boutique or corner format. The brand is present in Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Macau, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Of this total, it has 158 boutiques, shop-in-shops and corners, and 38 outlet stores. Furla’s biggest presence domestically in one single market is Japan, where it has 66 stores and 15 outlet shops, followed by China with 24 stores and 10 outlet shops, Hong Kong with 11 stores and two outlet shops and Korea with nine stores and three outlet shops. Speaking of China only, Furla’s biggest outlet store is Guangzhou Foshan Florentia Village, covering 150 square meters; and in the Asia Pacific region as a whole, the largest is Melbourne DFO South Wharf, measuring 210 square meters.

FASHION: FURLA

The company’s burgeoning domestic business has a direct impact on the travel retail business, according to Munday. “Most definitely, our domestic and travel retail businesses in Asia have a real synergy,” she says. “As our business develops on a domestic market, so of course we become a must-have brand in travel retail. Asia is different to other regions because downtown duty free outlets play a very important role – for example in Korea we have 13 corners in downtown duty free shops in Busan, Jeju and Seoul, as well as distribution at Seoul Incheon Airport (where we have four separate corners) and Gimhae International Airport, Busan. Indeed, in Korea we have more travel retail/duty free outlets than domestic – and that’s because the key customer focus is the Chinese shopper.” In Greater China, Furla now has 39 stores and shop-in-shops and 14 outlet stores, and the brand presence is very strong. This has played a major role in helping the brand to grow its travel retail presence and it now has five shops and four corners in China, plus a corner in Macau.

This store in Hong Kong’s Miramall shopping center is one of 11 Furla boutiques in the city targeting Chinese travelers

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Taiwan is a similar market. Furla has a strong presence in travel retail with seven corners at Taipei Taoyuan Airport, Taipei Songshan Airport, Taichung Airport and downtown – again targeting primarily the Chinese shoppers – supported by two shops and two outlets on the domestic market. Currently, there are some markets where Furla is present domestically but not in travel retail – India, Indonesia and Vietnam. “As we see further development and upgrade in the airport commercial offer in these countries, I am sure there will be retail possibilities for Furla in the future. It’s vital that the environment reflects the DNA of the brand.” And conversely, the only market in Asia Pacific where it has a travel retail presence only is Cambodia, where there is a corner at Phnom Penh International Airport operated by Dufry. Munday believes that synergies between the domestic and travel retail businesses are important everywhere – the businesses have to be aligned in terms of strategy, brand image, merchandising, product, etc. She explains: “Travel

retail has the benefit of often enabling us to present the brand to consumers less familiar with Furla – who are coming from places where the brand is not immediately available to them. What’s always essential for us is that we are present in an environment that reflects the DNA of the Furla brand and is representative of what the consumer will see on the domestic market. We can also offer a point of difference, though, which is why we’re now including travel retail exclusive lines within our portfolio.” In terms of domestic growth, Asia Pacific is of “major significance” to Furla, Munday says, with Japan accounting for 23% of its consolidated turnover in 2015 and the rest of Asia Pacific making up 19% of sales. “Overall, we saw 30% growth globally for the Furla brand but geographically Asia Pacific enjoyed a massive 53% growth and Japan 24%, which shows the continuing dynamism of the region – even though we know there are challenges,” she says. Munday adds that within the Asian region, apart from Japan, the brand is seeing the most growth in China.

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EDITOR’S CHOICE

Little travel treasures From cooling pillows to stylish men’s and women’s jewelry and watches, there’s something tempting for every keen traveler this season

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1. Tateossian Gear Cufflink: The most popular Tateossian cufflink is an evolution of the idea of movement. This gunmetal-plated cufflink is made from individual gears in varying sizes in multi colours that rotate freely by gently moving the gauge

4. Pierre Cardin: Revamped jewelry brand Pierre Cardin is introducing men’s and women’s watch sets with a popular NATO strap design. More striking colours will be added to the watch and jewelry sets, along with more traditional designed pieces

2. Toscow Dolce Vita Collection: Crystals in delightful colors and in various shapes are all incorporated harmoniously into the Dolce Vita collection. Consisting of three necklaces, two earrings and a ring, the highlight of the collection is the signature bangle

5. Victoria’s Secret xo, Victoria: This vibrant floral fragrance is inspired by the refreshing energy of springtime and is a free-spirited twist on the original Victoria fragrance. Sparkling citrus notes give it a sunny feel, while hints of English ivy add woody warmth

3. Lindt Swiss Masterpieces Mini Pralines 150g: Exclusive to travel retail, this selection of 25 miniature chocolates comes in an elegant gift box. Also available is the Swiss Masterpieces value gift pack of 3x145g, which is ideal for travelers seeking gifts

6. Perfume Holding Fragrance iPhone Case: This innovative fragrance iPhone case protects your phone while holding your fragrance. Ensuring that the juice won’t come into contact with any part of the phone, the case comes pre-filled with 25ml of fragrance and an additional 25ml refill

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

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7. Godiva Christmas Collection: This festive range includes a chocolate assortment, a truffles collection, an advent calendar and a pouch of chocolate carrés, all decorated in seasonal green and white designs which were created by talented artist Dinara Mirtalipova

11. Travel Blue Cool Pillow: This pillow with memory foam helps travelers feel comfortable and not overheat throughout their sleep. The pillow produces a natural, lasting, cool and comforting sensation, thanks to refreshing cool pads that are integrated into the cover

8. Rituals Sakura luxury bag: Exclusively available at selected duty free locations, Rituals’ new Sakura bag contains four of the most demanded products from the relaunched Sakura range. These beauty products were developed specially for your travels

12. Chloé frames by Marchon Eyewear: With strong vintage inspiration, this round, glamorous Jackson model is a sophisticated expression of the Chloé fashion spirit. The frame features unique metal temples that resemble a tennis racket

9. Tea Forté Teas From The Heart: This selection of soothing teas is suitable for any time of day. Each tea is a blend of aromatic flowers, fruits, herbs and leaves, and comes in a heart-shaped box, the company’s best-selling packaging

13. Vince Camuto Eterno by Parlux Fragrances: Inspired by modern gentlemen dressed in classic white, the fragrance is a woody aromatic fragrance that features citrus and mint blended with rich bourbon, sleek woods and vibrant spices

10. The Samba Metallics by Perfumer’s Workshop International: The eye-catching, bold, luminous, and shiny bottle and packaging colors were developed to catch the eye. Each fragrance was created to mirror the subliminal association of particular smells associated with either gold, platinum, pink, steel, ruby, and amber

14. Braun’s PrecisionTrimmer PT 5090 is a high-precision styling device with an edgy and masculine design that can be used in the shower. Its slim head ensures even trimming and precise edging of beard lines and three trimming combs allows for different length settings www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

JEWELRY: DYRBERG/KERN

Arm candy Dyrberg/Kern launches men’s collection at TFWA Asia Pacific

The launch of its first-ever men’s collection marks another step in Dyrberg/Kern’s plan to become one of travel retail’s leading jewelry brands

anish jewelry brand Dyrberg/ Kern comes to TFWA Asia Pacific with its never-beenseen-before travel retail collection for men. This exciting new collection adds to its already successful jewelry and watch portfolio, and has been introduced due to what the company sees as “an obvious gap” in the market place for men’s jewelry. The new launch is all part of an ambitious plan for the company, as Jacob Olsen, Travel Retail Manager, explains: “This is a very exciting time for Dyrberg/ Kern; the release of our men’s collection is another step towards our objective to become one of the leading fashion jewelry brands within travel retail. We have expanded into the men’s category because we felt there aren’t currently any jewelry brands in this channel that offer fashionable, stylish, trendy pieces, designed solely for men.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

“We wanted the collection to appeal to men that may not be used to, nor have ever thought about wearing jewelry before. To do this we have focused mainly on watches and bracelet sets, and excluded pieces like earrings and necklaces. We want men to feel comfortable wearing our jewelry, so each piece has been designed to look and feel young, funky; not forgetting rock ‘n’ roll!” The collection includes both armpieces and watches, taking inspiration from the street, which means that no matter your style – hipster, suiter, or just the jeans-and-tee type – there is a piece for you, says Olsen. The collection allows men to mix and match the styles, as all of the pieces have been designed around each other, to ensure they all sit well together. Henning Kern, Founder and CEO of Dyrberg/Kern, explains that wearing jewelry can complete a man’s look. “For too

long the perception has been that the only piece of jewelry you can carry as a man is your watch. Today, many men like the classic look of jackets, jeans, T-shirts – the more casual style – and with just the right simple piece of jewelry, you can actually add that extra sense of personality to your look, which we men also seek,” he says. “The right piece of jewelry can finalize your style and give a more complete look. The feel of our new men’s collection is solely focused on simple bracelets in genuine natural stone, leather, and steel, and watches that are expensive-looking – arm-pieces that you can use with practically everything you have on, whether you wear a sharp suit, or have a more casual style.” Retailing at between US$20 and US$150, the collection will offer both twin pieces and individual items to operators. Olsen adds: “As we do with all our collections, we will continue to be flexible with the sets we offer to our inflight and retail partners. This includes offering our customers the ability to customize their own sets to suit their individual passenger profiles, yet still ensuring that we maintain impulsive price points.” Visit Dyrberg/Kern at TFWA Asia Pacific show in Basement 2, D9.

FASHION: RADLEY

Bags of choice

A selection of Radley bags from its first full travel retail exclusive collection for Spring/Summer 17

Fast-growing affordable luxury accessories brand Radley is looking to triple its sales in the next five years across the travel retail channel, with growth coming from Asia in particular by

HIBAH NOOR

adley has been active in the travel retail business for over 15 years – and now it is ready to embark on serious expansion in the channel with a dedicated collection for travelers seeking premium accessories. Initially, the UK-based company developed a close partnership with World Duty Free Group (now Dufry), and then over the years the brand has extended its presence across different channels. Radley has a strong presence across 22 UK airports as well as in the cruise line industry, with Harding Brothers (26 ships), P&O (eight ships) and also airlines, such as British Airways, Virgin Atlantic, Thomas Cook, and Monarch. The last five years have seen the brand accelerate its international presence across all travel retail channels, particularly in Asia and the Middle East. Radley is now present in a number of airports across the region, including Dubai Terminal D and Doha as well as onboard Emirates and Singapore Airlines. The firm is currently in talks to get further exposure in the Asia Pacific region both directly or through strategic partnerships. Today, Radley’s focus is on areas of prospective growth, where it already has

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

a presence in the market or is about to enter. The priority countries are Japan, Taiwan, Hong Kong and China, Malaysia, the Philippines, Indonesia, Australia and New Zealand. “This said, we are always interested in all potential travel retail opportunities across the region, as we have a strong product portfolio and a distinctive brand which can delight customers across the world,” says Alessandro Petrelli, Head of International Sales at Radley + Co Ltd. Petrelli notes that Radley is already a well-established brand in Japan, Malaysia, and Taiwan, and is seeing rapid acceleration in Australia, New Zealand, the Philippines and Indonesia. Plans are afoot to launch the brand in Hong Kong and China by early 2017. “Our customers in the APAC region see Radley as a trusted,

affordable luxury British brand originating in London and love how the products deliver the perfect blend of unique design, quality material, craftsmanship and high functionality all at an affordable price point,” enthuses Petrelli. Over the next five years, Radley’s ambition is to develop a strong presence in the Asia Pacific and EMEA markets. “We are significantly investing both in terms of exclusive product offerings as well as brand support with all our partners in the regions. We want to become the preferred choice brand for travelers willing to purchase premium handbags and accessories in the duty free channel. In terms of sales, we are looking to triple our sales in the next five years across the travel retail channel, with main growth coming from EMEA and APAC,” says Petrelli. Radley will be previewing its first full travel retail exclusive collection for Spring/Summer 17 at the TFWA Asia Pacific show, alongside its Autumn/Winter 16 collection and capsule AW16 travel retail exclusive collection. For AW16, Radley’s in-house design team has also created another capsule exclusive travel retail range. The collection includes small leather and non-leather accessories, featuring the brand’s signature Scottie dog on appliqued leather coin purses, passport covers, wallets, canvas totes and the nautical-inspired Cromwell collection of classic leather hobo and slouch-style handbags.

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FASHION: PORSCHE DESIGN

Ahead of its

time In a major milestone for the German company, Porsche Design presented its exclusive new timepieces at Baselworld 2016, following the establishment of a watchmaking subsidiary in Switzerland

orsche Design is known for creating sporty, elegant and functional designer sportswear and accessories for the global business traveler, including titanium eyewear, watches, smartphones, bags and luggage. But in the watch segment, the company is hailing the beginning of a new era. Just over a year after the German company established a new, in-house watchmaking division, Porsche Design Timepieces AG in Solothurn, Switzerland, Porsche Design took its own booth at the prestigious Baselworld watch fair for the first time. Here, Porsche Design showcased the collections that are expected open a new chapter in its timepiece history. Dr Christian Kurtzke, CEO of the Porsche Design Group, sums up the company’s strategy: “There are many established companies that have positioned themselves successfully in the watch industry with technical complications or a sporty image. However, we see clear opportunities for a strong designer brand in the premium timepiece segment for men. That is precisely where we will position Porsche Design in the future – with the right mix of sporty elegance, function, technological innovation, and last but not least with an attractive price-quality ratio.”

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

The 1919 Collection was developed by the company’s Swiss subsidiary in Solothurn, in close cooperation with the Porsche Design Studio in Zell am See, Austria

He added: “Of course, we are not starting from scratch because we can build on our more than 40 years of timepiece history.” Designed in Austria and made in Switzerland, the new timepieces seek to celebrate iconic German design. The 1919 Datetimer Eternity, dubbed “Bauhaus meets Porsche 356”, is inspired by the puristic lines and the functional aesthetics of the legendary Porsche 356, conveying the elegance of the 1950s. Made from a mix of titanium, the watch has a real alligator leather strap, a grey-green face and a bronzed watch case. The 1919 Eternity Black Edition takes its inspiration from architecture and design, transferring the functionality of modern architecture to the design of high-end timepieces. The characteristic openings at the lugs and the transition to the precious alligator leather strap add lightness to the puristic aesthetics. The minimalistic design of the dial focuses the eye on the essentials of time and date. The new 1919 Datetimer Eternity Black Edition adds four models in titanium and black, typical for Porsche Design and a reference to the company’s iconic heritage.

Meanwhile, the 1919 Chronotimer evokes the company’s passion for motorsports and pure performance. With the introduction of the 1919 Chronotimer, Porsche Design creates an aesthetic link between architectural design, sporty elegance, and performance. The watch is powered by the mechanical Selitta SW 500 movement with a power re-serve of 48 hours and a date window at 4 o’clock. The black-tinted sapphire crystal case back allows for a view of the exclusive, energy-optimized Porsche Design Icon rotor. The diameter of the case is 42mm. The 1919 Chronotimer is available in the four typical Porsche Design variations in pure or black titanium carbide coating, with either a titanium or rubber strap. Just like the Chronotimer Collection, all timepieces of the 1919 Collection were developed by the company’s Swiss subsidiary in Solothurn, in close cooperation with the Porsche Design Studio in Zell am See, Austria. The collection epitomizes the future direction of the Porsche Design Group in this segment. The first models of the new 1919 Collection will be available in Porsche Design stores worldwide as well as in selected watch retailers in May 2016.

COMPANY NEWS: STAEDTLER

Flying colors The adult coloring-in trend has meant boom times for Staedtler, the German pencil and felttip company, as it attends the TFWA Asia Pacific show for the first time

erman pencil and felt-tip pen specialist is coming to the TFWA Asia Pacific show in Singapore for the first time, riding on the wave of an adult coloring-in trend. “Around the world, people are using coloring books and pencils as a break from stressful, everyday life – at home as well as on a journey and while traveling,” explains the firm. “That’s how the pioneer of this trend, Johanna Basford, topped all the bestseller lists with her three coloring books. Sixteen million copies have already been sold. As a result of this creative boom, Staedtler has seen enormous growth in the demand for coloring pencils and felt tip pens used to color in the illustrated coloring books. The company is now producing at full speed.” Staedtler is headquartered in Nuremberg, Germany, and all its production sites are seeing the effects of the adult coloring boom. “We are, of course, really pleased about the success of the adult coloring trend. To meet the increased demand for coloring pencils and felt-tip pens, we have responded by adjusting our production,” says Axel Marx, Managing Director of Staedtler Mars GmbH & Co KG. “Additional night and Saturday shifts have recently been laid on to meet produc-

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Staedtler is headquartered in Nuremberg, Germany, and all its production sites are seeing the effects of the adult coloring boom

tion. In addition, more staff have been recruited to support the production process. With the purchase of an additional machine which produces felt tips, the company has made a further investment.” For coloring-in, fine coloring shades are particularly essential. Fans’ wishes for additional color palettes are also fueling the trend. The company’s products Triplus Fineliner and Triplus Color are especially popular, particularly because of the extensive color palettes of 36 and 26 colors, respectively. With this range, Staedtler already has one of the widest color palettes among the brand manufacturers and is extending it with six more colours in spring 2016. “A wide range of colors is essential, especially for illustrations which require challenging coloring-in,” says Johanna Basford. “Delicate shades of color really make the result come alive. For larger areas, Staedtler Triplus Color fiber pens are ideal. They give a flawless color and are perfectly matched to the colors of the Fineliners so that small, delicate areas can be sketched with the Triplus Fineliner and

colored-in with the broader fiber pens.” As a result of the trend, the longestablished company was able to increase its turnover last year by 14% to reach €322 million (US$363 million). Marx does not put this down to the coloring-in trend alone: “Adult coloring is a key driver for our sales. But consumers have bought more art supplies over the last few years in general – in this age of digitization, that really is remarkable.” Staedtler is one of the oldest industrial companies in Germany and ranks among the world’s leading manufacturers and suppliers of writing, coloring, drawing and creative products. An international company with a high export quota, Staedtler has 2,000 employees worldwide, more than 1,200 of them in Germany alone. The long-established company attaches great importance to the origins of its products and manufactures almost 80% of its products in Germany. This makes Staedtler the largest manufacturer of wood-cased pencils, overhead projector pens, erasers, mechanical pencil leads and modeling clays in Europe.

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CONFECTIONERY NEWS

Haribo takes a fun approach to Singapore show Haribo World Travel Retail will showcase its colorful new range of sharing confectionery at the TFWA Asia Pacific show in May (Stand: C28, Basement 2). In the spotlight will be the new Haribo Pick & Party 748g, a generoussized assortment of mini-bags of some of the German company’s favorite brands – Goldbears, Happy Cola, Starmix, Tropifrutti, and Roulette – in a premium quality hang-sell pouch with a silhouette-cut side. Travel-exclusive resealable pouches of best-sellers Air-Parade, Goldbears, Happy Cola and Starmix in 750g and 250g sizes have been developed to suit retailers looking for shelf display and check-out combinations. The bags’ neat zip closures mean the contents stay fresh and tidy. The innovative Haribo Twist ‘n’ Stick pack for children combines tasty jellies with a creative activity. Available only in travel retail, the pack contains mini-bags of Tangfastics, Starmix and Goldbears and a set of stickers to dress the Goldbear character in holiday outfits. For a premium gift, the giant Goldbear 350g bear-shaped Perspex gift box is filled with 35 mini Goldbear bags and is tied at the waist with a jaunty red and blue ribbon. Commenting on Haribo’s approach to the Asia Pacific travel retail market, Head of Travel Retail Juan Miguel Cabrera said: “The growth markets of Asia and the Middle East are a particular focus for Haribo in 2016-2017 and we are looking forward to meeting our colleagues from this region at the Singapore show. On the stand we will have a great range of bright, colorful confectionery and, in addition, we are sponsoring the TFWA Asia Pacific Chill-Out Party this year for extra visibility and a bit of fun.” Speaking about the company’s recent travel retail performance, Cabrera continued: “Haribo has made steady progress in the last year, expanding distribution in all regions, even in some where we were not present previously, and introduced travel-exclusive packaging for many of our favorite confectionery lines. We are confident that our new travelexclusive skus will ensure future success in the channel.”

The travel retail exclusive Haribo Twist ‘n’ Stick pack for children combines tasty jellies with a creative activity

Valrhona builds on the success of debut Christian Lacroix Christmas Collection

Valrhona new Christmas Collection consists of three different gift boxes

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Following the successful unveiling of its first Christmas Collection designed by famous French designer Christian Lacroix at last year’s TFWA Asia Pacific event, Valrhona is presenting the 2016 version in Singapore in May (Stand F32, Level 0). “This bold initiative met considerable interest among its clients, and tremendous success among our customers, allowing us to more than double Valrhona’s Christmas sales worldwide,” said Valrhona Global Travel Retail Manager Eric Carlier. For 2016, Valrhona will introduce a brand new Christmas Collection consisting of three different gift boxes. Thanks to huge popular demand, the company is adding a third box containing chocolate truffles this year. The new boxes are designed with an impactful, rich and elegant design which is expected to boost Christmas sales again this year.

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 NEWS

Ferrero Rocher releases new Asian designs in Destination collection Hong Kong and Singapore are the latest releases in the new Ferrero Rocher T48 Destination collection which will be showcased by Ferrero Travel Market at the TFWA Asia Pacific fair in May (Stand: N1 Basement 2). The travel-exclusive souvenir packs, which are decorated with designs of the most famous landmarks in each location, contain 48 of the brand’s signature chocolate pralines. The collection features designs for some of the most popular tourist locations in the world, including China, France, Germany, Italy, UK, Dubai and the USA. A World Traveller Edition aims to appeal to tourists all over the world. The response to the launch of the first designs for France and the USA confirmed the findings of a pre-launch survey in which consumers gave the souvenir boxes very high scores for giftability, modernity and appeal.

Hong Kong is one of the latest releases in the new Ferrero Rocher T48 Destination collection

Hawaiian Host unveils Maccha Macs Hawaiian Host will be highlighting its new green tea chocolate covered macadamias: Maccha Macs (.71oz/20g), at the TFWA Asia Pacific Exhibition & Conference (stand B2 / E28). This new addition is made with a combination of the finest chocolate ingredients and refined Matcha green tea powder. As with most of Hawaiian Host’s selections, these Maccha Macs are made with hand selected, tropically grown macadamia nuts. Each Maccha Macs bar contains two mouth-watering pieces of green tea chocolate covered macadamias, which make them the perfect treat for everyone who enjoys green tea, chocolate and macadamia nuts. Matcha green tea contains high sources of antioxidants and has many other health benefits that are good for your physical and mental health, so not only are Maccha Macs tasty, but they’re also good for you. The Maccha Macs are specifically wrapped for indulging in yourself or sharing with friends and family. Hawaiian Host is always searching for innovative ways to bring new creations to its consumers because it wants everyone to experience the unique quality of handpicked, dry roasted macadamia nuts paired with

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

rich and creamy chocolate that guarantees goodness in every bite. The Maccha Macs bar is one of many numerous delectable selections that Hawaiian Host offers that is sure to satisfy any green tea chocolate macadamia craving. It truly is a taste of paradise and should be shared with loved ones back home.

Hawaiian Host’s business has been growing steadily in Asia over the past year

EXTRAORDINARY C H O C O L AT E S O U V E N I R

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CONFECTIONERY: PERFETTI VAN MELLE

Keeping

Asia

sweet

Children can decorate their lollipops and wafers with edible ink with Chupa Chups Fun Pen

The Mentos Mini UFO Dispenser is described as a playful gift that can be decorated with nine stickers of little aliens

Perfetti Van Melle is launching its 2016 product portfolio at the TFWA Asia Pacific show on the back of double-digit growth in Asia Pacific

elebrating strong growth in the Asia Pacific region for 2015, Perfetti Van Melle is set to showcase its latest innovations the TFWA Asia Pacific in Singapore in buoyant mood. The Dutch sugar confectionery company generated double-digit growth in the Asia Pacific region last year, driven by core retail brands Mentos and Chupa Chups. Sales growth for the region was led by China and Australia, says Estee Teo, Perfetti Van Melle’s Area Manager for Asia Pacific, though results from Malaysian airports weighed on sales. “These two countries have helped to salvage sales losses in Malaysia’s airports, which were hit strongly in 2015 and unable to deliver the results seen during the pre-crisis days,” she notes. “In 2015 we focused on getting the right fixtures and, in some cases, new fixtures in the top stores. We also worked on analyzing current assortment and partnering with key customers to maximize the return on investment of their shelf space.” Distribution has grown for Perfetti in Asia Pacific with the opening or renovation of several new stores, such as Seoul, Okinawa, Haikou, Taipei, and Da Nang. “We are expecting more stores to open in 2016, furthering our distribution push

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

into new and existing airports, and can confidently say that new stores will contribute significantly to growth expansion in the region,” says Teo. Susan De Vree, Perfetti Van Melle’s Global Travel Retail Manager, explains that with a newly dedicated ASPAC team based in Asia, the company was able to invest time in training sales and operations staff in major airports, ensuring these key retail outlets had staff with excellent product knowledge, assortment and category management skills. “2016 looks to be a year of opportunities despite a slow start to the first quarter,” says De Vree. “However, with the roll-out of new products for this year, which have just started to ship, we are enthusiastic at what 2016 has to bring.” New lines shown at the TFWA Asia Pacific show in Singapore this year will include the Mentos Book, where young adults can store their secrets without anyone knowing. The modern travel design was developed as a premium gift item. The Mentos Mini UFO Dispenser is

described as a playful gift that can be decorated with nine stickers of little aliens. The UFO functions as a dispenser and can be easily refilled. This gift comes with eight mini Mentos rolls in cola, orange, lemon and strawberry flavors. Chupa Chups Sweet Magnets are travel-related fridge magnets with different sweet messages, such as Love you, Miss you, Want you and Thank you, designed as a gift item for teenagers and young adults. Each sweet message comes with eight different mini fruity lollipops. The Chupa Chups Mini Sour pouch bag is meant for snacking and sharing. The pouch bag comes with 40 mixed sour fruit mini lollipops. Mentos Now Mints are travel retail exclusive items available in three different tastes: Sweet Mint, Strawberry and Euca Menthol. Each tin contains 120 mints. With the Chupa Chups Fun Pen, children can decorate their lollipops and wafers with edible ink. This gift item comes with four strawberry lollipops, two fun pens two edible wafers.

COMPANY REPORT: EDRINGTON

Continued

growth The fifth in Macallan’s series, The Masters of Photography: Mario Testino Edition was released last year. The sixth edition will be announced soon

Despite a weakened economy and a trend toward lower price points, Edrington’s whiskies are still achieving significant growth in Asia, says GTR Managing Director Tellis Baroutsis by

WENDY MORLEY

t’s no secret that many companies have seen a slowdown in Asia over the past year or so, especially those in the premium and luxury goods market. But that is not the case for Edrington, despite its position in the upper echelon of whiskies. “We haven’t experienced a drop in sales,” says Aristotelis “Tellis” Baroutsis, Managing Director of Global Travel Retail, Edrington. Quite the contrary – growth has been strong for the company in the region. “We’ve had 25% revenue growth with Macallan in Asia,” he says. “We’re achieving even faster growth for Highland Park (off a lower base), driven by Taiwan. That is for us a very good performance.” At a time when many companies are seeing a decline in sales in the region, that is a restrained statement.

Slight downturn but still strong Baroutsis says the company has seen a slight downturn in the most expensive of its products. “We still sell everything we have, but it’s a bit of a slowing trend.” But despite this slowdown, Edrington easily sold out of its highest-end offerings including Macallan Golden Age of Travel, which was released at US$40,000. “We released 48 bottles globally, and most of

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

also release another Macallan Golden Age them are already sold.” says Baroutsis. “It’s of Travel. “Number two is coming up,” he a very unique product,” he adds. “A 1937 says. “There will be a series.” liquid bottled 34 years later and offered in the most incredible packaging.” While the Golden Age of Travel might Trends toward lower price be the most expensive selection in the points not bad for Edrington Edrington portfolio, the company offers Macallan is strong in the higher-end, other luxury selections, such as King but Baroutsis does notice a trend toward Christian I in the Highland Park travel products in lower price points in recent retail–exclusive warrior series. “This was months. “When I travel around the region sold at US$5,700 if I remember correctly, I see products in the range of US$40-60 released by Highland Park, and Asia was that were not there before,” he says. “In a the biggest region for sales. Normally that way it’s not bad for us because this price would have been Europe.” These sales are range gives consumers access to single mainly Taiwan driven. “Taiwan is our malts. Then hopefully they will trade up biggest market in Asia,” says Baroutsis. to Macallan, which starts at US$75. So “The biggest scotch market and our biggest market.” Macallan’s Masters of Photography series has been another hugely successful luxury offer; the 5th edition was sold at an RSP of US$3,500. As these successes continue despite a slowdown, it’s no surprise that there is a lot more to come in the luxury end, according to Baroutsis. A new Masters The Golden Age of of Photography edition is set to Travel, presented be launched soon – available in here by Ryan Hill, Edrington’s Managing the domestic and travel retail Director of Asia Travel markets – and Edrington will Retail, has almost sold out despite its US$40,000 price tag

“Tellis” Baroutsis, Managing Director of Global Travel Retail for Edrington, displaying some of the company’s successes at IAADFS in Orlando

this is not necessarily a bad thing but I do see it as a trend.” Launched in Cannes last year, Macallan Rare Cask Black, with an RSP of US$450, has been an important aspect of Edrington’s recent successes. Sales of this exclusive, smoky liquid have come in addition to the company’s regular sales, and that has been great news for the company’s bottom line. “This has been quite a hectic year with the launch of Rare Cask Black, which has been hugely successful,” says Baroutsis. “When I hear that people are struggling in Asia, I note that pretty much all Rare Cask Black sales were posted on top of our regular sales. This boosts our numbers. When we launch something in a price range that we didn’t have before and the sales of that product are mostly additional, that automatically creates nice growth.”

Growth in China

Other regional focuses

All of these examples have been factors in the company’s recent growth. But according to Baroutsis, one important reason the China downturn hasn’t affected the company is that the base was small to begin with. “We were not that big in China,” he says. “When the country slowed down significantly for everyone, we had really just begun there. We didn’t experience a slowdown because we didn’t have much volume to lose. What we did, however, was revise our expectations for the country. Where we had once expected rapid growth we had to be more moderate in our expectations.” Indeed, the slowdown in China would be considered healthy growth in the rest of the world. The country has an expected growth rate of 6.6% this year, and the market is practically limitless in size. In addition, of not for the travel retail industry in particular, travel numbers continue to climb and the country is investing an incredible amount in the coming years for building new airports and improving infrastructure. China is spending over US$11 billion on airport upgrades this year alone. The biggest change Baroutsis sees in this market is the Millennial shift from gifting to consumption. “This overall trend has the biggest impact. That’s a healthier situation. They will absolutely keep giving gifts but the Millennial consumer will be very different from past. They want less bling and more authenticity.”

The Chinese traveler is important throughout Asia and will continue to have an impact, especially in Hong Kong, Taiwan, South Korea and Singapore. But Southeast Asia has other priority airports for the company as well, including Kuala Lumpur, Jakarta and Bangkok. Baroutsis sees Vietnam as being the mover in the region, however. “If I were to call out one of these Southeast Asia markets it would be Vietnam,” he says. “We see a lot of growth in Vietnam both in domestic and airports, which is quite exciting.” He also sees India as becoming a force to be reckoned with. “Single malts are growing more quickly than blends in this country. With some single malts coming in a price range of US$40 or $50 it’s easier for people to trade up from blends. So India is an increasingly important market for us.” With the big launch of Rare Cask Black last year, the company will focus on limited editions more than new products in the coming year, including a new Whisky Maker’s Edition: “Photography as a platform has been very successful and is very closely linked to Macallan,” says Baroutsis. “Until now we’ve only been utilizing that in products with a luxury price point, and would like to make it more accessible. So we will bring that to the Whisky Maker’s Edition, with a US$145 price point, and use on the label and the box.” He adds: “And then there will be more happening. Bigger things will happen in 2017.”

Macallan Rare Cask Black has been a huge success thanks in part to activations in Asia and around the world

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COMPANY REPORT: MARIE BRIZARD

Big

splash by

WENDY MORLEY

Marie Brizard as a brand and as a company is no longer satisfied with its supporting role. This year it is stepping fully into the limelight

Gautier’s new campaign focuses on its position as “World’s Best Cognac” and highlights the humid location of its cellars above the Osme River. Both the quality and location are hinted at in the beautiful color palette seen throughout the brand’s packaging and marketing

arie Brizard is very well known to bartenders around the world – no bar is complete without its top sellers. But big changes are afoot for the brand, and even more for the company that owns it, Marie Brizard Wines & Spirits (MBWS). While it is an extremely established and respected brand, until now it has not often been top of mind for consumers. Splashier brands and marketing campaigns have done their jobs, and while Marie Brizard has continued steadfastly for over 250 years, it has sometimes been passed by. Those days are now over. No longer will the company or brand be the silent partner on the shelf or the support crew in the cocktail. MBWS has jumped into the ocean with a mighty big splash, and the waves created will be hitting the shores across the world, in domestic and travel retail.

Gautier’s display unit will be sure to attract attention in travel retail locations worldwide

Bold, surprising, boundless Possibly centuries before its time, Marie Brizard Spirits (MBWS) was indeed created by a woman named Marie Brizard, in 1755, after she received a recipe for aniseed liqueur – still one of the comGautier XO’s new look – the brand will also have considerable educational and visual support in travel retail, highlighting its exceptional quality

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

pany’s most recognizable items. It’s appropriate that her namesake company’s rebranding is happening in 2016, a year when women are moving to the fore in so many areas; Brizard was the first female liquorist in France. Bold, pioneering, creative and boundless: these are words that describe the woman and also the words that describe the direction her namesake company is now moving in. Marie Brizard is bounding onto the world stage with bold new packaging, a very high quality of liquids and a creative new marketing campaign. Travel retail is an important channel in this new plan, and last year the company hired spirits industry veteran Kevin Baker to lead, as Global Travel Retail Director. “Marie Brizard Wine & Spirits is embarking on an exciting new strategy for travel retail with a strong portfolio of both established and innovative new brands including Cognac Gautier (voted the World’s Best Cognac), Sobieski Estate Vodka, Marie Brizard Liqueurs, and the recently launched SHOTKA,

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.

www.macduffint.co.uk

COMPANY REPORT: MARIE BRIZARD

New Marie Brizard bottles and labels leave no question as to the brand. Here you see before and after relaunch

amongst others,” says Baker, expressing delight that he is an integral part of this transformation.

History meets future The Marie Brizard redesign, relaunch and campaign collectively takes its cues from the brand’s historic bottle shapes and impressions. The diamond shape has significance for the brand, and the diamond shape, both simplified and faceted, will be carried throughout the brand’s appearance, bottle shape and marketing. A hugely important aspect of the relaunch is to bring consistency to the brand. Previously, there were inconsistencies; bottle shapes within the sub-brands were quite dissimilar and the branding itself was often unclear. The new bottle shape, with brand clearly emblazoned across the front, will unite all Marie Brizard liquors. The company has been putting massive effort and resources behind this relaunch, and the efforts are definitely paying off. The brand has gone from an established but back-of-shelf, back-of mind cocktail ingredient to a stand-out feature. To emphasize this, MBWS has created a series of cocktails featuring its liquids and then an advertising campaign featuring those cocktails.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Gautier also gets rebrand The redesign and rebranding is not limited to the Marie Brizard brand. Gautier Cognac is also undergoing a transformation, and MBWS is making sure the world knows about it. The World Cognac Awards chose Gautier XO Gold and Blue as the World’s Best Cognac last year. That fact has informed the rebranding. As a Cognac of extraordinary quality, its price is also being increased, to reflect this and to improve profitability. The company is developing high-profile promotions in travel retail, focusing on Gautier’s brand experience. These promotions will showcase the Cognac house’s knowhow in barrel selection, its rare aging conditions in especially humid cellars above the Osme River, and its craft heritage, being created by a small team of 15 passionate craftsmen. Branded gondolas and striking, moody displays will draw the attention of the shopper, and tastings will create a memorable experience and generate sales.

from China’s new market dynamic,” says Baker. “For example, Gautier is positioned as an accessible craft cognac for both enthusiasts and brown-spirit explorers to discover, and this fits perfectly; it is a product of the highest possible quality that is price-positioned slightly below the big cognac brands. “Marie Brizard will be presented in fantastic new packaging as part of the relaunch, as will Gautier Cognac. The new Gautier packs are available from July and Marie Brizard will be shipped in September,” he adds. Sobieski Vodka, an exceptional single rye vodka positioned with Belvedere, Grey Goose and Ciroc, is also an important brand for the region. It is currently undergoing brand review and implementation will take place later in the year. Baker is looking forward to meeting customers in Singapore and then planning and implementing activations in the region. “MBWS is in the process of reorganizing and increasing our resources in Asia,” he says. “We have well known and established brands, and this development illustrates our belief in their potential in the region. We are creating a structure that provides our partners with the tools and resources they need.”

Travelers in Asia will get special attention In Asia travel retail, the focus will be on Marie Brizard and Gautier. “The MBWS portfolio is ideally positioned for the growth segments that are benefitting

Marie Brizard’s relaunch includes an international marketing campaign featuring its liquids in starring roles while also highlighting the brand’s new look, new logo and its diamond shapes.

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COMPANY REPORT: BACARDI

Trading

According to CIR research, of the 18 million legal age drinkers who travel internationally from China, 17 million are spirits drinkers. John Dewar and Sons brand ambassadors encourage these drinkers to trade up to whisky

In Asia, the Bacardi team is focused on an ambitious campaign to help legal age drinkers choose age-statement whiskies

n 2016, the Bacardi Asia Pacific Travel Retail team is using research from Counter Intelligence Retail (CIR) to underline its strategic focus on whiskies, inspiring travelers to trade up from the vodka and gin categories. This research shows that, of the 18 million Chinese people flying internationally each year of legal drinking age, 17 million are spirits drinkers. Bacardi will target this group at top airports in the region with a major focus on sampling and education at point of sale using the John Dewar & Sons Fine Whisky Emporium and its team of brand ambassadors. The duty free approach will dovetail an ambitious campaign in the Chinese domestic market targeting cocktail bars and fine dining.

Vinay Golikeri, Regional Director Asia-Pacific, Bacardi Global Travel Retail, comments: “We have looked in detail at Chinese drinking habits and believe we have a strong opportunity to reach a major proportion of those born during and since the economic reform. The older ‘Open Door’ generation is actively engaging with the discovery opportunity and the brand intrinsics of the six brands in our aged whisky portfolio. There is also a massive opportunity to tap into the premium white spirit home cocktail culture that’s so popular with people born post 1990. This group already represents over 40% of the Chinese legal drinking age population with double digit growth as more of them come of age.

The older generation is actively engaging with the discovery opportunity and the brand intrinsics of the six brands in Bacardi’s aged whisky portfolio

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

“Joint business planning with our key retail partners in Asia Pacific is crucial to delivering this opportunity and we are committed for the long term. There is a US$40 million incremental opportunity to unlock in GTR whisky. We are convinced the key to this prize will be found by leveraging the appeal of discovery brands such as ours with shoppers at the second stage of luxury. We have been especially pleased with the launch of ROYAL BRACKLA highland single malt whisky 12 YO, 16 YO and 21 YO and with DEWAR’S 15 YO and DEWAR’S Ne Plus Ultra 30 YO.” In April Bacardi launched its first total malts category merchandising solution in the region with Dufry. The first-ever activation based on their in-depth insight of whisky drinkers will roll out further in the next few months. The region also now boasts the largest ever John Dewar & Sons Fine Whisky Emporium merchandising unit, a three-meter wide installation in a key Chinese border store. These are two examples of connecting with the whisky consumer for greater category growth with in-store execution to excite the APAC traveller with the range of DEWAR’S Premium blended scotch and rare single malts.

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COMPANY REPORT: RÉMY COINTREAU

Open market Rémy Cointreau GTR Managing Director Peter Sant sees opportunities abounding in Asia, and the company is increasing its footprint with multiple brands

hen one considers the company Rémy Cointreau, cognac is top of mind and with good reason; Rémy Martin is an iconic cognac, and the company’s main brand. While the company’s portfolio focuses on high quality products such as the Bruichladdich range of whiskies, the Botanist gin, Mount Gay rum and, of course, the namesake liqueur Cointreau, in Asia – and Greater China in particular – Rémy Martin Cognacs make up the bulk of the company’s business. “Throughout Asia travel retail, the Cellar Masters Selection and the iconic Louis XIII cognac are our main items,” says Peter Sant, Managing Director at Rémy Cointreau Global Travel Retail.

Filling in gaps The region has seen a softening of the higher end in across the board, but Sant says Rémy Cointreau is in a strong position in that regard. “At Remy Martin we have a range that starts at introductory prices for Cellar Master 16 and goes all the way to US$3,200 for Louis XIII, so we have a price point for all consumer tastes.” The company has seen a shift to below XO. To bridge the gap between VSOP and XO the company has introduced a new expression: Rémy Martin Club. “We’re still activating the higher end XO and Cellar Master 28, but we’re focusing on Millennials with our new cognac, Rémy Martin Club,” he says. “The marketing campaign features a very famous actor, Huang Xiaoming. His wife is equally as well known in the younger crowd. Club has just been introduced in travel retail and it’s taking off extremely well. It bridges the gap between VSOP and XO, and is an excellent cognac, of course, and a great value. The price point is US$121.” Rémy Martin’s new marketing campaign: One Life / Live Them was

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

launched a few months ago as a global campaign with a focus Asia and the USA.

Single malts: traditional and contemporary Whisky is also strong in Asia, and for Rémy Cointreau that market is growing. “The Bruichladdich range is quite new and is picking up speed,” says Sant. “The whisky is still quite small compared to our competitors but we have a lot of faith and ambition. The brand is doing extremely well where it’s listed.” Bruichladdich is a progressive, contemporary company that, while nestled securely in Scottish whisky tradition, is not a traditional looking whisky. How does this break from tradition work in Asia? Sant replies: “There are so many whiskies on the market and you have to do something to stand out. Bruichladdich definitely stands out and you’re absolutely right. It’s polarizing. You’re either attracted to it straight away or you walk away from it, but it doesn’t go unnnoticed and that’s the most important thing.” Sant says this difference in appearance is positive in another way: “It creates stories. A guy comes into a dark bar and the bottle stands out. That creates conversation with the barman, who talks about Islay. The barman points out that it’s not peated but then we have the Port Charlotte, and the mother of all peated, the Octomore. So we’re giving the consumer a choice, all the way from non-peated to Octomore, the most peated whisky in the world.”

The Botanist gin is the company’s fastestgrowing brand, and flies off the shelf wherever it’s listed, thanks in part to the cocktail trend

Activations such as this one for the Botanist Gin have helped the brand grow throughout the globe

Education is key Rémy Cointreau spends a lot of time and money educating people, says Sant. “For a brand like Bruichladdich, education is necessary, starting with scripters, bar people, hostesses and duty free shop floor workers. If you put the product on a shelf it raises questions. This demands someone with knowledge to answer, but it’s an easy story to explain. Everything is very natural and Scottish driven, Islay driven. It fits in with what people are looking for today: roots, an authentic story, but with a twist. You won’t go to Bruichladdich and see tartan and bagpipes. They do things in their own way and they do it very well. We’ve been very pleasantly surprised with how positive the reaction as been.” The brand is doing well in Taiwan, in duty free and domestic both. “The biggest whisky market in Asia is Taiwan. If you want to be a whisky in Asia you need to be in that country. Other markets emerging and important for whisky would be Thailand, Vietnam and Korea. In the Korean domestic market whisky outsells cognac something like 15 times, but in travel retail the ratio is more like four to one, because of gifting and because there are a lot of people traveling for the first time and they want to try something new.” Rémy Cointreau also has its eye on India. “We believe this market is really untapped at the moment,” says Sant. “It’s still heavily dominated by blended whisky, but there’s a definite trend toward single malts. The more people travel the more open they are to change. The Bruichladdich duty free range is doing very well there.”

While China is still dominated by cognac, Sant says whisky is progressing in that country. “The whisky guys have done a great job and laid down ground rules. But the biggest message to take from China is that the market potential is enormous for any western spirit and today the western spirits are less than one percent of total consumption, so there’s enough for everyone out there if we can get it right.“

Growing cocktail trend The Botanist gin is also picking up in Asia, though from an admittedly small base. “Gin is still an emerging category in Asia. But the Botanist is our hottest brand – really amazing gin. Everywhere it’s listed, it’s flying off the shelves. The two biggest categories in the region are cognac and whisky, but we’re starting to see the region picking up the trend toward gin, especially the Millennials from legal drinking age to about 35. This age group is looking for authentic crafted spirits. That’s a hackneyed phrase, but with The Botanist it’s true.” Sant says the cocktail trend is leading this surge. “Trends that start in US or Europe make their way to Asia so that wave will come across. Cocktails are very big in modern on trade, and gin plays an important role.” Rémy Cointreau is doing a lot of activations in the region with the Botanist throughout China, Southeast Asia, Singapore, Australia and New Zealand, and Sant says this is helping the brand pick up velocity. While liqueurs are not a strong category in Asia, the company is promoting Cointreau in the region as elsewhere,

though mostly in Australia and New Zealand. “One of Cointreau’s strengths but also a weakness is that it’s seen as an ingredient. So half the time people are drinking it, they don’t realize what it is. Again it’s a question of education. Today we are promoting the Cointreau fizz, giving the consumer a great-tasting, simple cocktail by adding lime juice, soda water and ice. It’s a fantastic drink and represents a huge opportunity.”

Managing Director Peter Sant is excited about the Asian market, seeing growth potential in many countries and with all the company’s brands

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COMPANY REPORT: BROWN-FORMAN

Rising Above

Jack Daniel’s displays such as this one highlight the authenticity of the brand and gives a nod to the historic Brown-Forman cooperage tradition

the Storm In a difficult business environment, authentic and iconic brands that are recognized worldwide and in line with current trends help smooth the waters by

WENDY MORLEY

lobally, travel retail has seen a challenging business environment in 2015-2016, and Asia is no exception. “The slowdown of the Chinese economy coupled with fluctuations in other regional currencies and the ongoing strength of the American dollar have created a challenging business environment. Unfortunately, I don’t see these conditions abating any time soon.” says Marshall Farrar, Managing Director, Brown-Forman Global Travel Retail. “However there is a bright spot for Brown-Forman Travel Retail; American Whiskey remains very popular in Asia and with category leaders like Jack Daniel’s and Woodford Reserve the impact on our bottom line isn’t quite as pronounced as others.” Many companies have begun to produce more options in the lower ends of their portfolios as they have seen consumers making more value-driven purchases. This is not the case for BrownForman. “At this point we are not creating or promoting new items with a different price point. We continue to operate under the business philosophy of our second master distiller at the Lynchburg Distillery, Lem Motlow, who stated that when it came to Jack Daniel’s, ‘All goods worth price charged.’ Our American Whiskey products – Jack Daniel’s and Woodford Reserve – are authentic and of a premium nature and remain popular among Chinese consumers.”

Trends favor Brown-Forman Certain trends in the region, as in the rest of the world, are especially beneficial for

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

the company. Among these trends are the explosion in popularity of American Whiskey and the demand for authenticity, craftsmanship and premiumization, according to Farrar. “You simply cannot get more authentic than Jack Daniel’s and Woodford Reserve,” he says. The company has released a number of products that meet the demand for premiumization, including Jack Daniel’s Sinatra Select, Jack Daniel’s No. 27 Gold and Jack Daniel’s Sinatra Century. “We also have Gentleman Jack, and we also recently launched Jack Daniel’s 100 Proof which is a Travel Retail exclusive. With bourbons we have Woodford Reserve, Woodford Reserve Double Oaked, the Woodford Reserve Masters Collection.” The primary demographic trend, according to Farrar, is that younger legal drinking age consumers are continuing to move away from Scotch and toward American Whiskey. “These younger consumers are redefining the definition of luxury, and we need to ensure that we are continuing to offer them authentic products as well as the memorable experiences. This is especially important as we look at how we engage with them in the airport environment.”

The icon celebrates 150 years A number of launches and celebrations in travel retail help secure Brown-Forman’s position in the region and elsewhere. “Last fall we launched Jack Daniel’s Sinatra Century with very successful high profile activations in over 26 key international airports. Our activations for Jack

Daniel’s 150 Anniversary Celebration will take place over the next six months in key airports around the world,” says Farrar. “Jack Daniel’s Tennessee Whiskey is a global icon found in more than 165 countries around the world and revered for its authenticity and premium nature,” he continues. “You can walk into practically any travel retail store, restaurant or bar in the world and ask for ‘Jack’ and everyone will know that you are talking about a very special whiskey made in a small town in Tennessee with one stoplight.” To stay on-trend, BrownForman ensures an ample selection of premium brands are available, such as Jack Daniels Sinatra Century and Woodford Reserve Distiller’s Select

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LIQUOR NEWS

MacDuff International grows in Asia and beyond For the fifth year, MacDuff International will be exhibiting at the TFWA Asia Pacific Exhibition & Conference, this time with a newly designed stand at double the size. The company has achieved important new travel listings across Asia and the Middle East since the last TFWA show in Singapore. Lauder’s in particular has continued to grow across Southeast Asia, especially in travel retail, and will soon launch in the Vietnam domestic market. Visitors to Singapore will also find Islay Mist in the local Singapore domestic market for the first time, following its recent launch through distributor Maybev. The focus at the show will be Lauder’s Finest, which has maintained its position in the top 10 blended Scotch whisky category within Global Duty Free & Travel Retail (according to the “Best & Most” guide), but customers will also get a sneak peek at the upcoming limited edition of Islay Mist, a premium 8-YO cask finish using amontillado napoleon solera casks from Bodegas Hidalgo in Jerez. The company is announcing some very exciting news in addition to these reports of growth. Export Sales Director John Scott has announced: “MacDuff has taken on worldwide distribution rights for Scotland’s newest, most innovative single malt distillery, Inchdairnie, in Fife.” The official opening of Inchdairnie takes place in May 2016 and details will soon be released on www.inchdairniedistillery.com

Islay Mist has been making waves in the Singapore market, both in travel retail and now also domestic

Napa Valley’s Robert Mondavi Winery 50th Anniversary Year When Robert Mondavi opened the doors to his eponymous winery in July, 1966, he was inspired by his belief that he could make world-class wines in the Napa Valley. This thinking would influence an entire industry. This year, Robert Mondavi Winery celebrates its 50th anniversary – a fact being celebrated around the world. Genevieve Janssens and the winemaking team have crafted a celebratory 50th anniversary red wine blend, “Maestro,” worthy of the man himself. The blend of Napa Valley Merlot, Cabernet Sauvignon, Cabernet Franc, Petit Verdot and Malbec creates “a delicious and harmonious whole,” to celebrate the man’s spirit of innovation and nodding toward his one-time stint conducting the Napa Valley Symphony. This limited-release bottling is just released, in April, 2016. In addition to the new Maestro, a commemorative 50th Anniversary label will also adorn new releases of some of the most enduring bottlings from Robert Mondavi Winery: the 2015 Fume Blanc, Napa Valley; 2014 Cabernet Sauvignon, Napa Valley; and the winery’s hallmark 2013 Cabernet Sauvignon Reserve, To Kalon Vineyard. Constellation Brands will be featuring Maestro at Booth No. E37, TFWA Singapore. To celebrate the 50th anniversary of the Robert Mondavi winery and pay tribute to the man himself, the winery is releasing a special blend called “Maestro”

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

LIQUOR NEWS

Beam Suntory grows whisky and Cognac in Asia According to Fernando de Vicente Meirás, Sr. Global Marketing Manager Global Travel Retail, Beam Suntory, a key focus this year for the company in Asia Pacific travel retail will be Japanese category development, as well as the refinement and extension of key category platforms into Asia such as Whiskies of the World, Bourbon Legends and Peated Malts of Distinction. “This year, continued investment in our portfolio of world-renowned whisky brands and the resource required for growth in Asia Pacific Travel Retail will deliver the next wave of whisky growth for our customers,” he says. Courvoisier will also be a focus for the company in the region, says de Vicente Meirás. “Courvoisier’s ‘Toast of Paris since 1889’ message for the release of our new Artisan Edition portfolio is a priority as we look to attract premium brown spirit drinkers across the category. As with our single malt Scotch whisky brands, we pride ourselves on the importance we place on the wood that makes our Cognac so special. The dedication and respect for these time-honored traditions and processes demonstrates Courvoisier’s commitment to making cognac accessible to all brown spirits drinkers.”

Beam Suntory’s focus in Asia Pacific travel retail this year will be the refinement and extensionof key category platforms into Asia such as Whiskies of the World, Bourbon Legends and Peated Malts of Distinction

Deau returns to Singapore with its range of luxury Cognacs Deau Cognac is upping its game, creating more higher-end selections and presentations such as this new-look Cognac Extra Black

Deau Cognac is exhibiting for the second year at TFWA Asia Pacific Exhibition and Conference, to continue its expansion into the Asia Pacific travel retail market. This year, the company will showcase its Cognac Extra Black, which has been given a more premium look and a gift pack. “The demand for premium products in the region continues to be strong, so we thought returning to Singapore with a more high-end looking product was important. The new look, cover and gift pack is sure to catch the eye of passers-by, and will look amazing displayed in any retail environment,” says Olivier Hidier, Commercial Director. Deau will also be showing its Privilège cuvée, a unique blend of slowly matured Cognacs. Aiming to enhance its perceived quality, the cuvée is now a superior VSOP blend, ideal for the region. The front label has been replaced with an engraving, highlighting its quality. Also perfect for travel retail are Deau’s two Tasting Boxes, enabling consumers to try either three or all six of the Cognac house’s main expressions. Comments Hidier, “We may be a small brand in comparison to the main Cognac players, but we have a unique offering that is quite exceptional, and one we feel is ideal for this channel. We have seen success in the domestic markets, and we are now looking to replicate this in travel retail; it is a great showcase for further building awareness of our brand, and an excellent platform to go to the next level of growth.”

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

QUESTIONNAIRE

ALL ABOUT Sunil Tuli,

Managing Director (Duty Free and Travel Retail) at King Power Group Where were you born and raised? Born in a little town in India called Jabalpur (population just over a million), and raised in India in different cities, settling eventually in New Delhi, where my parents retired and lived. If you attended post-secondary school, what did you study? Went to Delhi University and graduated in Commerce, and then specialized in Marketing Management and Advertising. Are you married? Do you have children? Very much married to Shikha for 33 years, and have two fabulous children. Our son Karan, who is turning 32 in July, is married to Jesreen. Karan is Global Head of Agatha (Paris) for Travel Retail. Our daughter Karuna, who just turned 29, is studying journalism in London. What is your favorite movie? I’m not sure if I can pick a favorite. There are so many, but one I can watch again and have watched many times is Forrest Gump. What is the last book you read? Ghost Wars, by Steve Coll.

What would you choose as your last meal? Haven’t really decided yet, but would obviously be from the best cuisine in the world: Indian! Your favourite drink? Water obviously. What’s yours?

ASIA DUTY FREE & TRAVEL RETAILING MAY 2016

Do you have a passion in your life (or more than one)? What? I am a simple man, with simple habits. There’s no real passion, but I do have an interest in history, and I read a lot. Of course one passion I have is this is this industry and my work. I’ve gained so much from it. Do you have a pet (or more than one)? If so, what animal and name? We have a boxer called Cassius. Beautiful dog. Then there is a tortoise, and also fish, hamsters, and I don’t know what else my wife and kids keep collecting. Do you prefer country or city? I think I’m more of a city person

What is your favourite place to vacation? I’m always happy to go back to India. We’ve been living in Singapore for 26 years now, and going to India is something that I always look forward to. There are so many places one travels to on vacation, and I like all of them. What’s the first thing you do in a new place? Unpack, check emails, plug the phone, have a shower, and take a walk. If you could choose any place in the world to live, where would it be? Obviously Singapore and India are on top of the list. I love New Zealand as well, and am also a permanent resident of the country. I could easily live in the UK too.

Which living person do you most admire? That’s a difficult one to answer. A politician? None really. Sports personality? Not sure with all the stuff going on... Philanthropist? Who could it be? No, I don’t think I can answer that. Which historical figure do you most admire? Again, there are so many great people, historical figures who changed the world for the better, and I can’t name just one. Personally for me, my parents gave me everything I have, and I owe it all to them. Where and when were you happiest in your life? Actually this would be at our son’s wedding two years ago in India. The picture is from that. A week of festivities, with all my family and friends (about 400 of us). It was brilliant. What in the world would you most like to change? At the risk of sounding like someone out of Miss Universe, I would actually like to see World Peace. What about yourself would you most like to change? My golf game. I’ve been working on it for nearly 20 years, and it just seems to get worse. What is something about you that most people would find surprising? That I am a great chef, a champion skydiver, a software expert, a grandmaster at chess, a genius, and most of all, extremely humble.