Asia Duty Free magazine by Paramount Publishing Ltd.

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T F WA W E O C T O B E R 2 0 1 2 • V O L 1 6 , N O 4

TFWA WE 2012

KLIA

ramps up p.

Changi’s

perpetual motion p.

L’Oréal

launches luxury p.

Diageo

drives growth p.

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Letter from the Editor

Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published annually 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, Maldive Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam.

Watch this space

espite a dampening of growth in key indicators such as passenger numbers, significant year-on-year gains in traffic and sales are still being made across Asia, and the industry is as driven as ever to continue doing what it can to push those statistics higher. A case in point: Kuala Lumpur International Airport’s commercial tender for the nearly completed KLIA2 terminal. Described as a “next-generation hub,” KLIA2 is due to open next April, and it’s attracting attention from operators who are understandably eager to get in on the new space. When Malaysia Airports put food & beverage, retail and services concessions at KLIA2 up for grabs, it must have been delighted at the response. In our interview with the company’s Senior General Manager of Commercial Services Faizah Khairuddin, she tells us that there was an overwhelming response to the tender briefing sessions, with over 1,600 interested parties comprising retailers, F&B and services operators attending. Meetings were conducted in phases, with 133 different opportunities present in total. Things are also booming at Indira Ghandi International Airport in Delhi, India. Here, Delhi Duty Free Services (DDFS) is focusing on arrivals, with its new 50-squaremeter store as well as a possible ice-cream concept. DDFS is at work in departures too. The company just opened a 20-square-meter cosmetics store dedicated to the MAC brand, and says its next expansion will come in the form of two mobile sales units. “We’re hoping to get them into the piers,” says DDFS Chief Executive Steve O’Connor, adding that they should be up and running soon. “Running” is a good word for Changi Airport Group (CAG), the operator of Singapore’s world-class air hub. CAG has set a torrid pace since it was formed three years ago, spearheading a massive, multi-project development program at the airport. According to CAG’s Executive Vice President of Commercial, Lim Peck Hoon, Changi’s continued success is all about change. The first project on the books is the planning and construction of a new, larger fourth terminal. Terminal 4 will be designed to maximize efficiency and handle continued passenger traffic growth. Construction of T4 will begin in 2013 and it is expected to be ready by 2017. In the meantime, though, it’s apparent from this issue that there are plenty of new developments happening in Asia to keep retailers and suppliers busy. No doubt at this year’s TFWA WE in Cannes, a show that attracts duty free executives from around the world, we’ll learn even more about how the industry in Asia plans to continue keeping up with travelers that have a taste for luxury and, more importantly, are ready and willing to spend. I look forward to seeing you there. Kind Regards,

The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. October 2012, Vol. 16, No. 4. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2012 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 Hibah Noor hibah@dutyfreemagazine.ca ASIA CORRESPONDENT P. Convery padraic.asiadutyfree@gmail.com CONCESSIONS, LIQUOR, & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca ASSOCIATE EDITOR Melissa Silva melissa@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca LAYOUT & DESIGN Jeff Zuk www.jeffzuk.design.com jeff.zuk@me.com CONTRIBUTORS Andrew Brooks ADVERTISING SALES ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca

Hibah Noor Editor hibah@dutyfreemagazine.ca

CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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TFWA WE OCTOBER 2012 • VOL 16, NO 4

10 18 24 28 30 32 6

IN BRIEF Shilla boosts overseas expansion • Thai airport operator holds off on awarding Don Mueang concessions • Philippine Airlines plans to open the country’s largest airport • Godiva adds the Coeur Iconique to its bestselling Gold Collection • Singapore Airlines launches US$50 million inflight connectivity program

MALAYSIA AIRPORTS

Love me tender Retailers have more than a crush on Malaysia Airports’ latest batch of commercial contracts as the airport operator ramps up its operations in Kuala Lumpur and elsewhere

DELHI DUTY FREE SERVICES

NUANCE-WATSON (HK)

Fighting spirit Nuance may have lost the battle for Hong Kong International Airport’s coveted concessions, but it’s looking to win the retail war on other fronts

TASA MENG

Tasa Meng’s hard work and strategic investments are poised to pay off

Duty free at your doorstep With its passenger-focused approach, Cathay Pacific is increasing the convenience of its inflight sales services, while decreasing its carbon footprint

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Singapore’s Changi Airport has always been a step ahead, constantly changing its commercial proposition. Asia Duty Free reports on its latest moves

DUTY FREE PHILIPPINES

DFP celebrates a strong 25 years

HONG KONG INTERNATIONAL AIRPORT

Hong Kong picks up the pace HKIA matches hefty traffic increases with a broad array of plans and projects

Development driven CATHAY PACIFIC

Perpetual motion

As Duty Free Philippines’ 25th year winds down, sales, renovations and new projects set the stage for the next 25

A growing concern Delhi Duty Free has gone from strength to strength since it set a new benchmark in Indian travel retail at the capital’s airport. And things can only get better

CHANGI AIRPORT GROUP

INFLIGHT SALES GROUP

Leading the way Inflight Sales Group is flying high with several new developments, a flexible business strategy and new onboard products in the works

EXHIBITOR SPOTLIGHT

Showtime This year’s TFWA Cannes Exhibition welcomes a unique range of exhibitors to the tradeshow floor. Here’s what attendees can expect from a few of the industry’s leading brands

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Contents

86 49 51 54 56 62 64 68 70 8

SPECIAL REPORT: WATCHES WATCH REPORT

If the price fits… These timepiece brands take on the vibrant Asian market with carefully calibrated pricing strategies

FRÉDÉRIQUE CONSTANT

Staying power Already boasting a strong inflight and airport presence, Frédérique Constant is on the hunt for new partners and markets

51 76

MISAKI

Cutting edge Misaki targets the Asia market with a sharp, sharkinspired collection

SWAROVSKI

Branding up, branching out Swarovski: new brands and new men’s products drive success in travel retail

L’ORÉAL GROUP

Launching luxury L’Oréal Luxe builds Asian success with an aggressive schedule of new product launches

SHISEIDO

Skin supremacy Shiseido’s on a roll in Asia as it zeroes in on a new premium-friendly consumer demographic

COLORFUL LICENSES

The right turn A major career shift 15 years ago led to Colorful Licenses’ current success

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

LIQUOR REPORT

Leading with luxury Some big name spirits suppliers discuss the importance of developing luxury and limited edition offerings for the Asian traveler

DIAGEO GTME

Driving growth Asia Duty Free speaks with Managing Director of Diageo GTME Roland Abella about the company’s performance in FY2012 and what’s to come over the next 12 months

ORBIS AGED WORLD WHISKEY

An international brand After recognition from Ian Buxton and some noteworthy North American listings, Orbis World Whiskey is ready to tackle its target market of Asia duty free

PERNOD RICARD ASIA DUTY FREE

Next-level prestige Asia Duty Free speaks with Pernod Ricard Asia Marketing Manager John O’Sullivan on Martell and the release of The Ultimate Jewel and the Architect Edition

BRITISH AMERICAN TOBACCO

Exceeding expectations British American Tobacco’s business in Asia is characterized by a concentration on innovation with the end goal of exceeding consumers needs

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In Brief Shilla boosts overseas expansion Shilla Duty Free, South Korea’s second-biggest duty free retailer, has announced that it will launch a second overseas outlet at Singapore’s Changi Airport early in 2013. Shilla, the travel retail arm of giant conglomerate Samsung Group, said it will operate the second overseas store for three years from January at Changi Airport’s Terminal 3. Last month, Shilla Duty Free won a contract to operate its first over-

seas store for three years from December at the Singaporean hub. “Our stores at Changi Airport will pave the way for us to tap into the Southeast Asian duty free market,” a Shilla spokesman said. “We will be more aggressive in expanding the number of our overseas stores.” Shilla Duty Free’s move follows larger rival Lotte Duty Free’s opening of its first overseas store at Soekarno-Hatta International Airport in Jakarta, in February, and the opening of its second overseas outlet at the Changi Airport’s T2 in May.

South Korea’s second-biggest duty free retailer is keen to add to its already formidable presence at home with store openings abroad, and is determined not to let its larger rival Lotte, steal a march on it

Thai airport operator holds off on awarding Don Mueang concessions State-owned airport operator Airports of Thailand (AOT) has still not named the winners of its tenders for duty free and other retail at Bangkok’s Don Mueang Airport, even though the airport is due to reopen in a matter of weeks. AOT plans to reopen Don Mueang on October 1, but says some bidders’ proposals are not workable. After an extraordinary board meeting on September 4, AOT Chairman Sumet Photimanee said there had been no decision on the bids. Sumet said: “We have to compare all the information on hand with the terms of reference to see whether the bidders’ proposals are feasible.” He said AOT will speed up its evaluation

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

of the bids for the airport’s commercial area operations, adding that that process should be complete by mid-September. The Mall Group submitted the highestpriced bid, offering AOT minimum revenue of 16.7 million baht (US$536,770) per month and to install sales-checking machines. Sumet said that King Power had offered AOT the highest duty free bid, promising 63 million baht monthly—20 million baht more than the next highest bidder. But he added that AOT needed to examine the retailer’s proposal further. “If the bidder cannot follow the contract, AOT will be put at risk,” he explained. “We do not consider only high benefits. The company’s risk is our risk. If it cannot follow the proposed plan, what would we do? We insist

that there is no political issue and we will hurry up with our decision before the full opening of the airport, scheduled for October.” AOT expects 3 million international passenger arrivals into Don Mueang Airport. King Power’s proposal is worth up to 756 million baht (US$24.5 million) a year, which means the retailer’s annual sales at the airport would have to be in the region of 5-6 billion baht (US$160$195 million). AOT is asking for more clarification of the numbers from King Power. King Power pays AOT 2 billion baht (US$65 million) a year for its duty free contract at Suvarnabhumi Airport, which handles 36 million international passenger arrivals annually. The duty free area at Don Mueang measures 1,100 square meters and the remaining commercial space covers 2,700 square meters.

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They sell as good as they taste

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In Brief

The World’s Favourite Belgian Chocolates

Indulge with Guylian’s Temptations. Luxuriously creamy chocolate seahorses, marbled with 100% pure, silky smooth milk, dark and white Belgian chocolate ﬁlled with three popular Guylian ﬂavours. Give into Guylian’s Temptations and enjoy …

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ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Godiva adds the Coeur Iconique to its bestselling Gold Collection Just in time for TFWA WE in Cannes, Coeur Iconique Godiva has announced the addition holds six of Godiva’s most iconic chocolates of the Coeur Iconique to its Gold Collection. Billed by Godiva as perfect for gifting or treating oneself, the Coeur Iconique’s box is a blend of Art Nouveau and straight-from-therunway fashion, bringing to life both Belgium’s design and chocolate heritage. The heart-shaped box, which features a delicate cut-out lace design, is created by using innovative laser-cutting techniques. Inside are six of Godiva’s most iconic chocolates, the delicious heart-shaped Coeurs. These charming chocolates are filled with Godiva’s renowned signature creamy smooth praline and coated in white or milk chocolate, or covered in dark chocolate with a delicious ganache filling made with 70% dark chocolate from Papua New Guinea. Visitors to this year’s TFWA WE can learn more about the Coeur Iconique or the rest of Godiva’s range of chocolates at Yellow Village F33.

Singapore Airlines launches US$50 million inflight connectivity program Singapore Airlines is formally launching inflight connectivity as part of a US$50 million program to bring Internet and mobile data services to customers, even when flying at 35,000 ft. Following a recent soft launch on a limited number of aircraft, inflight connectivity is available on 14 aircraft in the fleet, including all five Airbus A340-500s which are deployed on the world’s longest non-stop flights, between Singapore and both Newark and Los Angeles. Services have also been extended to more markets such as Australia, for which regulatory approvals had not previously been obtained. Travelers can surf the Internet, send and receive emails on smartphones and other electronic devices, and send and receive SMS text messages with GSM-compatible mobile phones. (Mobile data and text services are not yet available on A380s). Through a partnership with leading connectivity provider OnAir, the technology will be progressively rolled out across all of SIA’s long-haul Airbus A380-800, A340-500 and Boeing 777-300ER aircraft over the next two years. Services are offered on routes on which equipped aircraft are deployed, subject to regulatory approvals from individual countries. A map highlighting availability when flying over specific countries is published in the airline’s KrisWorld inflight entertainment magazine.

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In Brief

Philippine Airlines plans to open the country’s largest airport

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the facility’s distance from Manila. He said plans to build a new highspeed railway between Metro Manila and Clark—at an estimated cost of US$10 billion—would be too burdensome for the government. Ang revealed that the company would contribute approximately US$500 million in equity for the airport project and finance the rest of the cost by using loans from foreign or local banks. The report states that the company plans to pitch the project to President Aquino in January or February. According to Ang, once building is approved by the government, the new airport should be completed in three years. In closing, the report states that Ang believes the new airport combined with other components of PAL’s expansion could solve labor problems that have disrupted the airline for more than 10 years.

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government will support the company’s plans for the new airport, which he revealed would be closer to Manila than the Clark International Airport in Pampanga, which the government is renovating to replace Naia. Ang, who also serves as President of PAL’s controlling shareholder San Miguel Corp., has not yet disclosed the prospective location for the new airport, but did reveal that 2,000 hectares of land are required for the project. The new airport will be exclusive to PAL and sister firm PAL Express (formerly Air Philippines), and will have two parallel runways when it opens, with the option of having two more. Parallel runways allow for two planes to take off and land simultaneously, which is not feasible with Naia’s perpendicular runways. Ang reportedly said the government’s plan to turn Clark into the country’s premier gateway might be not be ideal given

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Top Story: KLIA Brands such as Kiehl’s, Anna Sui and Bobbi Brown are available in KLIA’s Satellite Building

Love me Retailers have more than a crush on Malaysia Airports’ latest batch of commercial contracts as the airport operator ramps up its operations in Kuala Lumpur and elsewhere BY P. CONVERY

t’s a good indication of rosy prospects when an airport commercial tender attracts plenty of bidders. So when state-owned airport operator Malaysia Airports put retail, food & beverage and services concessions at Kuala Lumpur International Airport’s “KLIA2” terminal up for grabs, it must have been delighted at the response. KLIA2 – which Malaysia Airports describes as its “next-generation hub” – is due to open next April, and retailers are clamoring to get a foothold in the new facility. Malaysia Airports Senior General Manager of Commercial Services Faizah Khairuddin says: “Malaysia Airports received an overwhelming response to the tender briefing sessions, with over 1,600 interested parties comprising retailers, F&B and services operators attending. That response was due 18

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

to Malaysia Airports’ new concept of innovative retailing at KLIA2. “Tender briefings were conducted in phases, with 133 different opportunities made available,” Khairuddin explains. “Phase one was conducted in December 2011, phase two at the end of February and into early March 2012. Phase three went ahead in April and phase four in May. The first, second and third phases involved 27, 39 and 37 tenders, respectively. The fourth phase proved to be most exciting, with 30 tenders comprising individual lots as well as package deals. In all, 161 outlets have been tendered for the first day of operations at KLIA2. “The categories and concepts are diverse to enhance the customers’ journey through the terminal,” she says. “The offerings at the public concourse area complement the overall experience for travelers, well-wish-

ers and visitors at KLIA2. This area will have more F&B-centric offerings, [with] a wide array of F&B concepts and brands, fast-food outlets, lifestyle cafes, casual dining restaurants and grab-&-go counters, offering a good range of local and international fare. The retail offerings will cater for travel-retail basic needs such as pharmacy goods and beauty & wellbeing products, as well as a bit of luxury, with chocolates & confectionery, perfumes & cosmetics and fashion accessories.” Khairuddin says travelers will start their journey through the airport as “retail explorers”, beginning at the public concourse area, and that they will move on to more variety and choice as they make their way through the airport. She says the terminal will boast a walk-through duty free emporium, a fashion street and gallery, island concept eateries that allow F&B to mingle with retail, a dedicated food court, a spa, relaxation and entertainment facilities, and television and movie lounges. Additionally, she explains, there will be a generous range of retail and F&B offerings at each pier of the terminal. “The arrivals hall airside area will feature

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Top Story: KLIA

Faizah Khairuddin, Malaysia Airport’s Senior General Manager of Commercial Services says the response to KLIA’s tender for retail concessions at its upcoming LCC terminal was “overwhelming”

Malaysia Airports has fielded a diverse range of concepts and categories to make KLIA a memorable airport for travelers

a duty-free haven,” she adds, “and the landside area will offer local flavors and an experiential retail gallery.” Khairuddin says Malaysia Airports netted a good mix of proposals from local and international players and that it issued the first batch of awards to successful phase one bidders in early July. The concessions awarded so far have been mainly for the public concourse area of the terminal’s departures level. “Travelers and visitors will be able to shop at Cocoa King, The Body Shop, Carlo Rino and Spirit of Asia, as well as to explore beauty and health at Beauty Express and MyLife Healthcare,” she explains. “The dining concepts vary to cater to the needs of our travelers. There will be a choice of casual dining restaurants – namely PappaRich Express, Bumbu Desa, The Library and even The Loaf. Coffee lovers will be delighted to know that Starbucks Coffee is among the offerings. Additionally, customers will also have a choice to grab a cuppa at Chatime or simply enjoy a cool, revitalizing drink at the outlet. “For those in a rush, we have a selection of grab-&-go concept outlets such as Dunkin’ Donuts and Malaysian Delights. Alternatively, passengers will be able to savor delectable delights in a healthy way at Chinese desert shop Hui Lau Shan. Also in the lineup is Heng Heng Local Delights, which offers 20

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

an array of specialties from the various states in Malaysia, giving travelers and visitors a taste of authentic local delicacies.” Malaysia Airports may have had its hands rather full with developing and tendering KLIA2, but all that work certainly hasn’t come at the expense of other areas of the capital’s international hub. In KLIA’s Contact Pier Domestic, it’s been rolling out new brands including Montblanc, Charles & Keith, Rolex, Michael Kors, Tumi and Swarovski. It’s also opening another Victoria’s Secret boutique. In the airport’s Satellite Building, which handles international passengers, the lineup of new brands includes newsagent/bookstore chain WHSmith, Lonely Planet, Billabong, Bijoux Terner, Pandora, Giordano, Swarovski and a watch boutique named From Time to Time and operated by Eraman Malaysia, Malaysia Airports’ retail arm. Malaysia Airports has also been ramping up retail at the country’s smaller international airports, of which there are four. “At Penang International Airport, among the categories that will be made available are pharmacy products, books & magazines, telecoms and a convenience store for the public concourse in the departure hall,” says Khairuddin. “The arrival hall’s public concourse will boast a range of Asian and local specialty cafes and restaurants, and telecoms services. The airside area will provide

an array of product offerings ranging from duty-free indulgences to souvenirs and collectibles, costume jewelry, fashion accessories, body care and a children’s boutique. Additionally, there will be lounges and health & relaxation centers.” At Kota Kinabalu International Airport, Malaysia Airports has opened Marrybrown and Apron Bites F&B outlets, operated by Eraman Malaysia. Eraman also has presence in domestic departures, managing an emporium offering apparel, perfumes & cosmetics and fashion accessories. “Another upcoming outlet will be Apron Mache,” Khairuddin says. “It’ll be opening soon in the arrival hall’s public concourse. Khazanah, which offers ethic yet very modern and contemporary home furnishings, gifts, fashion and accessories, will also make a debut at Kota Kinabalu International Airport.” Underpinning all this activity is a concerted push by Malaysia Airports to generate annual revenues of M$3 billion (US$959 million) by 2014, two-thirds of that total from non-aeronautical sources. Khairuddin says: “[The potential for] development and growth in non-aeronautical performance is boundless,” adding that it depends only on creativity in optimizing space and other business opportunities. She describes the thinking behind KLIA2, for instance, as creating “an airport within a mall”, designed with a strong commercial focus. “That’s demonstrated through an increase in total terminal commercial space and retail

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Top Story: KLIA

Malaysia Airports opened the country’s first stand-alone Victoria’s Secret store in KLIA’s Contact Pier Domestic

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ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

space,” she says, “as well as retail placement to maximize footfall and visibility.” She explains that the development of KLIA2 is one element of a four-pronged business development strategy, the other elements of which are: boosting KLIA’s retail revenues overall; applying specific development templates to all 39 of the airports run by Malaysia Airports; and developing land around KLIA, including an “aerotropolis”. All the indications are that the airport operator’s strategy is paying dividends. Khairuddin says Malaysia Airports’ commercial revenues for the first half of this year are 9.9% up on the same period in 2011, outpacing growth in passenger traffic across its airports. And she says she’s looking forward to an even better result in the second half of the year. “The second half of the year always performs better than the first half,” she says “In the second half, we have stronger passenger growth due to holidays and festive seasons. It’s very much in line with trends among other retailers globally.” She says Malaysia Airports is benefiting from the growth in passenger traffic from mainland China that other airports and retailers in the Asia-Pacific have also enjoyed. Khairuddin says that at KLIA, the only passenger group that spends more than local Malaysians are the Chinese mainlanders. “The Chinese market accounts for approximately a 20% share of the total retail spend at KLIA,” she explains. “Aside from liquor, Chinese travelers are also very keen on luxury goods,” she says, adding that Malaysia Airports is actively targeting them. “We have an array of high-fashion brands available at KLIA, such as Burberry, Hugo Boss, Hermès, Salvatore Ferragamo, Dunhill, Bvlgari and Montblanc. We are constantly introducing more new brands and concepts to KLIA.” If Malaysia Airports’ track record so far this year is anything c to go by, that’s certainly no exaggeration.

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Delhi Duty Free

A GROWING CONCERN Delhi Duty Free has gone from strength to strength since it set a new benchmark in Indian travel retail at the capital’s airport. And things can only get better BY P. CONVERY

Delhi Duty Free is keen to tap the strong potential of the perfume and cosmetics category

t may have been a steep learning curve for Delhi Duty Free Services (DDFS) at Indira Gandhi International Airport’s Terminal 3, with logistical issues looming largest among the obstacles to overcome. But the retailer has shown great resilience and a deftness of touch since it opened for business just over two years ago, and is now firmly on a growth path. “Our financial year started in April, and for the past three months our sales are well up on last year – 13% higher than 2011,” says Steve O’Connor, Chief Executive, DDFS. “From January [2011] to January [2012] we’re up 33% on the previous year.” “All the categories are doing well,” he says. “Confectionery has shown the biggest jump as a percentage, but it was pretty low originally. Liquor is a high-value, high-volume business for us, so if we’re growing it at 1% or 5%, it’s the smallest percentage-point growth, but the value is bigger. It’s the biggest part of our business, so even if the growth is a few percent, it’s worth a couple of million dollars. And we’re growing it – particularly in arrivals.”

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

One trend within the liquor category that O’Connor is keen to encourage is greater consumption of white spirits. “There’s quite a lot in our pier outlets now,” he says. “But India’s mainly a Delhi Duty Free’s entry into India’s travel-retail market has been a gamebrown spirit market changer for the Indian industry because it’s all to do with the image. So what we’re seeing is people looking for more growing wine sales at Delhi. He says the premium spirits as they look for differenti- unreliability of domestic suppliers – both in ation from your standard buyers, and terms of quality and authenticity – give younger affluent travelers moving into vod- DDFS a natural edge over the downtown competition. kas and premium vodkas as well. “The thing in India is that you don’t “Again, it’s a differentiation, but in this case it’s one between old and new. We don’t know if wine has been handled correctly. One always want to be drinking what our dads of the benefits of buying it in duty free is that drank! When you’re in your early 20s, you’re customers know it’s been handled properly looking to differentiate yourself from the old throughout the process in terms of storage man, so there is a move into liqueurs, and and logistics, whereas downtown, people are reluctant to spend a lot on wine, and a into white spirits particularly.” O’Connor also sees “huge” potential for lot of our customers say to us that they buy

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Delhi Duty Free

their wine in London, Dubai or other places and bring it back. For us, the idea is to capture that market, and to give them variety within the price point that they want. “It’s a cultural thing, and it takes some time to develop the market. We’ve seen it with malt whiskies: if people have the variety, people start collecting and want to try different ones, and it becomes a hobby.” O’Connor says that fielding an adequate range in any category is a vital means of driving sales, and that it’s no different for wine, even if many brands and bottles play a largely supporting role. “We need to have the range there to give people the comfort factor,” he says. “It’s like

little bit from brand promotions and gone forward with more generic promotions for all categories. So at the moment we’re giving away a Mini Cooper. You spend US$50 and you get a free raffle ticket for the car. That works across all the brands, so we don’t see a spike in sales of just one particular line or supplier, but growth across all categories.” He also says another key to DDFS’s success has been its staff training, adding that the company’s headcount – currently 550 – will increase to more than 600 by year’s end. “First, we work with the brands themselves,” he explains, “so we have a lot of brand ambassadors and promoters dedicated to specific brands, and we train them

The retailer is expanding its already spacious operations at Delhi airport, adding new space and staff

having a tank of watches – with most brands, two or three of the lines are the ones that are going to sell, but if you fill your tank with those two or three, people will look and say, ‘They’re all the same – there’s no choice’. But if you put in another 60 watches – they might be slow movers – but the consumer feels they’ve had a choice. “Wines in arrivals is the same – you have to give customers the option even if they don’t spend time there browsing [different varietals and vintages], because they’ve just flown in and want to go home.” Presenting the right range is something DDFS is also working on in the tea category, which O’Connor says is a big business with plenty of potential for growth. DDFS is running a number of surveys with different agencies over the next couple of months to make sure it gets its tea proposition right. O’Connor says it’s vital for the retailer to identify its tea customers and be sure that what it does corresponds with what they want. “If it’s not, we can rejig it,” he says. DDFS is keen not only to focus on individual categories, but also on lifting sales across the breadth of its entire offer. O’Connor says: “We’ve moved away a 26

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

and brush them up on the knowledge. “Secondly, we do internal training in selling skills and cross-selling. We also share a lot of information with our staff and we get other promoters to highlight their categories to other staff, so somebody on Pernod will be talking to the perfumes and cosmetics promoters, telling them what’s new. That means someone in perfume and cosmetics will be aware of the launch of new products [outside their own category]. We’re always trying to link up and cross-sell internally. “We’re a lot more attentive with staff and staff training,” he says, “especially in arrivals, where we concentrate on speed in moving customers through the process, because they’re tired and just want to get out of the airport. We make sure our staff there is very quick and very attentive, and we’re adding more cash registers in arrivals to support that.” DDFS’s arrivals business accounts for about 60% of its sales, and O’Connor says the retailer is bringing new brands into arrivals that it doesn’t offer in departures. “We’ve got almost 2,000 square meter of space in arrivals, and we’re looking to expand it,” O’Connor says. “We’re talking about this to the airport right now.” Perhaps influenced by The Nuance Group

(India)’s success with inbound electronics sales, he says DDFS has also submitted a bid to start selling televisions in arrivals. “We’re optimistically waiting to see what happens,” he says. “It’s another string to our bow and could be a valuable add-on for the consumer.” Other plans that DDFS is focusing on in arrivals include a new 50 square meter store and a possible ice-cream concept. “We’re in the process of opening [the 50 square meter store] in September,” O’Connor says. “It’ll have all our main categories and will be fairly generic in fixtures and fit-out, as we’re looking to focus on brands and concepts – perhaps Pernod with a liquor shop, or Diageo with a liquor shop, or maybe a wine cellar. Or maybe with one of the perfume and cosmetics brands doing something unique for women – perhaps a make-up area. We’re trying to come up with something different and iconic.” And DDFS is growing its footprint in departures, too. O’Connor says the company has just opened a 20 square meter cosmetics store dedicated to the MAC brand, and that its next expansion will come in the form of two mobile sales units. “We’re hoping to get them into the piers,” he says, adding that they should be up and running by the end of August. “We’ll have one in each pier and we’ll be able to link them in to the busy gates. And if that’s successful, we’ll look at putting one into arrivals. We can roam around as people are purchasing and maybe get impulse sales as well.” However the global economy affects Indian travel retail (O’Connor points out that even a ratings agency’s recent downgrade of the country’s GDP forecast still saw it growing at 5.5%), DDFS seems assured of a bright future at the capital’s hub airport. “There’s nothing in India that isn’t going to grow,” he says. “It’s just a matter of when and how long you’re willing to wait and go through the process. We [Aer Rianta – O’Connor’s former employer] went into Qatar when they only had three planes. Now look at it. When we went into Dubai, people thought we were mad. But if you put the commitment and the time in, you reap the rewards down the line, because you build up the relationships the confidence and the local knowledge, and it stands you in good stead. There’s no opportunity that’s too small in India.” And at Delhi’s T3, it seems, there’s no c opportunity that’s too big.

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Nuance-Watson (HK) Nuance places a strong emphasis on incentivizing its sales force, with initiatives such as its customer service awards for the best performing staff

Fighting spirit Nuance may have lost the battle for Hong Kong International Airport’s coveted concessions, but it’s looking to win the retail war on other fronts BY P. CONVERY uance-Watson (HK) has managed two of the three core-category concessions at Hong Kong International Airport (HKIA) since the hub opened in 1998, developing a world-class duty-free offer and growing the business to a value of around HK$2 billion (US$258 million) annually. So it must have come as a shock a few months back when the airport operator, Airport Authority Hong Kong (AAHK), announced that it had awarded those concessions to DFS, following a tender for all three core concessions. And all the more so as Nuance’s Hong Kong operations were among the company’s most extensive, with 18 licenses and 40 stores. Nuance-Watson (Asia) Regional Managing Director Alessandra Piovesana says: “The management and the staff of NuanceWatson (HK) are naturally disappointed by the outcome of the core licenses tenders. Our determination to set the bar of performance higher and higher year after year and fulfilling our commitments [through] good and bad times … led us to predict a much different outcome.” Piovesana is understandably proud of Nuance’s achievements over the 14 years it has held its concessions at HKIA. “We have nurtured numerous successful brand partnerships, pioneered many innovations, market firsts and exclusives, [given] the categories … added value, new opportunities and revenue streams, serviced and satisfied millions of discerning customers, and earned over 91 industry awards and recognitions,” she says. “Most importantly, with the two concessions, we have developed and progressed with the careers of 600 frontline and back-office staff, who have successfully grown

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

and overcome countless challenges with us.” Ever the pragmatist, Piovesana has been quick to put the setback behind her and focus on the future, noting that Nuance still has “substantial” business interests at HKIA, with 16 licenses, including audio-visual/electronics, luxury brand boutiques and specialty stores in the airport’s Terminals 1 and 2. And she says it will continue to operate its core category stores under an extension granted by AAHK until around the end of the year. Piovesana says that, going forward, Nuance will concentrate on driving sales at its remaining outlets, and on boosting its operations at Singapore’s Changi Airport, where it manages 28 stores spread over an area of about 5,500-square-meters. “At Changi Airport, we have been largely concentrating on perfumes & cosmetics,” she says. “But in 2010, we started to broaden our retail business at Changi to cover fashion, accessories, luggage and leather goods.” Besides P&C, Nuance-Watson Singapore now has six fashion and accessories specialty stores selling a range of products, from luggage to leatherware, with brands including Bally, MCM, Samsonite and Victoria’s Secret. The company was also recently awarded the luxury brand-name concession for an Emporio Armani boutique in Changi’s T2. “We view that as a major strategic step,” says Piovesana. “We hope to expand further and solidify Nuance-Watson (Singapore)’s general merchandise brand business beyond P&C in such a strategic location.” Nuance operates two retail concepts at Zhuhai Airport in southeastern China – The Plaza and Watson’s Your Personal Store – and opened The Atrium department store at the Venetian Resort in Macau in 2007. Piovesana says both are developing profitably.

“We’ll continue to foster each of these operations’ sustainability and competitiveness by implementing exciting marketing and communication activities, as well as improving the merchandise mix,” she says. And she explains that Nuance is also looking to other Asian travel-retail markets for growth. Piovesana says: “Nuance-Watson Asia is keen to invest and expand its general merchandise offers in Asian airports by leveraging Nuance-Watson (HK)’s skills and expertise in related categories, as well as the proven, strong vendor relations it has developed in the past 14 years, managing 280 general merchandise brands in stores, boutiques and specialty shops at HKIA.” “Nuance-Watson Asia doesn’t exclude any opportunities that comply with our strategy,” she says. “We will set our priorities taking into account each opportunity’s sustainability, contribution to strengthening our position in Asia and addition of value to our business, while leveraging our skills and developing new ones. “As China continues its fast-track transformation into a more consumer-focused economy, we will see steady improvements in travel patterns and many more business opportunities,” she explains. “Our stores in Zhuhai Airport and at the Venetian have both set good benchmarks and models for us to evaluate other opportunities in China, and we remain keen to develop new businesses elsewhere on the mainland.” That kind of determination to succeed stood Nuance in good stead at HKIA and, as the retailer maintains its focus on growth elsewhere, it’s likely to stand behind future successes in Asia’s opportunity-rich travel c retail market.

Asia-2012-October-v11 9/30/12 3:30 PM Page 29

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Tasa Meng

The new Cartier boutique in Terminal 2 at Taiwan Taoyuan International Airport

driven

Development Tasa Meng’s hard work and strategic investments are poised to pay off BY MELISSA SILVA

aiwanese duty free operator Tasa Meng has been quite busy within the travel retail market over the last two years, with a number of developments and openings to report. It was back in 2006 that the operator was granted a 12-year extension in District D, Terminal 2 of Taiwan Taoyuan International Airport, where it operates not only duty free shops, but also non-profit facilities, all occupying a total of 10,381 square meters of space. “Tasa Meng is responsible for the overall planning, operating and management of

relax while they wait to board their flights. Travelers can enjoy samples of Johnnie Walker Blue Label and learn about the history of the brand and products via a brand ambassador. The lounge offers limited seating, so only reservations are accepted. This year brought more news from the operator. On July 16, a new 200-square meter Cartier boutique opened in Terminal 2, offering a full assortment of Cartier products. In August, Tasa Meng was awarded a concession to operate a souvenir store, offshore duty free shop and café/restaurant

Measuring 56 square meters, the new Charity Store donates all proceeds to charity foundations in Taiwan

duty free stores in District D of Terminal 2,” says Clare Chen, Director of Business Management Division for Tasa Meng. Since then, Tasa Meng has put into motion a number of development projects in Terminal 2, including renovations made in 2011 to an arts and crafts shop, two souvenir shops and liquor and tobacco shop. “The design of the new shops combines modern aesthetics with original elements to create a vivid store atmosphere,” Chen tells Asia Duty Free. Last year, Tasa Meng also unveiled a Johnnie Walker lounge where customers can 30

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

housed within the Matsu Clare Chen, Director of Business Management Division, Tasa Meng Nation Scenic Area administration’s new visitor center on the Matsu islands, set to open in November. Although construction of the new visitor center has been completed, the brand and product selection for the new stores has not yet been finalized. Chen feels these developments will prove to be successful at attracting more Chinese visitors. In September, the first airport charity store was built between Gate D1 and Gate D2,

along with an airport library at Terminal 2 of Taoyuan International Airport. All proceeds from the 56-square-meter charity store which opened on September 4 will be donated to six charity foundations in Taiwan. The store will offer an array of products, including mugs, bags, mobile accessories and other items from various charity foundations. In addition to stores, Tasa Meng has also made significant investments in passenger service facilities at the airport, including an information counter, a nursery room, a playground, TV lounge, art gallery and a Taiwan indigenous culture park and tea tasting area. The nationalities of Tasa Meng’s customers vary, but the majority are Taiwanese, mainland Chinese tourists and Japanese, with the Chinese visitors significantly contributing to the operator’s strong performance in the duty free market. “Liquor, local souvenirs and luxury products are sought after by Chinese visitors,” explains Chen. More and more Chinese travelers are visiting Taiwan, Chen says, with more expected once the Matsu Nation Scenic Area administration visitor center is in full operation. Tasa Meng’s top three categories in terms of sales are liquor and tobacco, fragrances and cosmetics, and souvenirs. Chen notes that luxury fashion has also received a positive response. With a new souvenir store, an offshore duty free shop and a café/restaurant on the verge of opening, it’s likely that these categories will continue to do well, particularly with the growing number of Chinese c customers arriving.

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Cathay Paciﬁc

Duty free at your doorstep With its passenger-focused approach, Cathay Pacific is increasing the convenience of its inflight sales services, while decreasing its carbon footprint BY MELISSA SILVA

or Cathay Pacific, inflight duty free service is first and foremost about customer comfort, which is why the operator has introduced its convenient, hassle-free home delivery service for passengers aboard flights. Partnering with Inflight Sales Group (ISG), Cathay Pacific offers inflight sales services and jointly manages different parts of the inflight retail business, such as strategy planning, product sourcing, logistics and crew training. Aiming to continuously improve sales service to passengers, Cathay Pacific decided in July 2012 to expand its home delivery service to cover selected regional destinations, including Hong Kong, Japan, Mainland China, Singapore, South Korea and Taiwan. Passengers residing in any of the aforementioned regions can now conveniently place a home delivery order and have the products delivered right to their doorstep. The decision to expand its home delivery service was likely a result of surveying and understanding passengers’ feedback Jessica Wan, Inflight Sales Operations Manager, Cathay Pacific

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

regarding its inflight services, something that Cathay Pacific engages in frequently. “Research is conducted in the format of inflight distributed surveys and focus group discussions with our frequent flyers—members of the Marco Polo Club and Asia Miles,” explains Inflight Sales Operations Manager Jessica Wan. “Inflight sales are part of the topics covered in this research to yield insights into product selection, service standards and sales promotion initiatives.” With Cathay Pacific’s online sales platform, passengers can browse hundreds of duty free items, which can be reserved and claimed onboard their next Cathay Pacific flight, or depending on their region, have the products delivered to their home. Presently, passengers can browse and purchase Cathay Pacific’s “Best Picks for July-September 2012” on the online shop. Some of these items include Hugo Boss Black Menswear Belt Teneo, Anteprima Wirebag – Lucchetto and the Aigner Amalfi II

Ladies Watch, which are all exclusively available on Cathay Pacific. In addition to focusing on understanding passengers and catering to their shopping needs, Cathay Pacific is also conscious about accommodating the environment at the point of sale, and has strategically incorporated green initiatives into its inflight services. “It is our mission to operate as a socially and environmentally responsible company,” Wan tells Asia Duty Free. “When it comes to inflight sales, we currently offer an option for passengers to purchase what we call the ‘FLY greener carbon offsets’ in quantities according to flight class and distance flown. We use the money to purchase carbon credits from projects that actually reduce or prevent greenhouse gases. To help save the environment, we also offer a reusable shopping bag at a very affordable price to reduce usage of paper/plastic shopping bags. Sustainability is one of the key concerns as we evaluate and select products c for onboard retail.”

Cathay Pacific’s award-winning business class Cathay Pacific was recently voted World’s Best Business Class in the highly regarded Skytrax 2012 survey, which queried over 18 million passengers from around the world. Its new Business Class seat features ample legroom, and allows passengers to move their seat back or forward, coupled with 82 inches of bed length (tip-to-tip). A precision toggle provides the option to adjust the seat position to fit the passenger’s posture and comfort. The new fully flat bed is just over 2 meters long. A bed extension also provides passengers with additional hip support. A side storage compartment offers extra knee space for those passengers who wish to sleep on their side. A moveable arm rest can be left up for privacy, or moved down to provide more space.

The side cabinet has enough space for not only a headset and vanity mirror, but also for other small items, such as glasses and gadgets. The cabinet door conveniently doubles as a privacy divider. As for entertainment options, passengers simply need to press a button to open the 15.4inch TV with audio and video on demand. Cathay Pacific’s StudioCX offers a rotating library of more than 100 movies, 500-plus TV shows, 888 music CDs, 22 radio channels and more than 70 video games, all with the option of listening in one of 10 languages and through a noise-cancelling headset. The entertainment control panel includes a multi-port connector that allows passengers to connect their own electronic devices, including iPods and iPhones. The connector also allows passengers to stream audio and video content to their own personal TV, which can be controlled with their own device. Also provided is a USB port for charging mobile devices. Cathay Pacific’s new Business Class has been introduced on its Boeing 777-300ER and Airbus A330-300 aircraft.

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Changi

Perpetual MOTION

hangi Airport Group (CAG), the operator of Singapore’s world-class air hub, is a company that doesn’t like to stand still. It’s spearheaded a program of progressive development at Changi Airport in the three years since it was formed and, according to its Executive Vice President of Commercial, Lim Peck Hoon, Changi’s continued success is all about change. “To maintain Changi Airport’s competitive edge as an air hub and transit destination, it’s important that we continuously enhance our infrastructure and facilities to meet passengers’ evolving needs,” she says. “Following the completion of Terminal 1’s upgrading, we have already kick-started the planning process for another two major development projects that will not only expand Changi’s handling capacity, but also broaden its range of offerings.” The first project is the planning and construction of a new, fourth terminal. Terminal 4 (T4) will be a larger terminal, designed with efficiency and continued passenger traffic growth in mind. 34

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Changi’s overhaul of T1 has given the airport a better, brighter terminal with expanded retail space

Singapore’s Changi Airport has always been a step ahead, constantly changing its commercial proposition. Asia Duty Free reports on its latest moves BY P. CONVERY

Peck Hoon says: “We’re mindful of the rising expectations of passengers for an enjoyable airport experience, complete with a good range of amenities and retail offerings. Hence, in our design of T4, we are planning a wider choice of retail and dining offerings as well as passenger amenities that will better serve the needs of travelers. These will be well integrated with the terminal’s features for a better ambience.” Construction of T4 will begin in 2013 and the new terminal is expected to be ready by 2017. In addition, following the enhancements to facilities in T1, CAG has been looking at how to optimize land use around the terminal. Now, the airport operator has embarked on a T1 expansion project, redeveloping the open-air car park in front of the terminal into a multi-use complex that will be a signature lifestyle destination. “Besides expanding the terminal’s handling capacity,” Peck Hoon says, “the complex will enable Changi to offer a wider range of travel-related services and dedicated facilities to support new initiatives

such as fly-cruise and fly-coach offerings – important options to a rising number of travelers. It is also envisaged [that it will] present attractive retail, entertainment and recreational offerings to our visitors … enhancing [Changi’s] appeal as a stopover destination for transit passengers.” As if CAG weren’t busy enough planning all this development, it has busily been adding new brands to its retail lineup. So far this year, brands making their debut at Changi have included: lingerie and beauty product specialist Victoria’s Secret (operated by Nuance-Watson (Singapore) in T1); South Korean premium ginseng products brand Cheong Kwan Jang (operated by South Korea’s Hotel Lotte in T2); Spanish high street apparel label Desigual (the brand’s first store in Asia, operated by NTS It Is Not The Same Singapore in T3); and Tommy Hilfiger (the label’s first free-standing concept store in Asia Pacific, operated by King Power Singapore in T3. During the remainder of 2012, CAG will open stores including: TWG Tea Boutique (to be operated by TWG Tea Company from

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Changi

the third quarter in T3); Indian gold concept Luvenus (to be operated by Indian Jewellers from the third quarter in T2); handbag and luggage brand Kipling (to be operated by King Power International from the fourth quarter in T2); and Italian luxury cashmere and wool apparel label Loro Piana (to be

operated by Loro Piana Far East from the fourth quarter in T2). One brand CAG has been working closely with is Australian wine label Penfolds. “Penfolds is a key partner to Changi Airport and our retailers,” says Peck Hoon. “They have, together with DFS, supported us with many Changi firsts and exclusive launches over the years. Our retailers also work very closely with other winemakers, including top French chateaux in Bordeaux, [alongside Australian winemakers] Seppelt, Wynns Coonawarra and Coldstream Hills, to provide an attractive assortment of brands and labels. Peck Hoon says: “The wine sector has been growing healthily at Changi, and our retailers look forward to further opportunities for growth as Asian consumers continue to explore wine and gain a greater appreciation of the product. They will continue to focus on building a strong product assortment, brand promotions and staff development to drive sales further. “According to our retailers DFS and Heinemann Asia Pacific, red wines are performing very well at Changi Airport, particularly wines from France and Australia,” she says. “These two [wine-producing countries] are well known to Asian wine con36

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

and Indian passenger traffic has contributed strongly to retail sales growth at Changi this year, with Chinese passenger numbers up 18% and Indian traveler numbers 13% higher. “We believe both markets will continue to hold steady in view of their growing economies and burgeoning middle-classes,” says Peck Hoon, “and this should bode well for Changi’s traffic with both marWith the revamp of T1 complete, CAG is now kets for [the remainder of] 2012.” planning to get the most out “For the first half of 2012, of the land around the terminal, developing a lifestyle Chinese nationals contributed destination complex on the site of a former car park about 25% to concession sales at Changi,” she says. “Categories such as liquor & tobacco, perfumes & cosmetics and luxury goods remain the most favored product categories amongst Chinese passengers. Together with our retail partners, we continuously strive to understand changing consumer preferences and spending trends so as to ensure that our product range meets the needs of our passengers.” Peck Hoon also says passenger traffic growth has been supported by low-cost airlines, which carried 26% more passengers in 2011 – faster growth than among full-service airlines, whose pasPeck Hoon says Changi’s wine retailers senger traffic rose 6%. And she says LCCs have emphasize regular staff training to familiarize continued to drive traffic growth at Changi floor personnel with new wines they intro- during the first half of 2012. And CAG is committed to getting maxduce at Changi so they can explain to customers the origins, history and quality of imum bang for its buck out of those passengers in its retail operations with its anchor wines they are considering for purchase. She says: “Our retailers [also] place a promotion, the highly successful “Be a Changi strong emphasis on maintaining a strong Millionaire”. The second run of Be a Changi Millionoffering of rare and exclusive products for our passengers. For example, DFS has a aire in 2011 saw the airport’s sales grow by range of unique vintages and collections about 20% over the same period in 2010, from top wineries around the world, includ- double the 10% rate of passenger traffic ing three very special vintages it is currently growth during the period. The promotion’s featuring from Chateau Petrus. Heinemann’s third run was launched in May and is ongoVine & Leaf store also carries 50 labels of col- ing until November 11. Peck Hoon says: “The promotion has lectible and rare wines, including 15 labels gained strong traction since its inception, and from the 1855 first-growth qualification. “The ability to introduce rare and exclu- the response from both shoppers and consive products is definitely pivotal in delivering cessions has been favorable. In view of that, an exceptional experience for our wine-lov- we are likely to retain and repeat it as our annual anchor promotion, but we’ll look ing passengers.” Peck Hoon adds that with the impend- at innovative ways to refresh the shopper ing expiry of the current liquor & tobacco experience each time.” Given Changi’s impressive track record contract in early 2014, CAG is preparing to lease out the concession early next year, and of ambitious adaptation and change, there’s that the exercise will give the airport oper- little doubt the airport’s operator will conator a key opportunity to garner new and tinue to deliver on its millionaire promise, and the huge commercial opportunity its innovative ideas from the market. c She says that growth in mainland Chinese business represents. sumers and have featured prominently on Asian markets for several years. “At the same time, our retailers are starting to see Asian consumers becoming more interested in learning about wines from different regions and exploring the many regions and varietals we have on offer.”

Asia-2012-October-v11 9/30/12 3:32 PM Page 37

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Duty Free Philippines

DFP

celebrates a strong 25 years

As Duty Free Philippines’ 25th year winds down, sales, renovations and new projects set the stage for the next 25 BY MELISSA SILVA

ith its 25th year about to wrap up, state-owned retailer Duty Free Philippines (DFP) still has lots of reasons to celebrate. The retailer recorded sales of US$110 million for the first semester of 2012, a 9% growth over last year’s figures of US$101 million. This growth was a direct result of DFP’s intensified marketing activity around its silver anniversary. In addition, DFP held a month-long, mall-wide Year of the Dragon sale in the first quarter of the year. In the second quarter DFP produced a new TV commercial, released print advertisements in major dailies and intensified its social media efforts. Also contributing to the strong performance was the one-day anniversary sale campaign held at the Fiestamall store to reward customers for their patronage of duty free through the years. Named “Anniversary Treat in Fiestamall,” the sale offered most items at a 25% discount. “Sales for that day alone at the Fiestamall reached US$1 million,” says Lorenzo Enchong Formoso, Chief Operating Officer. Along with recently opening the very first Victoria’s Secret boutique in the country at the Fiestamall, DFP has also embarked on a major expansion program of store openings and renovations this year, with arrangements to open duty free outlets already underway at the following locations: Kalibo International Airport (arrivals and departures areas); Embarcadero de Legazpi, Albay; Caticlan Airport and Puerto Princessa, Palawan. These locations are regarded as the country’s top tourist destinations thanks to pristine resorts and beaches (Boracay and Palawan). Looking ahead, DFP plans to close its anniversary year with a bang. Until October 31, the retailer is holding its Early Christmas Regalo, and to drive traffic DFP is distributing gift coupons at the NAIA arrival area of Terminals 1 and 2. The coupon entitles the bearer to a free shirt, umbrella, balikbayan 38

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Duty Free Philippines 25th Anniversary celebration print advertisement

box, passport holder or luggage tag. With a minimum purchase of US$200, the shopper will be given a free jacket. In more development and renovation news, DFP’s seaport store at the Manila Ocean Park was recently opened. NAIA Terminal 1, Gates 1 and 16 were already renovated. Currently underway and due for completion by the end of the year are renovations at the following stores: NAIA Terminal 1 departures area, Terminal 2 arrivals and departures areas; Terminal 3 departures and arrivals areas; Cebu Waterfront Hotel lobby and lower ground extension; and Mactan Cebu International Airport departures, predepartures and arrivals areas. In terms of sales, Formoso cites confectionery, liquor and fashion as the top three categories. As for brands, the top three include Hershey’s, Kraft and Mars for confectionery; Johnnie Walker, Chivas Regal and Alfonso for liquor; and Lacoste, Longchamp and Ferragamo for fashion. Within two of its top categories, DFP has expanded its merchandise lineup with the introduction of new products and brands. “In May, DFP launched to its travel retail part-

VuQo vodka and Guimaras chocolates, two of Duty Free Philippines’ new major products

ners and suppliers in Singapore two of its new major products, the VuQo vodka and Guimaras chocolates to introduce the concept of reverse pasalubong shopping or the purchase of homecoming gifts to friends and family upon the balikbayan’s/traveler’s return to their country of origin,” Formoso tells Asia Duty Free. Balikbayans—overseas Filipino workers—still serve as the bulk of DFP’s customers and constitute 86.68% of its total market. American, Chinese and Canadian customers follow behind at 6.08%, 1.48% and 1.20% respectively. Japanese, Australian, British and Korean customers maintain less space in DFP’s market, adding up to 1.09%, 0.67%, 0.65% and 0.50% respectively. c

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Storck Travel Retail presents ...

The Travel Retail Exclusive World Skyline Pack!

... the new face of its iconic merci Finest Selection at the upcoming TFWA World Exhibition in Cannes (Stand: Mediterranean Village P9)

Asia-2012-October-v11 9/30/12 3:33 PM Page 40

HKIA

Hong Kong

HKIA matches hefty traffic increases with a broad array of plans and projects BY MELISSA SILVA

he first seven months of 2012 were busy for Hong Kong International Airport (HKIA), as the airport handled 32.7 million passengers, representing 5.9% growth compared with the same period last year. At HKIA all air traffic is regarded as international, and according to the latest traffic statistics, the airport set new monthly records for passenger volume in July 2012, handling over 5 million passengers, which represents growth of 0.5% over July 2011, when the previous record was set. The source of this growth can be mainly attributed to travel by Hong Kong residents, which increased by 6% over the same month last year. Passenger traffic to and from Japan and Taiwan was also particularly strong. A spokesperson for Airport Authority Hong Kong (AAHK) says that Cathay Pacific and Dragonair—both of them home-based airlines—contributed most to the increase in passenger traffic. Countries of origin that contributed the greatest share of the traffic increases and make up HKIA’s largest passenger markets include Southeast Asia, the Mainland and Taiwan, constituting 26.5%, 21.7% and 13.8% respectively of the total passenger throughput. This trend has been stable in recent years with no major changes, says the spokesperson. Supporting the passenger traffic increases was the recent addition of four new airlines—Far Eastern Air Transport, Mongo40

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

lian Airlines Group, Peach Aviation and AirAsia Philippines, along with the addition of Air Astana, which offers direct flights from Hong Kong to Almaty. In 2011 actual air traffic at HKIA surpassed the demand forecast in Master Plan 2030 by about two years. While air traffic demand is expected to grow in leaps and bounds in the next two decades, HKIA is expected to reach saturation under the current two-runway system around 2020, says the spokesperson. Also on the rise is HKIA’s non-aeronautical revenue. According to the Annual Report for 2011/12, non-aeronautical revenue at HKIA contributed around 64% in total, representing an approximate increase of 10% over a decade ago. HKIA frequently launches joint promotions with its retailers, including its duty free operators, such as credit card promotions that target specific airport users and encourage them to make purchases. In addition, HKIA regularly launches promotions highlighting unique offers and exclusive products at the airport. “HKIA aims to maintain a leadership position in airport management and aviation-related businesses to strengthen Hong Kong as a center of international and regional aviation,” says the spokesperson. “With increasing passenger traffic at HKIA, we are confident towards the performance of retail and commercial business. Looking forward,

The source of air traffic growth in July can be mainly attributed to travel by Hong Kong residents, which increased by 6% over the same month last year

we will regularly review our strategy and make respective adjustments according to market demand.”

Optimizing operations Among other large-scale projects on HKIA’s agenda is the planned development of a three-runway system. AAHK recently received a study brief issued by the Director of Environmental Protection for the Environmental Impact Assessment (EIA), which outlines the scope of environmental issues to be addressed in the EIA study and related requirements concerning air and water quality, noise, marine ecology, fisheries and hazards, among others. The next step for AAHK is to launch the EIA process, which is expected to take about two years to complete. In accordance with the requirements under the EIA Ordinance, AAHK will include all study findings and possible mitigation measures in the EIA report. “We are dedicated to carry out this work in a highly prudent, transparent and professional manner as always,” the AAHK spokesperson tells Asia Duty Free. “We will not underestimate the challenges ahead, and will explore all possible ways to avoid, minimize, mitigate and compensate for potential environmental impacts.” Technical briefing groups and community liaison groups will soon be set up to facilitate stakeholders’ exchange of views on the EIA and related issues. “We have also launched

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HKIA

Countries of origin that contributed the greatest share of the traffic increases and make up HKIA’s largest passenger markets include Southeast Asia, the Mainland and Taiwan

a dedicated website [www.threerunwaysystem.com] to provide updated information about the airport’s expansion plan, including the study brief and other information for public access,” says the spokesperson. Apart from the three-runway project, HKIA continues to upgrade facilities and services on both a short- and medium-term basis to cope with escalating demand for aviation services and to maintain its competitiveness. For the short term HKIA has embarked upon a three-year, HK$500 million (US$64 million) rejuvenation program to enhance system reliability and customer satisfaction. The program will overhaul some of HKIA’s utilities and airfield ground lighting as well as electrical, mechanical, loading bridge and baggage handling systems. “Last year, we embarked on midfield development to meet our medium-term demand, and Phase 1 of the project is scheduled for completion by the end of 2015,” the AAHK spokesperson says. A midfield concourse with 20 aircraft parking stands will be built, and the airport will have an additional handling capacity of 10 million passengers per annum. “We unveiled the HK$2.2 billion (US$284 million) west apron development early this year, consisting of 16 new parking stands for common use and a cross-runway tunnel linking the West Apron to the cargo area to facilitate efficient apron vehicle traffic,” says the spokesperson. “After these two projects, we will increase the number of parking stands by 25% from 145 at present to 181. We believe we are able to meet demand growth in the medium term.” 42

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Pick-up and drop-off area at Hong Kong International Airport

In other renovation news, 2012 saw the continued expansion and enhancement of HKIA’s retail areas. Construction of 1,000 square meters of new retail space began last December. The new retail space is set to be completed by the end of 2013, and includes a pair of two-storey shops that have been leased to prominent luxury brands. HKIA also started renovating the airconditioning system and kitchens in the Level 8 catering area. Work will be undertaken in halves, with the south side completed by July 2012 and the north side completed by April 2013. Four new restaurants—a Hong Kong-style café and outlets serving Western, Cantonese and Asian cuisine— will open in phases. “We have also opened Dream Come True Education Park and UA IMAX Theatre @Airport this summer to offer a wide variety of entertainment facilities for travelers and the local public,” the spokesperson says. Service enhancements are also being made, including a mobile boarding pass service implemented this year, which allows passengers to receive an electronic boarding pass on their Smartphones. Twelve airlines now issue mobile boarding passes, which can be scanned at 18 of HKIA’s 72 immigration counters at the departures levels. Additional carriers are expected to join the program during the remainder of 2012 and throughout 2013. In addition to the mobile boarding pass service, HKIA began issuing tablet computers to its customer service staff and Airport Ambassadors in 2011, in order to provide real-time flight, hotel and other information to passengers. “By deploying mobile

applications over our secure Wi-Fi network, we give staff access to a greater range of data, thus enhancing passenger satisfaction and our terminal management capabilities,” says the spokesperson. HKIA has offered free Wi-Fi Internet service to the public since 2006. In November 2011, the airport increased the number of wireless access points from 110 to 230, enhancing the system’s coverage area and data transmission capacity. In what has become part of many an airport’s mandate, HKIA has been strongly focused on becoming more environmentally friendly. The AAHK has pledged to make HKIA the world’s greenest airport, the first commitment of its kind worldwide. The airport community also announced that it achieved a 10% reduction in carbon intensity in 2011, which is on track with its goal pledged in 2010 to lower HKIA’s carbon intensity 25% from 2008 levels by 2015. The airport community has carried out more than 300 green initiatives to achieve the 10% reduction, including installing LEDs, improving chiller systems, introducing more energy-efficient vehicles and launching a green educational program. The AAHK will complete the replacement of more than 100,000 lighting applications with LEDs by the end of 2014. It has also announced that all new saloon cars in the Airport Restricted Area (ARA) must be electric from mid-2013, and that the entire ARA saloon fleet must be electric by 2017. The AAHK will invest HK$40 million (US$5 million) to install more charging stations in phases, paving the way for c HKIA’s green future.

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6 different -Collect them all!

Asia-2012-October-v11 9/30/12 3:34 PM Page 44

Inﬂight Sales Group

Leading the way

Inflight Sales Group is flying high with several new developments, a flexible business strategy and new onboard products in the works BY MELISSA SILVA

ith more than 30 years of experience in the inflight travel retail business, Inflight Sales Group (ISG) is headquartered in Hong Kong with regional offices in Paris, the US and Morocco. ISG was founded by Jean-Marcel Rouff and services 18 airlines worldwide, including most Chinese airlines, including Cathay Pacific, Dragonair, Philippine Airlines, Garuda and most recently, India’s number one airline, Jet Airways. ISG maintains a strong focus on service, innovation and results, as evidenced by its status as four-time winner of DFNI’s Inflight Travel Retailer of the Year Award. The company undertakes a lot of research into passenger buying behavior. “We’re very interested in getting behind the numbers and the big data,” says Vimal Rai, Executive Director, Inflight Sales Group. “Understanding why people behave the way they do—in this case why they shop for what they do—is crucial to our business. Understand that and you’ve won half the battle.” Part of understanding passenger buyer behavior involves taking note of shifts in buyer mentality and adjusting sales strategies to capitalize on them as they happen. “We notice subtle but important shifts in passenger mentality these days,” Rai says. “While they may be more willing to shop, they may not necessarily be willing to buy; while they may be willing to buy, they are also very concerned about quality, reliability and 44

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Inflight Sales Group recently launched an inflight collaboration between All Nippon Airways (ANA) and Colette

the entire user-experience—much more so than before.” This shift, coupled with the current worldwide economic conditions, could account for the company’s slower pace this year, as Rai reports that while ISG is still growing, the rate of growth is noticeably slower than it has been in the last two years. As a result, Rai sees an opportunity to fur-

ther differentiate by refining product selections to cater to niche, price-insensitive needs. “One tends to relax when the going is good, so times like these allow us to be more, not less, creative.” ISG is therefore experimenting, having just launched its Regional Delivery Program in Asia, which caters to Hong Kong, Taiwan, Korea, China, Singapore and Japan. In addition, the company has successfully launched an inflight collaboration between All Nippon Airways (ANA) and French fashion and lifestyle retailer Colette, as well as the world’s first inflight popup-shop on Cathay Pacific. Rai hopes that these collaborations will result in developing other special partnerships with brands and subsequently generate more excitement in Cathay Pacific’s and ANA inflight shopping programs. Rai says that ISG’s Home Delivery Program is expanding, and will have the category doubled in size by Christmas 2012. “Our success here—especially in the traditionally quiet third quarter—bucks the general declining trend in high-street retail sales, which is a testimony to our belief that if we give people what they really want, they will buy,” Rai tells Asia Duty Free. As for its onboard selection, ISG sees creativity and innovation developing in the watches and electronics/travel accessories, as both categories have contributed encour-

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aging growth, becoming new drivers of onboard sales. “As trendsetters, we want to be ahead of any buzz and reach a wider customer profile, so we’re on track to deliver some very exciting new products in the upcoming quarters,” says Rai. Rai is confident that these new products will help to drive inflight duty free sales and notes that the company understands the recent shift in buyer mentality and believes it can adjust accordingly. “It’s been more challenging than we’d like it to be, but this is not unexpected,” Rai says. “If you’ve been following the trends, forecasts and making an effort to understand the impact of the changing economic climate, then like us, you’d be expecting such challenges and already be taking concrete steps to mitigate the situation.” Challenges aside, ISG continues to perform well when targeting regions that are economically prosperous, where people have higher disposable incomes and where cultural predispositions to shopping are firmly established, as in Asia. ISG’s 15-plus years of experience in mainland China has certainly helped it to understand the Asian consumer. “Asia, without doubt, is the most promising region economically, for some very selfevident reasons,” says Rai. “Interestingly, we see greater democratization amongst the buyers of duty free—i.e. more people from the back of the aircraft are will-

Advertising in Cathay Pacific’s Discover the Shop for ISG’s pop-up-shop onboard the airline is a first of its kind

ing to spend more money on duty free purchases. Ultimately, it’s a function of the confluence of many factors—showcasing the perfect products, evocative marketing and advertising, serious selling and intelligent

A three-zip cosmetic bag from LeSportsac’s “We Love HK” collection

inventorying—that will ensure success in duty free onboard retailing.” Although Rai says ISG works with all suppliers, he finds it especially gratifying to bring onboard new suppliers who have never worked in travel retail and witness their growth, along with that of their brands. The success of such suppliers and their respective brands is critical to how well ISG performs in terms of sales, but there’s another crucial factor—the cabin crew. “They are our frontline, our sales force and our stars!” Rai says. “Without their efforts, arguably sales would be significantly lower. Hence keeping them motivated, happy and well equipped to deal with the demands of selling inflight is one of our key cornerstones to success.” ISG puts a lot of work into cabin crew incentives, over and above the basic step of merely offering higher commissions on challenging targets. “We prefer to incentivize them in many other ways, often adding value to their personal lives, for example, through exposure to the brands and their products. Rewarding attitudes and encouraging the utilization of techniques that promote repeat purchasing is really the ‘secret sauce’ in the recipe,” says Rai. As for future developments, Vimal expects that incorporating new technology and strategizing accordingly will be the main challenges for inflight retailers. “To be honest, the developments taking place around the world—economically speaking— and how these are affecting the operating bottom lines of airlines, these are surely the biggest stories for some of our customers,” says Rai. “We’re not blind to these concerns in ISG and wherever and whenever possible, we engage our airline customers on various levels to see how we can assist them to strategically demonstrate that inflight travel retail yields some of the highest possible ROI that can be achieved in the industry.” Focusing on how to retail better products in duty free, expanding duty free channels and enhancing marketing efforts in this area— and aiming to be a standard-setter in inflight travel retail—are among the ways ISG plans to support its airline customers and mainc tain a leadership role in the industry.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Exhibitor Spotlight

Showtime

The Wandering Monkey 3D Puzzle Plane

This year’s TFWA World Exhibition welcomes a unique range of exhibitors to the tradeshow floor. Here’s what attendees can expect from a few of the industry’s leading brands BY

MELISSA SILVA

Jonathan Corbett, Founder and Director, The Wandering Monkey BOOTH: MARINE VILLAGE, S4 Where are you based? We’re based in the United Kingdom, south of London. What are some new collections that you will be exhibiting during the show? We’re exhibiting our new products The Wandering Monkey 3D Puzzle Plane and the Wandering Monkey Games Compendium, as well as our current range of exciting Wandering Monkey products. We’re also giving a sneak preview to customers of some of the new products we currently have in development for the next six to12 months. What are your bestsellers in travel retail? Our bestsellers are quite mixed. The Wandering Monkey Activity Pack tops the list; however, close behind is our Singing Rasta Lion who sings “Don’t Worry Be Happy”—he’s great entertainment on cruise ships! We have very high hopes for The New Wandering Monkey 3D Puzzle Plane and believe it will quickly become our bestseller. It has just started selling—as of September 1—and is experiencing some great feedback already. How long have you been supplying travel retail and duty free? The Wandering Monkey has been established since 2004 and was set up to provide a unique and original approach to travel retail and “Entertaining Kids on The Move,” so around eightand-a-half years now. What do you wish to achieve during the TFWA World Exhibition? We’re reaching out to all areas of duty free and travel retail as we believe we have something for everyone, whether it’s products suitable for inflight with bar-cart friendly packaging to retail shops with point of sale branding concepts in-store. As a leading supplier of children’s products to the duty free and travel retail market we believe we can tailor our brand and products to all marketplaces, as it’s important to entertain kids on the move!

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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www.godiva.be

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Exhibitor Spotlight

Spring/Summer 2013 Collection

The new Autumn/Winter collection “Arabesque Colors”

Doris Maute Bobiller, Export Manager, Mavala BOOTH: RIVIERA VILLAGE, RG16 Where are you based? We’re a family-owned and independent company. Everything from the idea to the finished product, including, research and development and manufacturing is done in Geneva, Switzerland. What are some new collections that you will be exhibiting during the show? We will be highlighting one new product from the Mavala and Mavalia skincare line, showcasing Arabesque Mini Colors winter collection nail polishes; the 50th anniversary of our 5ml Mini Colors Winter collection; the Extravagance Lipsticks Winter collection; Hydro-Repairing Foot Care and the Oil Seal Dryer, which is a new product in nail care range.

Philippa Thomas, Brand Development Manager, Nougat London BOOTH: RIVIERA VILLAGE, RE3 Where are you based? Nougat London Limited started life as a fashion collection in London’s West End in 1990. We’re still located in the heart of London with the famous Oxford Street and Theatre Land on our doorstep. What are some new collections that you will be exhibiting during the show? We have a new collection of gifts perfect for every woman who likes a little self indulgence and men who like to keep well groomed! In addition we’ll be showing our new fragrance for men, Amber and Cedarwood, which was launched earlier this year. What are your bestsellers in travel retail? Our bestseller in travel retail remains our Nurturing Hand Cream Duo, which features our ever popular hand cream in two of our bestselling fragrances. Our Nurturing Hand Cream contains Almond Oil, Cocoa Butter and Macadamia Oil to instantly hydrate and smooth the skin and strengthen your nails without leaving a sticky residue.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

What are your bestsellers in travel retail? Pouches with various assortment of nail care, hand care products, like the Travel pouch or Deluxe pouch. Travel-sized products in hand care and face care. How long have you been supplying travel retail and duty free? More than 30 years, starting in Scandinavia, both on planes and cruise ships. Now we’re working with travel retail in Italy, Sweden, Finland, Switzerland and the US, either onboard or in the airports. What do you wish to achieve during the TFWA World Exhibition? Our aims for this year’s exhibition are to open new markets. Although we’re already covering 100 countries worldwide, it’s important to develop the travel retail business, and introduce new clients to our Mavala world.

Nougat London’s Body to Home Collection

How long have you been supplying travel retail and duty free? We’re still relatively new to the industry with our first travel partnership only launching a year ago onboard with P&O Ferries. What do you wish to achieve during the TFWA World Exhibition? TFWA in Cannes remains an important show for us and enables us to further expand our presence in the travel retail market. We hope to expand our presence in South America where we already have a strong following in countries such as Chile. We’re also hoping to talk to distributors with both wholesale and retail channels in various global markets to further expand the business in domestic markets.

Aman Kumar, Travel Retail Director, Pashma BOOTH: YELLOW VILLAGE, D23 Where are you based? The manufacturing is based in India, while the company’s travel retail division is headed out of Singapore. What are some new collections that you will be exhibiting during the show? Exclusively for the TFWA World Exhibition in Cannes, we will be showcasing our Spring/Summer 2013 collection. Apart from the main collection, Pashma will promote its signature ranges of cashmere scarves. The company will also be promoting their second line, Petanu by Pashma, which will offer a range of summer scarves made from fine quality wool, silk and linen that will target more accessible price points. What are your bestsellers in travel retail? The Kashgar collection has been the most successful range in travel retail. The Kashgar collection consists of a range of lightweight wraps made from the finest quality cashmere and silk and is available in an array of prints and patterns that cater both to the fashion forward and classic customer. How long have you been supplying travel retail and duty free? Ten years starting with Dubai Duty Free. What do you wish to achieve during the TFWA World Exhibition? Apart from looking at growth opportunities with our existing portfolio of airport and inflight airlines, we’re targeting growth in airport stores where we’re looking to partner with concessionaires and create a Pashma retail experience either within its general merchandise stores, or through opening standalone Pashma stores. Specific regions we are targeting include Asia, Europe and the Middle East. We are also making a push towards leisure-driven airports as we have had tremendous success there.

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SPECIAL REPORT: WATCHES

If the price fits... p.

Frédérique Constant’s staying power p.

Misaki targets Asia p.

Watch News p.

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Watch Report

If the price fits... These timepiece brands take on the vibrant Asian market with carefully calibrated pricing strategies BY MELISSA SILVA

sia is a prime market for watches today, with several brands making impressive strides in the category across the region. The demand for a more affordable price range is becoming more and more apparent, so much so that Lambretta Watches’ Sales Director of Travel Retail Beatrice Düring believes good pricing has become more of a fashion accessory than the timepiece itself. Fashion, lifestyle and accessories company Fossil seems to agree, as the brand recently identified a “conservative” trend with customers placing orders earlier this year. Sales have picked up since, with the end of the year looking promising. A focus on visual merchandising and sales training likely helped the brand capture this upswing. Top UK watch brand Sekonda seems to be trend-friendly with the strategic pricing of its watches between US$30 and $200. “There’s a very small percentage traveling through airports who can afford to spend thousands of dollars on a watch,” says David Merriman, Managing Director, Sekonda. “We look at ourselves being a little more ‘democratic.’ Our aim is volume and to make it as easy as possible for the consumer and the retailer.” Sekonda has put the idea of making things easy into practice with a special selfselect unit, which offers dummy samples in a presentation box at the top. The customer can have a look at the samples and select a watch of interest. When they remove one, the gravity fed system replaces it with another. It’s also easy for sales staff and merchandisers, Merriman explains. When they receive the stock from the warehouse all they have to do is look at the dummy sample, see where it is on the selection and put the new stock in. Another system, designed for lower priced watches, is the “Euro hanger” system. The price point is given at the top of the display and all the watches below it are under that

From left: Part of Fossil’s Holiday 2012 collection are boyfriend-inspired “Heather” in rose, military-inspired “Nate” in grey with leather strap, and “Emma” in bone, with white leather strap and mother of pearl dial

price. There are pictures of the watches down the middle with the watches arrayed on either side. Currently in Asia, as elsewhere, there’s a strong market shift away from the higher end of the market in favor of affordability, thanks in large part to the Eurozone crisis and panAmerican recession. But for some customers a more affordable price tag equates to a lowquality product, so the task for retailers is to find the proverbial happy medium, especially when dealing with Asia, where customers have a keen eye for value. Brands like Lambretta Watches keep an eye out for global trends regardless of the pressure to sell within an affordable price range. “We’re open minded and don’t hesitate to try out and discuss new ideas with our customers,” says Düring. “As a young, dynamic and small company, we are very flexible and encourage our staff to think creatively.” Creativity and flexibility appear to be aiding Lambretta in Asia, as the company has already exhibited at three travel retail fairs there—ARC Singapore, ARC Shanghai and

TFWA AP Singapore. Lambretta’s exposure at these conferences has brought the company promising contacts in the region, and probably helped it snag recent listings on several Asian airlines. Exposure such as this is critical, and probably contributed to Lambretta producer Capella Industries’ turnover increase of 45% this past June compared to the same period last year, setting the stage for a robust endof-year turnover. As a result, the company’s staff has increased by 20% to handle the growing demand.

Watching the winners Sekonda places a huge emphasis on maintaining brand exposure, to the point that whenever a new airport retailer opts for one of the brand’s displays, Sekonda will supply it free of charge. “We obviously don’t know what watches sell in a particular country, but we do know what our bestsellers are,” says Merriman. “So we do the first selection and after six months we send somebody in who works

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Watch Report

with the buyer and the merchandising team to decide which watches are selling.” Sekonda takes back the watches that aren’t selling, free of charge, and replaces them with watches they think will do better. The brand currently has 150 units around the world in 50 countries in the travel retail channel.

inflight sales on Garuda Indonesia Airlines. To strengthen its network, the brand will be listing its products on Cathay Pacific and Air Tahiti Nui in October, gaining greater exposure in Asia in the first half of 2013. The IceWatch brand already has new partnerships with Inflight Sales Group (ISG) for some of their airlines in the Asia-Pacific region ramping up before yearend, and with duty f r e e shops

to maximize opportunities for both companies. The brand is also expanding the business it does with its most important travel retail partners Gebr Heinemann, Dufry and Nuance Group. Aside from pricing accurately, ensuring maximum exposure and creating profitable partnerships, the collection itself has to have even stronger aesthetic appeal these days to entice the discerning Asian consumer into purchasing. Lambretta’s Cielo Collection— “Cielo” is derived from the Italian word for “heavenly”—places a premium on aesthetic

A space-efficient display from Lambretta Watches at Copenhagen Airport

Creativity and exposure have both been huge factors in the success newcomer IceWatch has experienced this year. The brand has emerged as one of the most creative in the fashion watch segment in 2012, with 12 new collections and new licenses, according to Nathalie Deroanne, Communications Manager. “The watch category is a growing market that stimulates competition and therefore innovation,” says the spokesperson. “We’re more determined than ever to grow, focusing on quality and creativity, and intensifying the interactions with our community to convey the brand’s image and spirit.” Determined to achieve maximum exposure and visibility, the Ice-Watch brand has opened new points of sale and has placed new listings in inflight catalogues and advertisements in key airport areas. Maintaining strong collaboration is another core contributor to market success. Strong strategic partnerships are invaluable, especially when price point is top of mind for the consumer. Accordingly, Lambretta has sought collaborative partnerships that will ensure its presence on airlines and in airport stores. Since last year, the company has been collaborating with Gebr Heinemann and Aélia airport stores, where it has inaugurated a new space-efficient merchandising concept. Likewise, the Ice-Watch timepieces have profited from local partners that have been following the brand’s development since as early as 2007, establishing a strong presence in duty free stores in the Philippines and 52

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Lambretta’s Cielo Mesh collection in silver, gold and graphite features a stainless steel caseback and a dial, second hand and bracelet all in the same color

in downtown areas in Korea with Shilla Duty Free, among others. Ice-Watch’s sales are on the rise, with 2012 ahead of 2011 on a year-over-year basis, says Deroanne. “We gained many new clients, and our original ‘Sili Forever’ collection is a real bestseller in duty free. In only one year the Sili Forever White model was the bestselling model on Air France flights eight times.”

Pricing for the people Armed with its democratic pricing approach, Sekonda has garnered significant business through partnerships with Asian airlines, the largest being Thai Airways where sales of its Rose Gold Chrono model have soared. Sekonda is also well supported by King Power in Thailand. “They understood incredibly quickly how important self-select was with the volume of traffic going through Bangkok,” says Merriman. “They put six units around the airport and sales have been fantastic.” Fossil is currently working very closely with newly acquired brand Skagen in order

appeal, t a k i n g design cues from the 1960s and the iconic Italian Lambretta scooters. Lambretta describes the collection as a fun, retro and colorful collection with an affordable price tag—all the right components for the current consumer environment. The Cielo Mesh model is available in three different metal shades: two layer gold plating, cool silver plating and dark graphite plating. For the TFWA World Exhibition in Cannes, Capella Industries will display its full Avanti concept, a world-time racing Chrono watch inspired by the retro style of the 1960s and 1970s. The analog/digital movement enclosed by the carbon fiber dial offers many functions, such as world time for 56 cities, chronograph with lap times, calendar and back light. Named after a specially tuned Lambretta engine, the Avanti line features a 46 mm case. Fossil’s Holiday 2012 collection will have new pieces in the Heritage Collection, which offers “clean, classic styles from the past.” Among the models are the new Heirloom leather with a vintage feel, new Classics watches with all new-titanium constructions and Signature models inspired by midcentury sunscreens.

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The Ice-Watch brand is betting that the basic colors deployed in its collection will attract and maintain consumer interest. “We were very strong in establishing the 10 basic colors in our collections and giving consumers value by adding a visual and functional importance to the packaging,” Deroanne says. To build brand identity and market experience, the Ice-Watch brand plans to develop new collections with broad ranges of variation not only in terms of color, but also in terms of graphic elements, sizes, materials and functionality, as seen with its Ice-Chrono line. “We also keep developing our classic collections, and they keep being our bestsellers,” says Deroanne. In selecting collections for duty free and travel retail, space considerations are paramount, especially of course for inflight. Due to the limited space trolleys afford, the IceWatch brand limits the collections it selects for inflight to more “standard” colors like white and black (“these are nevertheless our top-selling colors all over the world,” Deroanne points out). It will also add a few selections from the bestselling collections or models that are currently being promoted in the brand’s product placement marketing activities. The duty free business model is more aligned to the domestic retail market, and buyers tend to follow the most successful IceWatch timepieces. “They first create the high visibility and identity of the 10 ‘Sili Forever’ colors,” Deroanne says, “and then they follow our launch calendars to offer the most innovative collections and benefit from the domestic promotions. They translate this into their buying activities during more relaxed travel times.”

A bestseller for Sekonda’s Seksy is the Hidden Hearts watch, which is available on many airlines

is emerging indeed,” Deroanne says. According to figures from Generation in July, the APAC region is forecast to have a share of 39.5% of the world’s travel retail and duty free market (the Middle East comes in at 10%, the Americas at 23.5% and Europe at 26%). In China, duty free business in Sanya and Haikou (both on Hainan Island) is growing very fast for two reasons: the government proactively pushes duty free development in Hainan, and the economy of China simply keeps growing year after year. Hainan is a popular destination for wealthy tourists in China, and China Duty Free Group is doing a good job of developing the potential of the duty free market of Sanya Hainan, Deroanne says. Its existing duty free complex recorded a sales turnover of around RMB1.9 billion (US$301 million) last y e a r.

Tracking the trends Of course, Ice-Watch’s internal design department follows world fashion trends, working closely with worldwide designers or licenses. But Deroanne emphasizes that it’s IceWatch’s loyal customers who have really created the brand, and IceWatch stays close to them through social media channels. The brand’s Facebook community boasts nearly 1.5 million fans and works as a great way to get feedback, share ideas, stay on top of new buying trends—and of course sometimes get something totally unexpected. “The whole Asia-Pacific market

A variation of Ice-Watch’s Ice Chrono line, the Ice-Chrono Electrik is seen here in a black and blue color combination

China Duty Free plans to move the complex from downtown to Haitang Bay, where it will have a much larger space of some 95,000 square meters. Korea’s travel retail and duty free market continues to occupy a leading position in Asia, with a large part of its success due to the rising number of tourists from China. Last year, 23% of tourists arriving in Korea were Chinese. Japanese tourists still hold top place at 34%. WTO figures show that Chinese tourists spend 40% of their budget on shopping, higher than figures for tourists from other countries (Japan 22%: US 19%: UK 26% and France 14%). To stay on top of market trends and maintain customer interest, Sekonda changes its range twice a year. “Every year about 40% of the range changes, and the main change happens in September,” Merriman says. “If there’s a particular fashion or trend, we will very quickly latch onto it and implement it.” Merriman notes that it’s still tough for operators like Sekonda in the low- to mid-price segment, as operators want the highest ticket price possible. But there’s a volume business out there and it’s huge, Merriman says. Sekonda’s bestselling men’s watch is the Rose Gold chronograph, which retails for US$115-$159 depending on location. Bestselling on the ladies’ side is Twilight Pearl at US$125. In the Seksy range, the Hidden Hearts collection is available on many airlines at US$130-$150. “The original Seksy pieces have sold well over the years,” Merriman says, “and Partytime, which is a fun collection, is very popular.” Merriman also singles out Sekonda’s Xpose watches, with a plastic case and a Velcro strap specifically designed for holiday settings, which sells for US$40-$50. The holiday watch has been on the market c for 25 years.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Frédérique Constant

Staying power Already boasting a strong inflight and airport presence, Frédérique Constant is on the hunt for new partners and markets BY MELISSA SILVA

ravel retail remains one of watch company Frédérique Constant’s main focuses to date, with the company planning to continue expansion into more airport locations by working closely with existing partners and gaining new ones. In line with these plans, Frédérique Constant will start trading in Kiev Airport with Gebr Heinemann next month, and will open new locations in Moscow at Vnukovo Airport with Regstaer later this year. The brand is also making great strides in the inflight channel, experiencing very strong growth over the past couple of years with a range of selected timepieces, including travel retail exclusives which are not available in domestic markets. Although listed onboard major airlines such as Air France, KLM, Swiss, British Airways, Cathay Pacific, Air China, All Nippon Airways and Etihad, the company is looking to further expand its inflight business, particularly in the Americas. As for its travel retail locations, growth is fueled in large part by Chinese and Russian shoppers, thanks to buoyant economies and elevated income and purchasing power. “Travelers from China and Russia have a big appetite for luxury,” says Adrienne Ogier, International Sales Manager, “and watches and jewelry have become one of the most popular categories. Customers are buying luxury watches to display their wealth and success or to give as gifts.” Among the brand’s more luxurious collections are the Classics Manufacture for men and the Slimline Mini for women, two of Frédérique Constant’s latest releases. The Classics Manufacture features a luxury dial with an added center second hand and Cotes de Geneve and Collimacon patterns, and is based on the second generation of the Maxime movement, cal. FC-710. The Slimline Mini is a series of ultra54

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

flat models featuring dials that are finished with guilloché patterns and come in either silver or white, with a feminine hearts pattern. A number of exclusive models from the Slimline collection feature diamonds on both the dial and the case. Ogier says she is starting to see a demographic made up of sophisticated travelers who are more knowledgeable and more demanding, which has raised the need for Frédérique Constant to work closely with its business partners to determine the right range of products per point of sale based on passenger profile. The company continuously works towards improving in-store merchandising and brand visibility, and conducts regular training for sales staff to ensure strong product knowledge to better assist this new consumer group. With consumers seeking classic designs at more affordable prices, Frédérique Constant offers exclusives and limited editions, both of which have proven to be very successful. Although small in comparison to other core categories in travel retail, such as perfumes and confectionery or liquor and tobacco, the watch category shows the biggest growth for the brand. In order to maintain that growth, especially during tough economic times, Frédérique Constant aims to “let more people enjoy luxury” by providing consumers with high-quality watches with a classic, contemporary design at good price points. “We regularly launch GWP promotions and other exciting promotional programs across our travel retail locations to drive sales,” Ogier tells Asia Duty Free. “Equally key to our success in travel retail are the numerous promotions such as draws, product launches and watch promotions that we implement in selected airports.”

The Classics Manufacture is based on the second generation of the Maxime movement, cal. FC-710

Contributing to the brand’s strong performance is its successful advertising campaign within select airports, an environment which Ogier feels is “a great place to create and boost brand exposure.” Frédérique Constant regularly runs ad campaigns and billboards across major airports, including a very strong ad campaign currently in place at Hong Kong International Airport. Frédérique Constant’s travel retail business is continuing to grow very strongly in Asia, with new growth opportunities on the horizon for the end of 2012 through the beginning of 2013. “We have plans to increase our market presence in the Asia Pacific travel retail markets with existing partners, and we look forward to conquering new strategic markets in the region,” says Ogier. “We plan to continue to focus our efforts in domestic and international airports in China. We have begun trading last month in Chengdu Shuangliu International Airport with our partner Dufry.” Frédérique Constant is currently the number one brand in terms of units sold at its new Chengdu location, which opened on August 9. Although the Middle East remains a very strong market for the company, there is no indication it will overtake Asia as the biggest c growing market for the brand.

misaki.com

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Misaki

Cutting

edge

Misaki targets the Asia market with a sharp, shark-inspired collection BY MELISSA SILVA

ormerly only available on airlines at the time of its inception in 1987, Monte Carlo-based jewelry company Misaki has been making great strides in establishing itself within the duty free and domestic markets. With Asia serving as one of the brand’s fastest growing markets, sales have skyrocketed in online Korean duty free, operated by retailers such as Lotte Duty Free and Walkerhill Duty Free. This has allowed Misaki to increase its visibility with new Korean web partners, and maintain its standing as a leading international jewelry brand in Korea. “This should give us the opportunity in the very near future to enter the downtown duty free in this country,” says Peter Hermes, Head of Sales, Misaki. As for new developments in Asia, projects in Malaysia are currently ongoing, with a new shop-in-shop opening in November 2012. The company also has plans to renovate its key duty free points of sale throughout the region by implementing its new furniture design concept, which features LED lights and more modern aesthetics. In addition, Misaki plans to further develop its self-service units. In other markets, sales have increased slightly for the brand, due in part to its close collaboration with retail outlets in 56

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Two women’s watches from Misaki’s new Shark collection featuring a red and white silicone strap with shark tooth pins

terms of product re-assortment. “This collaboration will result in our latest collections always being displayed, with a renewed product offering on a regular basis,” Hermes says. To meet customer expectations, Misaki designs two “thematic” jewelry and watch collections per year—spring/summer and autumn/winter. The jewelry and watches are

A new sporty version of Shark Silicone for men, featuring a vibrant orange silicone strap

A model from Shark Leather featuring black leather made to resemble shark skin

designed by an inhouse creative team composed mainly of French and Italian designers. “From the very beginning of the design process our designs are tailored in order to cater to the tastes of the many different regional markets we are present in,” says Hermes. Misaki developed its Shark watch range in response to demand for more colorful styles. Inspired by the success of its men’s Shark Watch collection, the Autumn/Winter 2012-2013 collection will be launched at this year’s TFWA World Exhibition in Cannes. The range, inspired by the “graceful silhouette of the shark,” offers “Shark Silicone,” “Shark Leather” and “Shark Chrono.” Shark Silicone offers over nine color combinations for women, including pink, blue, white and red among others, and of course, silicone straps. For men, Shark Silicone features three new sporty versions, available with a black or white dial and with or without a chronograph. The men’s watches come with a vibrant orange or cool white silicone strap. Shark Leather is available in black, grey and chocolate brown, and like the other models features shark accents, such as a shark tooth pin and leather that resembles shark skin. Two Chrono models from “Shark Steel Chrono” complete the collection. c

Asia-2012-October-v11 9/30/12 3:41 PM Page 57

C H ANG E . Y O U C A N .

VISIT

T F W A CANNES L21-RED VILLAGE

www.ice-watch.com

ICE-WORLD

C O LLE C TI ON

For an appointment contact us: international@ice-watch.com

Asia-2012-October-v11 9/30/12 3:42 PM Page 58

Watch News

MELISSA SILVA

Jacques Lemans

builds on star value Austrian watch maker Jacques Lemans prides itself on offering what it says is one of the best price/quality ratios worldwide since its inception in 1975, noting that as retailers become more sensitive to price and devote more attention to quality and image, the need for fairly priced, quality timepieces is at an all-time high. “Jacques Lemans watches are always up-to-date regarding design and technique, making them the perfect products for travelers who are looking for a gift or accessory at a fair price,” says Christina Bergmann, Head of Corporate Communications, Jacques Lemans. Although there’s been a bit of a slowdown due to the current global economic situation, sales are still doing well for the company, which has positive statistics to report from this past summer. Still in the process of developing a strong position within highpotential regions China and India, Jacques Lemans is also looking to penetrate the Americas, a region equally important to the company’s travel retail business. Jacques Lemans uses high quality, “skin-friendly” materials, with most of its cases and bracelets made of solid stainless steel (316L) and straps made of silicone or caoutchouc. High-tech ceramic, hardened Crystex crystal, as well as high-grade Italian leather are also all part of Jacques Lemans products. All models are water-resistant from 3 ATM to 20 ATM. The company has been making inroads in the sports world for quite a while, particularly in Formula 1 racing from 2006-2011, and in December 2009, the brand became the licensee of the UEFA Champions League. This year marks Jacques Lemans’ third year as the official Timing Partner of the Euroleague Basketball Final Four Event which was held in Istanbul, Turkey. In other sports-related news, Jacques Lemans has been announced as Austrian tennis player Jürgen Melzer’s new watch sponsor until 2013. Jürgen Melzer has his own “sportive-cool” watches that are distributed worldwide. “If two internationally successful players play doubles, customers can expect lots,” says Alfred Riedl, CEO, Jacques Lemans. “The new Jürgen Melzer watch is a real winner.” “I’m really happy to have found a sponsor who embodies everything that makes tennis so unique—precision, elegance, endurance and action,” Melzer says. “I really appreciate working with Jacques Lemans and collaborating on my watch collection, which I’m very proud of.” Jacques Lemans is also sponsoring the Austrian National Soccer Team (since 2009) and the Austrian Ice Hockey Record-Champion EC KAC, and has plans to participate in top equestrian events with its new brand “Pierre Petit.” At this year’s TFWA World Exhibition in Cannes, the company will be presenting new timepieces from three of its sig-

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

nature collections. New from its La Passion collection is “Milano,” which features a solid stainless steel or solid stainless steel IPgold case and hardened Crystex crystal, and offers three strap options: solid stainless steel, solid stainless steel IP-gold or high-grade leather strap. New from its Sports collection is “Liverpool,” which features a solid stainless steel or solid stainless steel IP black case, hardened Crystex crystal and a silicon or

“Milano,” the new timepiece from Jacques Lemans’ La Passion collection, features hardened Crystex crystals

solid stainless IP black strap. Liverpool is water resistant up to 10 ATM and offers 24-hour indication, second and minute counter and a counter stop function. From its Classic collection, Jacques Lemans will be launching three timepieces—the “Verona,” “Moonphase” and “London”— all of which offer solid stainless steel/solid stainless steel IP-black or IP-rose bicolor cases, hardened Crystex crystal and two strap options—high grade leather or solid stainless steel. Each timepiece offers a different time and date function: the Verona displays a large date indicator, the Moonphase displays a weekday-date-month indicator and the London offers a dual time function.

Asia-2012-October-v11 9/30/12 3:43 PM Page 59

Breo set to drop a new timepiece Tateossian’s new “Rotondo Guillouche” watch in silver, featuring an architectural pattern reminiscent of ancient Greece and Rome

First time a charm for Tateossian London-based jewelry and accessory brand Tateossian has experienced positive sales so far this year. Looking to develop its duty free business further, the brand is on the hunt for new airlines and airports. The company recently announced an exclusive listing and collaboration with Japan’s All Nippon Airways (ANA). The collection involved will feature three classic pieces, including an onyx, sodalite and black rutilated quartz semiprecious stone bracelet and cufflinks with Swarovski elements. “I’ve always strived to create a line of jewelry and accessories for men and women that reflect my own personal ethos—stylish, unique and uncompromising quality,” says creator Robert Tateossian. “For the Tateossian customer, quality is key.” Attending this year’s TFWA WE in Cannes, Tateossian will be introducing its Rotondo Guilloche—an ultra slim, stainless steel timepiece with a repetitive architectural pattern used most commonly in classical Rome and Greece. This new style is available in silver or rose gold. Also set to be launched is the Free Time collection, a series of black polycarbonate watches with brightly colored dials. A model from Tateossian’s new “Free Time” collection is made from black polycarbonate and features a bright green dial

Lifestyle company breo is planning to launch its version of the popular one-size-fits-all spring coil watch at the TFWA World Exhibition (Blue Village, Stand H1). Called the “breo Drop,” the watch incorporates The breo Drop incorporates a a quality mineral crystal face rather than the usual plasquality mineral crystal face and tic versions seen on the market. is currently The drop is currently available exclusively to travel retail available exclusively to and is available in six color variations—three white straps travel retail with mint, purple and white faces and three black straps with pink, orange and black faces. “Watches with spring coil straps, enabling them to fit any size or shape of wrist with a simple slap-on movement, are very in-vogue at the moment,” says Alison Fishwick, Global Travel Retail Controller. “Our offer combines the fun, colorful element of this style with a quality mineral crystal face, yet still at a very affordable price.” Fishwick says the new timepiece is a perfect addition to the breo range of watches and complements the brand’s other popular collections, including the Classic, Roam Elite, Curve, Pure and Venture 3-in-1.

Child’s play for Gerzon While Asia continues to be the Zonjee, Senior Manager Gerzon driving force for its inflight busiDuty Free. “Moreover our Disney ness, Gerzon Duty Free is also watches are also made of hypoexperiencing stable growth in allergenic stainless steel cases Europe and the Middle East. and buckles, which also As the watch category conmakes them the safest and tinues to develop, Gerzon among the most durable has noticed a particular watches on the market.” demand regarding chilThe watches come in well dren’s watches for the known Disney character use of safer materials themes for boys and girls, in the manufacturing including: current themes process. Gerzon has from the Disney Pixar Cars taken note and will present movies with the popular talk“Disney Time Teachers” chiling cars; Disney Princess Casdren’s watches made of staintle favorites Cinderella and less steel in Disney’s most famous Sleeping Beauty; Toy Story themes at this year’s TFWA WE with Woody and Buzz (Blue Village, Stand F27). Lightyear; and the Disney clasThe Disney watches also serve sics, Mickey and Minnie Mouse. as great learning tools for children, The inflight collections are Gerzon says. The design of the presented in Disney tin boxes, Part of Gerzon’s new dial makes reading time easier, “Disney Time Teachers” which serve as a storage box and collection, this children’s and with “hour” and “minute” writ- watch featuring Disney as a keepsake. The instore colprincess Cinderella uses ten on the hands children can safer materials, such as lections are presented in winhypo-allergenic quickly learn how to tell time. dow boxes that are presented on stainless steel “These watches are a first when a special Disney counter spinner. it comes to safety, as they’re made to meet Since most of Gerzon’s collections are aira new higher safety standard without the line travel retail exclusives, the company use of lead, nickel, mercury and cadmium says it has successfully separated itself from in the manufacturing process, something standard domestic collections. Gerzon pays that is still the norm with other chila lot of attention to packaging, with all boxes dren’s watch brands,” says Mariëtte designed especially for its inflight sales. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Watch News

Design dominates for Folli Follie Hans Eulenhoefer, Managing Director of the Harston Group

Timex counts on Harston Group Timex, one of the world’s largest watch makers, has signed a strategic partnership with the Harston Group, an international travel retail specialist, to handle the distribution of Timex products in the duty free market. The Harston Group is a group of companies that specializes in the travel retail sector and has represented companies in duty free and travel retail for over a decade. Currently it carries a broad range of products in its portfolio including well-known brands in eyewear, watches and jewelry— and now Timex. The agreement, which takes effect immediately, covers the entire duty free market worldwide with the exception of the US, Canada, UAE, Qatar and China, where agreements already exist. “Timex is absolutely delighted to team up with the Harston Group, a company with a proven track record in the travel retail industry,” says Chief Operating Officer of Global Business Development at Timex Group USA, Kapil Kapoor. “We look forward to working with its team to further build the Timex brand and reach out to a broader set of customers.” Hans Eulenhoefer, Managing Director of the Harston Group, agrees: “Timex has definitely earned a place in the watch world. There’s no denying its strong presence in the marketplace but the potential for more growth is there. We at the Harston Group are totally committed to their success.” Both companies are currently engaged in the transition process and feel optimistic about the coming months.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Greek jewelry and accessory company Folli Follie is enjoying its success in Asia, but the company isn’t coasting; Folli Follie says that it plans to seek further expansion on a global level by focusing on Asia, especially China, and the Americas in both local and travel retail. Looking to Europe, Folli Follie’s travel retail performance has increased this year—specifically in Greece—compared with the same period in 2011. One factor is probably the company’s experienced design team, which consists of top Italian, Swiss and Greek designers. “Our designers’ goal is not only to maintain a fashion orientation complementing the prevalent fashion trends, but also to set them, translating fashion into daily life and offering special characteristic fashion tips with the signature of Folli Follie,” says a A stainless steel rose gold plate spokesperson for the brand. bracelet men’s watch from Links Folli Follie will be participating of London’s Noble in this year’s TFWA World ExhibiClassic collection

tion in Cannes where it plans to present visuals for the latest Fall/Winter 2012 ad campaign featuring Gaile Lai, Folli Follie’s Global brand ambassador. Also set for launch is a selection from the latest Fall/Winter collection of jewelry, watches and accessories. Links of London, the other flagship brand of Folli Follie group, will be featured in the company’s booth where classic selections of the Sweetie, Friendship and Selene watches will be available alongside a notable range of charms. Folli Follie is also set to reveal its new Fireworks collection, which features watches with discreet dials that bear four minimal crystal stones. Inspired by the lunar eclipse, the new Luna watch collection that is also set to be launched features an unusual “dial-inside-another-dial” design. The collection also sets a trend dominated by monochrome, dark, “back to black” options for the winter season. The Lunar watch is available in a plain version, or decorated with crystals or black stones. The brand will be displaying the new Phoebe watches from Links of London, a collection of ceramic watches in black, white and brown with a mother of pearl dial and stainless steel or rose gold plate detailing. Designs with white or pink sapphires encrusted in the dial serve as the “ultra luxury” option with quartz chronograph movement and date function. Also new from Links of London and set for reveal is the Noble Classic collection for men that takes its accents from the past with quartz or automatic movements.

Rotary turns back time Rotary Watches, the family-owned and run Swiss watch company, is set to present a new Swiss-made collection of ladies’ and men’s timepieces at this year’s TFWA WE. Consisting of a capsule collection of eight bracelet models, the “Verbier” collection comprises four men’s automatic models and four ladies’ models, including a rose gold PVD ladies’ diamond set model. “This collection fuses timeless styling with contemporary watch craftsmanship, providing the perfect gift,” says Rohanne Collis, European Marketing and Sales Manager, Rotary Watches. Rotary will also be launching the Rotary Les Originales “Jura” collection, which is significant for the brand, given that the Swiss made collection is assembled using Rotary Watches’ first collection of proprietary movements, Caliber R.1000.21. A men’s automatic bracelet model and ladies’ rose gold PVD diamond set bracelet model from Rotary’s “Verbier” collection

“This is a major landmark in our 117year history,” says Collis. “It demonstrates that we are movement manufacturers unlike many of our higher-end peer group—going back to our original roots of pure ebauche assembly.” These new models are all automatics, with sapphire glass on the front and back. Each timepiece features 21 jewels within the movement for high precision. Collis says that along with its new products, the company is also looking forward to showcasing its new spacemaximizing island display unit at TFWE, designed specifically with airports in mind.

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Made by hand to touch your heart

Frédérique Constant and Nicole Faria share one passion: Supporting the International Children’s Heart Foundation. We will donate the cost of a life-saving heart scan for each Frédérique Constant Double Heart Beat watch sold. Contact. + 41 22 860 0440 www.frederique-constant.com

Asia-2012-October-v11 9/30/12 3:44 PM Page 62

Swarovski

line, suspended from a black PVD chainâ&#x20AC;&#x201D;the associated ring in stainless steel features two sections of black pavĂŠ mini-crystals and a lily motif outlined in pavĂŠ crystal on a black base. The â&#x20AC;&#x153;N the skullâ&#x20AC;? pendant reappears from previous collections, this time sporting earphones. And the â&#x20AC;&#x153;Sympathyâ&#x20AC;? lucky charm bracelet offers a combination of strung beads in dark brown wood and gray crystal ceramic, hand-applied using Swarovskiâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Pointiageâ&#x20AC;? technique with a ruthenium finish. All lines are rounded out with associated key rings, bracelets or pendants in various sizes. A USB key is also available. ! Swarovski has also introduced a line of leather accessories in soft lambskin with a bicolor ribbon in black and orange, which ties into the Octea Abyssal flagship piece from the new menâ&#x20AC;&#x2122;s watch collection launched last year. â&#x20AC;&#x153;Menâ&#x20AC;&#x2122;s jewelry I think is a stable segment of the market,â&#x20AC;? Zottl says. â&#x20AC;&#x153;This is new to us and we want to tap into itâ&#x20AC;&#x201D;just like with cosmetics and skincare like Lâ&#x20AC;&#x2122;OrĂŠal is doing. Weâ&#x20AC;&#x2122;re also trying to open up the mar ket to men.â&#x20AC;? Zottl says that it will be interesting to watch how this new foray into menâ&#x20AC;&#x2122;s jewelry and watches develops, given the brandâ&#x20AC;&#x2122;s strong footprint on the womenâ&#x20AC;&#x2122;s side. ! Distribution is growing rapidly, with branded stores appearing in the growing Asia market as well as in the Americas. â&#x20AC;&#x153;As far as we observe, the Chinese traveler prefers fine and delicate designs,â&#x20AC;? two years after Swarovski first made its Zottl says. â&#x20AC;&#x153;Some like traditional designs. debut in the menâ&#x20AC;&#x2122;s jewelry market. Anything in a circle goes well with these cusThe new lines echo previous tomers as itâ&#x20AC;&#x2122;s part of the Chinese design collections, with what language.â&#x20AC;? More broadly, Zottl notes Swarovski describes as the importance of the self-service edgy themes and conoption in high-traffic travel retail temporary styles. locations, where customers donâ&#x20AC;&#x2122;t Dark-toned crystal is have a lot of loiter time. used, worked in filiAsia and the Americas are the top gree and paired with performers for Swarovski, Zottl says, materials such as leather helping to underpin double-digit and metal. growth rates. He believes the remainHeading up the range is the der of the year will continue on an â&#x20AC;&#x153;Sinousâ&#x20AC;? leather bracelet shaped like a snake, upbeat note and will weather featuring a cobra rendered in grooved some of the insecurities matt stainless steel with a head covmanifesting themselves ered in black pavĂŠ crystal. The in European markets. design is also available on a penPercentage-wise, Latin dant, with the snake reworked America is showing the in a corkscrew shape. The cross strongest growth. symbol dominates the â&#x20AC;&#x153;Somberâ&#x20AC;?

Swarovski: new brands and new menâ&#x20AC;&#x2122;s products drive success in travel retail

warovskiâ&#x20AC;&#x2122;s recently launched fashion jewelry brand lola&grace, targeted at teenage customers, presented its Summer 2012 range in May. The offering includes a seasonal collection based on mixed fabrics, strong patterning and summer hues, offering designs ranging from tribal to candy stripes and hardware, with stacked bangles, layered necklaces and rings. The lola&grace â&#x20AC;&#x153;Festival Feverâ&#x20AC;? range features a laid back, eclectic look using mixed materials and clashing prints. Bold turquoise is heavily employed in tribal elements and wishbone shapes, with Aztec designs, polka dots and Paisley prints teamed with pearls and multiple chains. The look is highlighted with Swarovski crystal in turquoise, deep blue, burnt orange, khaki and pastel accents. The â&#x20AC;&#x153;Global Friendshipâ&#x20AC;? line offers friendship inspired bracelets intertwined with colors of burnt orange, yellow, deep blue and emerald green, utilizing mixed materials, rope details and Swarovski crystals. â&#x20AC;&#x153;Lola&grace is a brand on its own, which we launched for the young market at entry value,â&#x20AC;? says Peter Zottl, Vice President Travel Retail, Swarovski. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s nice, modern jewelry. Weâ&#x20AC;&#x2122;re starting to test with the first store in the UK offering a full assortment of the brand.â&#x20AC;? Swarovski has also premiered a new menâ&#x20AC;&#x2122;s jewelry and accessories collection for Fall/Winter 2012/2013. The collection appears 62

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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L’Oréal Group

Launching

luxury

or Eva Yu, Managing Director Travel Retail Asia Pacific, L’Oréal Luxe, the China market is rapidly emerging as the key to success in Asia. The percentage of Chinese customers is rising in most Asian countries, and their high interest in skincare products is driving the market right now. “The Chinese community has developed a strong culture in gifting and shopping for friends and relatives, hence encouraging high average basket versus other nationalities,” Yu says. Understanding the shopping behavior of the Chinese traveler is crucial and the brand is acquiring that knowledge through staff training, market research and close communication with local market subsidiaries.

Despite the positive impact of the Chinese consumer, overall there’s been a slowdown in Asia Pacific traffic and the economic prospects in some countries in the region remain clouded. Nonetheless, Yu and her colleagues believe huge potential upside can be unlocked by reaching out to the Chinese consumer, improving service levels, and by scheduling more openings and new product launches through the remainder of 2012. Point of sale impact is an essential part of the mix, and Yu says that POS work has been central across L’Oréal Luxe’s brand portfolio. In September, Lancôme Absolue Extrait set up its new podium at Beijing Airport Terminal 3. The 40-square-meter “La Maison Absolue” is the largest scale airport podium ever, Yu says, and provides customers with top-ofthe-line personalized services. The approach to Lancôme gives some insight into L’Oréal Luxe’s approach to all its priority brands. For the

Ralph Lauren’s Big Pony Fragrance Collection For Women promotion was held in Singapore’s Changi Airport (bottom) and at Taiwan Tao Yuan International Airport

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

L’Oréal Luxe builds Asian success with an aggressive schedule of new product launches BY

HIBAH NOOR

Asian market, Yu says, the main objective is to sustain the presence of brands like Lancôme and Kiehl’s while also securing leadership of the market in the men’s skincare category. “In the case of Yves Saint Laurent (YSL), we’ll consolidate the brand’s position as an all-rounded three-axis beauty brand by continuing the story we’ve begun this year on skincare and building consumer awareness upon its strong makeup and fragrance background,” Yu says. “With the upcoming local market launches in Korea and China, we perceive a huge opportunity ahead of us.” With its solid and longstanding heritage in Japanese art and aesthetics, the Shu Uemura brand is taking an increasing share of the beauty market as a diversification of MU brands into skincare takes place, enabling the brand to offer customers a one-stop, start-to-finish total beauty experience finish, Yu says. “Shu Uemura is a key player in this respect with its image as a professional makeup artist brand which blossoms with the holistic philosophy that beautiful makeup starts with beautiful skin. As Greater China

Asia-2012-October-v11 9/30/12 3:45 PM Page 65

customers become increasingly sophisticated and knowledgeable in makeup needs, we look forward to seeing substantial growth of Shu Uemura in this budding region.” Yu says that L’Oréal Luxe plans to ride on the successful flagship approach of fashion house Giorgio Armani to further develop the brand in the high-end luxury space. When it comes to the premium skincare segment, the Helena Rubinstein anti-aging expert positioning continues to bear fruit, Yu says, and it will undoubtedly help that 2012 is the 110th anniversary of the beauty brand—a good opportunity to reinforce its market pull. “With the promising launch results of our fragrances in the first half year, we’re confident in accelerating the sales performance of Ralph Lauren and Giorgio Armani perfumes further,” says Yu. From an Asian perspective, that confidence is reinforced by the fact that L’Oréal Luxe has outperformed the Asian travel retail market so far this year.

Maximum momentum That performance reflects a series of successful launches that have taken place over recent months. At the beginning of 2012, Lancôme kicked things off with the Super Serum feature in January, which saw sizeable investments in major Asian airports. The initiative was a great success, Yu says, with a significant growth in market share in the skincare category for first half of the year. Shu Uemura’s launch of a collaboration with the artist Mamechiyo featured limited edition designs of the brand’s best-selling products, Cleansing Oil and UV Under Base Mousse. Staged throughout Asia from March to May, the collaboration garnered an enthusiastic customer response for the collection. “It is encouraging to see the product offering of Mamechiyo grow two times bigger than last year’s artist collaboration,” says Yu. Kiehl’s new brightening skincare collection, Clearly Corrective, is based on the new high-powered clarifying ingredient, “Activated C”, which Kiehl’s says rapidly corrects dark spots, discolorations and uneven skin tone. The successful launch of the new product resulted in Clearly Corrective Dark Spot Solution being chosen as one of the top 10 customer favorites by Kiehl’s customers in a number of markets. The skincare cate-

And in June, Giorgio Armani cosmetics was launched in Singapore DFS Scottswalk, where the new Southeast Asia flagship is located, Yu says. “To support this strategic opening, we organized a press event with top local media. We’ve received very positive turnout and incredible support from journalists and bloggers who anticipate the huge potential of Giorgio Armani cosmetics.” It’s a busy enough picture, but it will get even busier thanks to L’Oréal’s acquisition of Clarisonic at the beginning of 2013. Clarisonic specializes in sonic skincare devices, topical and technology. The brand will be launched in Asian travel retail next year, Yu says. “I’m confident that the rollout of the brand in Asia will bring additional success to our business.” Clarisonic is a strategic acquisition for L’Oréal, says Nicolas Hiéronimus, Managing Director of L’Oréal Luxe Worldwide. “Devices are emerging globally as an important new skincare category. Clarisonic is the most successful and fast growing premium brand in this category and we will roll it out internationally as well as enhance our service experience in our luxury counters.”

Eva Yu, Managing Director Travel Retail Asia Pacific, L’Oréal Luxe

gory received a tremendous boost with the launch of YSL Forever Youth Liberator, an innovation based on skin glycobiology. Yu says the debut doubled the skincare category’s growth over last year. There was even more on the agenda. “The successful launch of Big Pony Women by Polo Ralph Lauren in April was definitely our biggest perfume launch year to date,” Yu says. “We’ve received a lot of highly positive feedback from retailers and customers who enjoyed our unique, colorful and playful merchandising concept replicating the polo game in an outdoorsy setup.” The promotional angle hasn’t been neglected. In addition to the Lancôme Absolue L’Extrait podium at Beijing Airport Terminal 3 mentioned earlier, Yu says that L’Oréal Luxe has been busy renovating and revamping its top 30 Asian travel retail doors by implementing the “La Maison Lancôme” retail design concept. In addition, Biotherm Homme is staging its “Live like a Man” campaign through the second half of the year, focusing on the recruitment of new users and the repromotion of the brand’s core franchises, leaning heavily on the digital panache the brand has developed.

The tech touch Yu says that L’Oréal Luxe has good depth when it comes to the use of digital technology in promoting its lineup. “We frequently introduce the latest technologies such as the iPad and iPod Touch skin analyzer to improve consultation quality, sales services, and digital initiatives to improve the training of beauty advisors,” she says. Yu singles out YSL as one of the house’s more tech-savvy brands. “The brand has strong digital initiatives to interact with the consumers,” she says. One example is the use of the iPad platform in accessing the YSL “My Youth Index” application

L’Oréal recently acquired Clarisonic, which specializes in sonic skincare devices, topical and technology

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

Asia-2012-October-v11 9/30/12 3:46 PM Page 66

L’Oréal Group

Biotherm’s expansive display in downtown shop Hong Kong Sun Plaza

L’Oréal will be highlighting Lancôme’s La vie est belle during the TFWA World Exhibition in Cannes

for skincare consultation, and the “Color Mirror” application for virtual makeup trials. “Our new concept stores will also install the digital YSL Brand Book to showcase the essence of YSL beauty,” Yu says. Kiehl’s is another standout on the technology front, Yu says, noting its “I Love Kiehl’s Learning” application, which has been developed to promote community building and interactive learning among Kiehl’s Customer Representatives (KCRs). The application program features information on new launches and star products, selling techniques and merchandising guidelines, and enables KCRs to learn about the brand over an iPod Touch. Yu reiterates that Greater China is a booming market for L’Oréal Luxe’s product range, thanks to the surging numbers of affluent outbound Chinese passengers with high purchasing power and an interest in luxury cosmetics products. “We believe it’s important to be relevant and familiar to Chinese travelers in terms of product assortments, prices, communication and services,” Yu says. “Examples are the dramatic increase in the ratio of Chinese-speaking beauty advisors in the entire region, specific training on serving mainland Chinese customers and consultation with affinity to their languages.” Yu says that L’Oréal Luxe has a full slate of second-semester launches ready to go, covering the Lancôme, Kiehl’s, Biotherm, Shu Uemura, YSL and Giorgio Armani lines. Lancôme launched Genifique Yeux Light Pearl Eye Illuminating Youth Activator in September. “It’s a logical extension of the anti-aging legend of Génifique by revealing a smoother, bigger and brighter gaze on the fragile eye zone,” Yu says. “Presenting a totally new sensual experience, the product features a genuine innovation in the application procedure with an avant-garde ‘pearl applicator’ that enables special eye zone massages.” Yu says that this represents a true 66

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

market differentiator for the product. La vie est belle is another highlight, Yu says, describing the new women’s fragrance as “a declaration of the beauty of life.” The fragrance contains almost 50% natural ingredients and so is being promoted as the most exceptional fragrance from Lancôme. The launch of La vie est belle, which is positioned right after Trésor in the Lancôme portfolio, is a “focused and strategic” move that has been undertaken with a view to placing Lancôme in the top ranks of the fragrance category. Under the Kiehl’s banner, an exclusive Asia-Pacific travel retail launch is planned to position Rosa Arctica Youth Regenerating Cream and Eye Balm as an advanced antiaging skincare range based on its rare “Regeneration Flower” ingredient.

Driven to innovate Biotherm’s main play right now is its Force Supreme Youth Architect Serum. Yu says this product is being advanced as the first anti-aging Homme serum which targets and rebuilds damaged skin structure. “This product is a genuine innovation in male skincare,” Yu says. A strategic approach is being adopted for Biotherm, the number one global brand in men’s selective skincare. Yu says this makes it ideal for the travel retail market, where men represent a larger share of the traveling population. “Travel retail is the right place to target these male travelers and to increase penetration with such an inspirational brand.” Next on the list is Shu Uemura. For the second semester Tsuya Skin Youth Infusing Concentrate will be center stage. Tsuya is Japanese for “flawless skin,” and the product promises “petal-soft and porcelain-fine skin” after seven

days of continuous use, through the use of rhamnose molecule technology to ‘switch on’ the regenerative abilities of skin cells. “This truly marks a turning point for the brand, from a ‘makeup artist’ brand to a ‘global beauty expert brand,’” Yu says. Shu Uemura’s holiday collection is due for launch in November, with the collaborating artist none other than the fashion guru Karl Lagerfeld. Lagerfeld has a historical connection with Shu Uemura makeup, having used the products to sketch his fashion designs. He’s created a ‘mon Shu Uemura’ girl motif for the makeup collection, featuring Shu Uemura products such as Cleansing Oil, UV Underbase, Eyelash Curler and eye and cheek palettes. For YSL, 2012 is shaping up to be a memorable year thanks to the 20th anniversary of Touche Eclat. This global best seller in travel retail serves as an emblematic all-season “nomade” product. This year an Illuminating Foundation will be launched to celebrate the anniversary. This liquid foundation builds on Touche Eclat’s success with a lightweight formula free of opaque filler and bolstered with a new complex that endows skin with a “delicate golden glow on skin, divine as sunlight.” The formula eliminates imperfections while enhancing the skin’s natural luster. The second semester saw a crucial launch with the premiere of Giorgio Armani’s Aqua Di Gio Essenza in August. This “overwhelmingly intense and luxurious” Eau de Parfum serves as a reinterpretation of one of the top men’s fragrances. “With this launch, Giorgio Armani continues to build the worldwide success story of Acqua Di Gio, which is at the heart of the brand DNA,” Yu says. “Without doubt, this is going to be c a major launch worldwide.”

Asia-2012-October-v11 9/30/12 3:46 PM Page 67

No.1 BEAUTY CARE** in France

Asia-2012-October-v11 9/30/12 3:46 PM Page 68

Shiseido

Skin supremacy Shiseido’s on a roll in Asia as it zeroes in on a new premium-friendly consumer demographic BY MELISSA SILVA

he Asian market has long been known for the value it places on skincare. For Japan’s premium beauty house Shiseido, therefore, understanding the Asian market and its consumer is the key to success. “If you look at the Asian trend compared to the European trend, Asians start antiaging very young,” says Eyan Chang, Regional Marketing Manager, Shiseido. “You have customers as young as in their 20s coming into our stores for anti-aging creams. They look at prevention rather than protection.” Chang explains that the Asian consumer makes purchases based on their desire to prevent or actually delay the aging process altogether. “It’s very different from the European market—that’s why when you look at a European consumer of the same age as one in the Asian market, the Asian consumer will look relatively younger than a European consumer, because of their early awareness of skin issues. That’s always been the case in Asia—that’s the Asian consumer mentality,” Chang explains. This is why Shiseido has always approached the Asian market with a focus on skincare, and why skincare has always been the business driver for the brand’s travel retail sector. As the number of customers who can afford to purchase premium skincare rises, the demand for premium products in the Asia market has increased correspondingly. “We have that group of customers who are aware that there are premium brands within the store, so they actually come and ask, ‘what is the most expensive product that you have?’” says Chang. Shiseido must ensure its stores—both in airports and downtown—are able to meet the premium needs of this new demographic. 68

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

“If you look at downtown counters, especially the new ones coming up in Hong Kong like DFS Hysan, the concept of the store is more premium,” explains Chang. “The look is more premium and the premium brands actually offer more sit-downs. The

Bio-Performance Advanced Super Restoring Cream includes Shiseido’s exclusive ingredient Bio-Renewal Complex that rejuvenates, lifts and smoothes

concept of the counters is more welcoming so that consumers can stay longer which often results in an increase in number of items per transaction.”

Catching up That’s not to say the airport stores aren’t doing well for the brand. “We offer the premium brands in the airport. We also have premium customers that if they don’t have an opportunity to purchase at a downtown store will pick up their purchases at the airport.” Unlike downtown stores where customers

have the freedom to compare prices with nearby local market stores, the airport shops exist in a contained environment that doesn’t allow for that option. This is a plus for Shiseido from a sales perspective. In addition to offering more premium products and developing travel retail exclusives, Shiseido continues to focus on its main sales drivers in the Asian market— anti-aging and seasonal skincare. “In the first half of the year we’ll see of course whitening and sun care being the key drivers. Nowadays people are very concerned about sun spots and it has become a basic necessity when you talk about skincare,” explains Chang. “Shiseido suncare has always been quite strong in our skincare line.” “Come year-end, with the weather shift in colder climates, we will move into anti-aging and offer much richer textured creams,” says Chang. To further understand its consumer, Shiseido devotes major resources to research, with a team of approximately 2,000 researchers working and developing Shiseido products. “It’s not only improving on the texture and obviously the existing products, but also new innovations that could cater to prevailing or new problems that may emerge in the current age group,” says Chang. With the company currently experiencing double digit growth coming from the greater China region—a trend that has been continuous for the past two years—Chang feels the same region may continue to offer the greatest growth for the brand moving into 2013. At this year’s TFWA World Exhibition, Shiseido will feature the Future Solution LX line which has just recently signed on actress Jennifer Connelly as the spokesperson. c

Asia-2012-October-v11 9/30/12 3:46 PM Page 69

Company News: EstĂŠe Lauder

Skincare News Traveller signs PIA, Shiseido deals Traveller Limited, a renowned in-ďŹ&#x201A;ight services company within the well-established 50-year-old Chalhoub Group, has two important announcements to make: it has begun providing its services to Pakistan International Airways (PIA) and has signed a distribution deal with Shiseido, the Japanese skincare and cosmetics company that is a ďŹ xture in the most exclusive skincare establishments. Although Traveller is geared to airlines in Middle East, it also deals with non-Middle Eastern but regional based airlines. Traveller Limitedâ&#x20AC;&#x2122;s General Manager, Rami Madi, says that two years ago it began servicing airlines based in Iran, both Mahan Air and Iran Air, followed by PIA this year. Part of Travellerâ&#x20AC;&#x2122;s strategy is to analyze the passenger proďŹ le of airlines before offering it speciďŹ c products anyway. â&#x20AC;&#x153;We are open to working with all the airlines in the Middle East and the Near East,â&#x20AC;? Madi says. â&#x20AC;&#x153;Doing business with PIA was just another step for usâ&#x20AC;Ś we are conďŹ dent our new associations will ďŹ&#x201A;ourish.â&#x20AC;? The Shiseido deal is pegged to distributing the well-known skincare and cosmetics companyâ&#x20AC;&#x2122;s products on airlines in the Mideast. Shiseido, which is publicly listed,

started in Japan in 1872, and today operates worldwide, with centers in several European cities as well. It was born in Tokyoâ&#x20AC;&#x2122;s Ginza district as Japanâ&#x20AC;&#x2122;s ďŹ rst Western-style pharmacy, at a time when herbal

Americas Duty Free joins MAC at its Pop-Up Store in Soho to feel the power of its new Wonder Woman collection BY HIBAH NOOR

M Shiseido Bio-Performance Super Corrective Serum

Shiseido Benefiance Wrinkle Resist 24 Day Cream SPF 15

medicine was the norm, founded by the 23-year-old chief pharmacist of a navy hospital, Arinobu Kukuhara. He picked the name from the famous Chinese book of fortune telling Yi Ching. The addition of Shiseido to Travellerâ&#x20AC;&#x2122;s coterie of renowned products is another feather in its cap, as it continues to strengthen its reputation of being the preferred and

reliable choice for airlines in the Mideast region. It provides brands with support in terms of implementing a marketing calendar for the supplier and only offers products to airlines after identifying and analyzing passenger proďŹ les. It also helps in designing and implementing onboard sales procedures and then monitors the performance of the product.

EstĂŠe Lauder introduces Clinique Repairwear Laser Focus All-Smooth Makeup SPF 15 Clinique introduces a new foundation that creates a flawless complexion, softening the appearance of lines and wrinkles immediately and over time, and working to prevent the visible signs of aging. The new Clinique Repairwear Laser Focus All-Smooth Makeup SPF 15 incorporates Clinique's advanced patented technology from its powerhouse de-aging serum, Repairwear Laser Focus Wrinkle & UV Damage Corrector. The result is an ultimate de-aging foundation that softens lines and covers imperfections. Repairwear Laser Focus All-Smooth Makeup SPF 15 is also formulated with ingredients that prevent and repair visible UV damage, one of the leading culprits of lines and wrinkles. This foundation addresses past UV damage, with Ultrasomes that grad-

ually and visibly help repair damage resulting from direct UV exposure. A cocktail of ingredients works to minimize the appearance of damage. Whey Protein helps minimize the appearance of lines and wrinkles, while Siegesbeckia Orientalis Extract and Palimitoyl Oligopeptide help to plump up and fill in lines. Supporting ingredients to protect the skin include Vitamin E to provide antioxidant protection and SPF 15 to help protect skin from future UV damage. Taking a 360Â° approach to age prevention, Repairwear Laser Focus All-Smooth Makeup SPF 15 will improve the texture of the skin while working to prevent future damage. The foundation is available at Clinique travel retail locations in Europe, the Middle East and Africa.

AC has unveiled an exciting new limited edition collection inspired by the legendary heroine Wonder Woman. The highly anticipated collection was recently presented to journalists invited to a special launch at the brandâ&#x20AC;&#x2122;s popular location in Soho, New York. â&#x20AC;&#x153;The iconic super heroine reminds us that within every woman thereâ&#x20AC;&#x2122;s the mighty Aphrodite full of courage, confidence and great charisma,â&#x20AC;? said James Gager, Senior Vice President, Group Creative Director for MAC, La Mer and Jo Malone Worldwide. With its legendary new line up, MAC takes us on an exotic trip to Wonder Womanâ&#x20AC;&#x2122;s home of Paradise Island. Included in the collection is super-sized Mineralize Skinfinish, bold Eye Shadow quads, Pigment, Opulash, Lipsticks and oversized Lipglass, jumbo-big Powder Blush and Penultimate Eye Liner, Nail Lacquer and Lash inspired by the larger-than-life bold babe. Channelling the iconic heroineâ&#x20AC;&#x2122;s beautiful Paradise Island, MACâ&#x20AC;&#x2122;s PopUp shop was transformed with bright red furniture, Wonder Woman lookalike models for makeup demonstrations, Wonder Woman comic books and other bold, eccentric decor. Giving journalists a peek into the behind-the-scenes development of the new line were representatives of MACâ&#x20AC;&#x2122;s Senior Creative Team, including Gager, Jennifer Balbier, Senior Vice President, Global Product Development, Artistry Brands, The EstĂŠe Lauder Companies; and Toni Lakis, Vice President of Creative at MAC Cosmetics. The super-size makeup, combined with red, blue, yellow and gold outer packaging, symbolizes the strength of the Amazon princess. As Gager explained, â&#x20AC;&#x153;The collection shows you the power and force of a woman. Thatâ&#x20AC;&#x2122;s one of the reasons that we feel this collection is even more relevant today. We have this amazing powerful woman Michelle Obama who is changing style... the women of EstĂŠe Lauder, women who run iconic companies.â&#x20AC;? â&#x20AC;&#x153;In this collection we were lucky enough to release our own comic,â&#x20AC;? continued Gager. â&#x20AC;&#x153;We worked with an outside illustrator and a writer and wrote a little story on Wonder Woman. The whole story line is that Wonder Woman arrives in her little jet and sees all these gray looking ladies and sheâ&#x20AC;&#x2122;s really disturbed by this. She learns that Medusa has begun to capture all these ladies and is turning them into â&#x20AC;&#x153;plain Janes.â&#x20AC;? Wonder Woman arrives with her full collection of MAC Wonder Woman and uses her powers to make the world and women beautiful again.â&#x20AC;? The collection works with every skin tone and can go from â&#x20AC;&#x2DC;uberâ&#x20AC;&#x2122; intense to really sheer. Accessories such as makeup bags come in red and bulletproof blue. The range was being sold exclusively at the New York City Spring Street Pop-Up store from January 27 through February 10, when it debuted at all MAC locations in North America. On March 1, the collection was launched internationally, including travel retail. 86

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/ DECEMBER 2011

From left: Toni Lakis, Vice President of Creative at MAC Cosmetics, James Gager, Senior Vice President, Group Creative Director for MAC, La Mer and Jo Malone Worldwide and Jennifer Balbier, Senior Vice President, Global Product Development, Artistry Brands, The EstĂŠe Lauder Companies

MACâ&#x20AC;&#x2122;s Pop-Up store in Soho, New York

A glimpse of MACâ&#x20AC;&#x2122;s limited edition Wonder Woman collection

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH/ APRIL 2011

New for 2013, presents an exclusive Skincare & Cosmetics Supplement that will have bonus distribution at the 2013 TFWA AP exhibition in Singapore.

Beauty Beat: Skincare & Cosmetics

Sun Care Milk-Lotion Spray SPF50+ and Sun Wrinkle Control Cream for Face SPF50+ by Clarins

SPECIAL REPORT: SKINCARE AND COSMETICS

Company: Essence Corp. Description: Achieving a golden tan while preserving the long-term health and beauty of skin has always been the Clarins sun care philosophy. Clarins goes further with two new, high protection (SPF 50+) products for face and body, formulated to protect the most delicate skin in intense sunlight. Launches spring 2011 in travel retail the Americas and the Caribbean

Extra-Firming Body Cream and Lotion by Clarins Company : Essence Corp. Description: A complete skin care action to ensure youthfullooking body contours thanks to firming and replenishing benefits. Skin is soft, firm, hydrated and visibly younger-looking, with a choice of two different textures to satisfy all women whatever their preference, skin type or season. Launches in spring 2011 in travel retail in the Americas and the Caribbean

Rouge Pur Couture Company: Yves Saint Laurent, Parbel Description: A new-generation lipstick inspired by Monsieur Saint Laurentâ&#x20AC;&#x2122;s iconic color palette â&#x20AC;&#x201C; red, fuchsia and orange â&#x20AC;&#x201C; in a collection of captivating couture shades that offer each complexion a customized look. Lips are saturated with intense, stay-true color, thanks to the Coloreveal Technology, while natural extracts provide comforting moisture that lasts all day

Facial Fuel Age Combat Company: Kiehlâ&#x20AC;&#x2122;s, Parbel Description: Facial Fuel Age Combat is a revitalizing oil-free moisture gel in an easilyabsorbed, lightweight formula made from a blend of active, naturally-derived ingredients that help to visibly firm skin under the neck and diminish the appearance of fine lines, while improving skinâ&#x20AC;&#x2122;s tonicity for a firmer, brighter and smoother appearance

New Absolu Voyage Rose palette

Belvada Mascara Noir Company: Belvada Cosmetics Description: Unlike conventional mascaras, with the new Belvada package the reserve product is never exposed to the elements, only the brush and the product on the brush are exposed. The bottle remains closed and the reservoir material is kept fresh. The mascara is also pushed on to the brush via a plunger, this ensures that virtually all the mascara is used

Company: LancĂ´me, Parbel Description: The black lacquered collectible box decorated with a rose carries a concealer, powder compact, blusher, six eye shadows, a black khĂ´l eyeliner and the VirtuĂ´se mascara. For the lips the set contains three lipsticks and a mini lip pencil. To complete the compact thereâ&#x20AC;&#x2122;s an extra-large mirror and four professional-sized accessories (a lip brush, an eye shadow brush, a powder brush and a powder puff)

Phyto Star Eyes Palette Company: Sisley Paris Description: The new â&#x20AC;&#x153;gun metalâ&#x20AC;? version offers four luminous and dazzling shades that can be used alone or combined for a natural or more sophisticated look. The colors include white pearl, black star, silver moon and blue lagoon

Source Defense Serum Company: Bvlgari Description: This cell-energy booster is designed to neutralize the effects of aging at its source by preserving mitochondria, the sole source of cell energy. Combined with a powerful anti-oxidant, this high-performance anti-aging weapon preserves skinâ&#x20AC;&#x2122;s youthfulness capital

The Skincare & Cosmetics Supplement is dedicated to bringing readers the most current news for all things beautyrelated. With in-depth reports on the biggest brands and up-and-comers alike, as well as unparalleled coverage on innovation and trends, there is no doubt that the 2013 Skincare & Cosmetics Supplement will provide both buyers and suppliers with an inside perspective on the shimmering category.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH/ APRIL 2011

Company News: Lâ&#x20AC;&#x2122;OrĂŠal Consumer Products

The

right mix

Lâ&#x20AC;&#x2122;OrĂŠal Consumer Products makes inroads in the Middle East with a varied portfolio BY HIBAH NOOR

ur major development in the Middle East has been getting The Body Shop brand into the airport stores,â&#x20AC;? says Jacques Berger, Travel Retail Marketing Director, Lâ&#x20AC;&#x2122;OrĂŠal Consumer Products. â&#x20AC;&#x153;In the Middle East we have introduced The Body Shop brand in some new countries like Jordan and Egypt and will introduce it in Lebanon very soon. â&#x20AC;&#x153;The Body Shop is available worldwide in 150 countries.â&#x20AC;? The brand is also in the local market in 66 countries and in 2,500 standalone stores worldwide, Berger adds. â&#x20AC;&#x153;We hesitated a little bit about what to put on the shelves at first,â&#x20AC;? Berger says, â&#x20AC;&#x153;but after a while we discovered that the retailers prefer the body butters and all the body products. This is the way to hook the consumers.â&#x20AC;? The Body Shop brand is especially well suited for gifting, Berger says. The â&#x20AC;&#x153;Create Your Ownâ&#x20AC;? concept, introduced last October, allows the consumer to create their own tailored gift set by picking two Body Shop products and then receiving a third complimentary product. The complimentary item can be a mini shower gel or mini body butter. In addition to The Body Shop, Lâ&#x20AC;&#x2122;OrĂŠal Consumer Products handles Roger Gallet, Maybelline and Lâ&#x20AC;&#x2122;OrĂŠal Paris. The latter is a good partner for The Body Shop, according to Berger: in fact The Body Shop was first introduced to the Middle East market following on the success that the Lâ&#x20AC;&#x2122;OrĂŠal Paris brand enjoyed there. â&#x20AC;&#x153;The link between The Body Shop and Lâ&#x20AC;&#x2122;OrĂŠal Paris lies in the fact that they are two affordable brands which are in the airports to attract new consumers,â&#x20AC;? he says. â&#x20AC;&#x153;The idea is to bring additional business to the operators.â&#x20AC;? Travel retail remains an ideal market for luxury products, and Berger believes that because more and more people are traveling, operators continue to need brands like The Body Shop and Lâ&#x20AC;&#x2122;OrĂŠal Paris to attract new categories of buyers and increase revenue. Lâ&#x20AC;&#x2122;OrĂŠal Paris is number one in Jordan, but Dubai is definitely one of the most important Middle Eastern markets for the brand. Itâ&#x20AC;&#x2122;s in all the terminals at the airport, and is backed up by 16 on-site beauty advisors. â&#x20AC;&#x153;We have huge promotions,â&#x20AC;? Berger says. â&#x20AC;&#x153;Most of the time itâ&#x20AC;&#x2122;s skincare because skincare is more successful than makeup at this airport.â&#x20AC;? There are a lot of Chinese travelers who transit through

â&#x20AC;&#x153;O

Revitalift Repair 10 combats 10 signs of aging, including UV damage

Dubai, and they favor whitening products, and a lot of routines like toners and cleaners. Revitalift is one of the top sellers, and its market momentum was reinforced with the recent introduction of Revitalift Repair 10, which combats 10 signs of aging, including UV damage. The Revitalift line also includes Revitalift Program, which Berger says is the number one SKU worldwide. In addition to anti-aging products, mascaras are one of the strong suits for Lâ&#x20AC;&#x2122;OrĂŠal Paris, and the brand introduced two new sets at TFWA WE this year. Mega Volume Collagene 24 Hour introduced new collagen biospheres for added lash volume, boasting an expansion factor of nine in addition to its 24-hour effectiveness. False Lash Telescopic delivers lengthening in addition to a false lash effect, based on the linking and binding of 1.2mm microfibers to create a telescopic ladder. At TFWA WE Lâ&#x20AC;&#x2122;OrĂŠal also introduced a new promotional tool for retailers that leverages digital technology and the Internet. It features a large-screen monitor and enables digital marketing content to be controlled over the Internet. â&#x20AC;&#x153;We can change advertising from our office in all the airports around the world,â&#x20AC;? Berger says. â&#x20AC;&#x153;We can adapt to the type of travelers coming through the airport: for example, for Dubai Airport if thereâ&#x20AC;&#x2122;s a flight coming from China we can make sure that the advertising is in Chinese with subtitles.â&#x20AC;? The unit is already in use in Paris, with French, English, Chinese and Russian options. Germany will follow soon, and Lâ&#x20AC;&#x2122;OrĂŠal is already siz ing up other promising venues.

â&#x20AC;&#x153;The link between The Body Shop and Lâ&#x20AC;&#x2122;OrĂŠal Paris lies in the fact that they are two affordable brands which are in the airports to attract new consumers.â&#x20AC;?

A radiant p. glow

Jacques Berger, Travel Retail Marketing Director, Lâ&#x20AC;&#x2122;OrĂŠal Consumer Products

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/ DECEMBER 2011

Beauty Beat: Skincare & Cosmetics

Cellular Radiance Emulsion SPF 30 Company: +M >^MW^WS Description: YWUV` _XW[ O^WUV`S[W[U Z\W_`a^S ^S]YS[W_VW[U Y\`W\[ cW`V M VWUV YSbSY \T J> ]^\`SP`W\[ M[Q ZaY`W]YS M[`W MUW[U OS[STW`_ SYYaYM^ HMQWM[PS ZaY_W\[ J> W_ QS_WU[SQ `\ VSY] ^S_`\^S e\a`VTaY _XW[ M[Q bW`MYW`e

Double Strength Deep Wrinkle Filler \Z]M[e *WSVYi_ +i7^gMY S_P^W]`W\[ O^SMX`V^\aUV c^W[XYS `^SM`ZS[` `VM` \TTS^_ W[_`M[` M[Q Y\[U `S^Z ^S_aY`_ cW`V\a` `VS a_S \T _WYWP\[S_ )` W_ PYW[WPMYYe QSZ\[_`^M`SQ `\ QWZW[W_V `VS Y\\X \T YW[S_ M[Q c^W[XYS_ M[Q VM_ OSS[ _V\c[ `\ ZW[WZWfS `VS [aZOS^ \T TMPWMY YW[S_ \bS^ `WZS W[ M_ YW``YS M_ T\a^ cSSX_

The color p. field

Rouge Pur Couture Company: LbS_ JMW[` +Ma^S[` +i7^gMY Description: [Sc US[S^M`W\[ YW]_`WPX W[_]W^SQ Oe -\[_WSa^ JMW[` +Ma^S[ì_ WP\[WP P\Y\^ ]MYS``S h ^SQ TaPV_WM M[Q \^M[US h W[ M P\YYSP`W\[ \T PM]`WbM`W[U P\aà^S _VMQS_ `VM` \TTS^ SMPV P\Z]YSdW\[ M Pa_`\ZWfSQ Y\\X +W]_ M^S _Mà^M`SQ cW`V W[`S[_S _`Me `âS P\Y\^ `VM[X_ `\ `VS \Y\^SbSMY KSPV[\Y\Ue cVWYS [Mà^MY Sd`^MP`_ ]^\bWQS P\ZT\^`W[U Z\W_à^S `VM` YM_`_ MYY QMe

Colour Definition Ombre MinĂŠrale 4 couleurs Company: YM^W[_ "^\a] __S[PS \^] Description: %WUVYe P\[PS[`^M`SQ W[ ZW[S^MY ]WUZS[`_ `VS_S SeS _VMQ\c_ ^SMYYe YWUV` a] `VS SeS_ KVS _S` W[PYaQS_ T\a^ _M`W[ M[Q W^WQS_PS[` _VMQS_ M[Q `c\ T\MZ M]]YWPM`\^_

Cellular Energizing Bodycare Company: +M >^MW^WS Description: KVS P\YYSP`W\[ W[PYaQS_ SYYaYM^ [SÛWfW[U M`V M[Q JV\cS^ "SYSS M[Q \Qe +\`W\[ KVS \[S ]M^` _XW[PM^S \[S ]M^` T^MU^M[PS _S` [\` \[Ye VeQ^M`S_ _Z\\`VS_ M[Q TW^Z_ `VS O\Qe W` MY_\ W[bWU\^M`S_ `VS ]_ePVS cW`V M[ W[`^WUaW[U \YTMP`\ê OYS[Q \T Oa\eM[` TâWè M[Q _]WPe [\`S_ cW`V M OSMa`WTaY TY\^MY VSM^`

Visionnaire [LR 4212 4%] Corrector Serum

he core of the Lâ&#x20AC;&#x2122;OrĂŠal Groupâ&#x20AC;&#x2122;s LancĂ´me brand is skincare, and at the moment the most important news in that line is the release of Visionnaire [LR 4212 4%] Corrector Serum. Based on molecular research that has uncovered what Lâ&#x20AC;&#x2122;OrĂŠal calls â&#x20AC;&#x153;a miraculous new moleculeâ&#x20AC;? â&#x20AC;&#x201C; the LR 4212 in the productâ&#x20AC;&#x2122;s name â&#x20AC;&#x201C; Visionnaire promises to rejuvenate skin, imparting finer texture, erasing wrinkles, reducing pigmentary and vascular irregularities and tightening pores. â&#x20AC;&#x153;There is a reason, why we call it the â&#x20AC;&#x2DC;Fundamental Correctorâ&#x20AC;&#x2122; â&#x20AC;&#x201C; for a â&#x20AC;&#x2DC;New Vision of skin perfection.â&#x20AC;&#x2122; Upon application, one can immediately see the skin being transformed,â&#x20AC;? explains Stefan Lehner, Brand Director LancĂ´me for Travel Retail Worldwide, Lâ&#x20AC;&#x2122;OrĂŠal Luxe. â&#x20AC;&#x153;Such major scientific breakthrough in skincare does not happen every three months. We are particularly excited about this skincare launch and are putting all our energy, creativity and excitement in this successful launch. We are convinced that we can recreate a similar success story as we continue building with GĂŠnifique Youth Activator.â&#x20AC;? The â&#x20AC;&#x153;miracle moleculeâ&#x20AC;? in Visionnaire 'self-propels' through the layers of the epidermis, to set off what LancĂ´me calls a series of tissular micro-transformations. The result, the company says, is that â&#x20AC;&#x153;skin becomes finer, wrinkles are erased, pigmentary and vascular irregularities are reduced and pores are tightened.â&#x20AC;? The companyâ&#x20AC;&#x2122;s researchers have always paid attention to the processes that plants use to repair themselves. When damaged, plants produce a â&#x20AC;&#x153;signal moleculeâ&#x20AC;? called jasmonic acid, which activates healing processes in damaged tissues and makes them more resistant. The performance of the new Visionnaire LR 2412 4% product has been tested on Hispanic,

The fountain of youth p.

Kiehlâ&#x20AC;&#x2122;s

L'OrĂŠal breaks new ground with a revolutionary skincare product

HIBAH NOOR

Company: +M >^MW^WS Description: \ZOW[S_ `VS W[`S[_S M[Q WZZSQWM`S MP`W\[ \T M VWUV ]S^T\^ZM[PS _SâZ cW`V `VS _a]SÔ VeQ^M`W[U ]\cS^_ \T M ^WPV eS` YWUV` Z\W_à^WfS^ `VM` ZSY`_ W[`\ `VS _XW[ KVS XSe W[U^SQWS[` W_ >a^S \YY\WQMY >YM`W[aZ cVWPV VSY]_ ^S\ÛM[WfS M[Q ^SOMYM[PS `VS _XW[i_ [Mà^MY OaTTS^ f\[S _VWSYQW[U W` T^\Z `VS QMZMUW[U STTSP`_ \T Sd`S^[MY TMP`\^_ M[Q ]^SbS[`W[U a[[SPS__Mê Z\W_à^S Y\__

LancĂ´me releases Visionnaire based on LR 2412 molecule

Creative cosmetics and revolutionary skincare: traveling consumers will have plenty of options to choose from this season

Cellular Eye Cream Platinum Rare

New and renewed p.

Company News: Lâ&#x20AC;&#x2122;OrĂŠal Group

Editorial Highlights: â&#x20AC;˘ Feature Report: Asian retailers and the skincare category â&#x20AC;˘ Trend Report: An in-depth overview of the year ahead in cosmetics â&#x20AC;˘ Beauty News: Whatâ&#x20AC;&#x2122;s new and noteworthy â&#x20AC;˘ Cosmetic Guide: Seasonal must haves from top brands

Caucasian, Asian and Afro-American complexions. LancĂ´me says that the product can be used on all skin types, including sensitive skin, and on the eye contour regardless of the time of year or time of day. Besides the uniqueness and newness of the new molecule, Visionnaire LR2412 4% is proven to be effective on every type of skin and on all different skin carnations. â&#x20AC;&#x153;We have tested the product on four different ethnicities, always with outstanding results. Visionnaire LR2412 4% truly is a transversal skincare innovation for each and every woman on this planet â&#x20AC;&#x201C; particularly those who are currently not LancĂ´me skin care users. Third, the powerful molecule LR2412 has 100% tolerance â&#x20AC;&#x201C; even around the eye contour â&#x20AC;&#x201C; and is active on 100% of the subjects tested, which makes it perfectly suitable even for sensitive skin types,â&#x20AC;? says Lehner. He continues: â&#x20AC;&#x153;Test results on Asian women are just amazing. They especially love the visible skin perfecting properties of Visionnaire LR2412 4%. This product integrates itself perfectly in the LancĂ´me skincare routine. One starts with GĂŠnifique to activate, then applies Visionnaire LR2412 4% to correct, before using oneâ&#x20AC;&#x2122;s skin care cream(s). â&#x20AC;&#x153;Exclusively for the Asian clientele we have developed in addition a Visionnaire Emulsion and Lotion, to offer a complete â&#x20AC;&#x2DC;Skin Perfectionâ&#x20AC;&#x2122; Routine,â&#x20AC;&#x2122;â&#x20AC;? says Lehner. The bottle design is inspired by a hightechnology mix of glass and metal, centred on a fusion of silver and malachite green. The companyâ&#x20AC;&#x2122;s skincare focus for September and October will be on Visionnaire. Apart from the regular POS and animation programs, it will use different visuals, i.e., testimonials with different ethnicities at the same POS in order to communicate that Visionnaire LR2412 4% truly is a product for every woman.

Skincare Report

KIEHLâ&#x20AC;&#x2122;S ANNOUNCES

radiant

â&#x20AC;&#x153; T rav e l-T e s te d S o lutio ns â&#x20AC;?

glow BY

Unisex skin collection offers remediation for physical and psychological impact of travel BY

Vice President Education and Customer Relations. â&#x20AC;&#x153;Just as jet lag must be tended to for days following travel, travelers should actively nurture aggravated skin two to four days post-travel to restore their skinâ&#x20AC;&#x2122;s natural balance.â&#x20AC;? Extended exposure to confined environments such as trains and planes often leaves passengers feeling psychological and physiological effects on their skin. Travelers face conditions that include low humidity, low air pressure and recycled air, which cause severely parched skin. The typical relative humidity in aircraft cabins for flights over an hour is below 10% for most of the journeyâ&#x20AC;&#x201D;as dry as desert airâ&#x20AC;&#x201D;often dropping to less than 5% on longer flights. To combat these effects, Travel-Tested Solutions employs soothing and anti-microbial properties to help defend skin immediately against these adverse environmental conditions. The collection also contains cactus flower extract, which is

JAMES ROSS

Skincareâ&#x20AC;&#x2122;s vitality is far from fading in Asian travel retail

HIBAH NOOR

or the first time, New York skin and hair care products maker Kiehlâ&#x20AC;&#x2122;s is offering a collection of FAA-compliant, travel-tested formulas titled â&#x20AC;&#x153;Travel-Tested Solutions.â&#x20AC;? This unisex collection is designed to infuse skin with essential moisture and nutrients during harsh travel and post-travel conditions. Kiehlâ&#x20AC;&#x2122;s Travel-Tested Solutions is available exclusively at Kiehlâ&#x20AC;&#x2122;s airport shops, downtown duty-free shops and onboard with Asiana Airlines, Air China, Air Hainan, China Southern and China Eastern airlines from May of this year. Seasoned and infrequent travelers notice the direct effects travel can have on skin including dehydration and skin sensitivity. These stresses start during travel and can affect skin for days afterward. â&#x20AC;&#x153;Preventing hydration loss during a flight is only half of the battle,â&#x20AC;? says Cammie Canella, Kiehlâ&#x20AC;&#x2122;s

&',$'#*1, .-.+$ *(.-'*)

known to deliver 24/7 hydration, and Tibetan ginseng, a mountain plant that increases skin-cell respiration at high altitudes. In combination with the blend of essential oils (lavender, geranium and rosemary), the products help to protect against dehydration. Kiehlâ&#x20AC;&#x2122;s says that all four products in the collection have been tested in-flight by pilots and crew members of Air China, Air Hainan, China Eastern and China Southern. The In-Flight Refreshing Facial Mist is designed to restore complexions irritated by severe in-flight cabin conditions. The mist is formulated with cactus flower, Tibetan ginseng and a blend of lavender, geranium and rosemary. The 24/7 Activated Moisturizer hydrates skin and helps shield it from extreme in-flight skin dryness and dullness. The First Class Purifying Hand Treatment is designed to help protect hands from impurities commonly encountered during travel. The Eucalyptus Lip Relief Class has been formulated with eucalyptus, along with cactus flower and Tibetan ginseng. Each product is available for individual purchase or they can all be bought together as a travel set, which includes a complimentar y limited edition luggage tag.

t is worth remembering that during the global economic downturn of 2009, duty free sales in Asia Pacific continued to grow. In the beauty category, the region has become a core revenue earner for the big houses, and investment has poured in, particularly in the skincare sub-sector. After 2010â&#x20AC;&#x2122;s strong rebound, 2011â&#x20AC;&#x2122;s beauty performance in duty-free proved equally robust, driven by skincare. For example, at Nuance Watson (Singapore), which operates the beauty concessions at Singapore Changi Airport â&#x20AC;&#x201C; one of the biggest duty free locations in the region â&#x20AC;&#x201C; skincare grew at over 20%, faster than make-up or fragrance. In terms of beauty share, skincare saw a +2% gain and Senior Category Manager Chillie Por says: â&#x20AC;&#x153;We predict skincare will probably increase by a further +1.5% $((.(!+ */$+ )%.,'*) "0 ! +!'+'$

>$-3-6*11< ;- +*3 7*< 8/*8 496 2478 56-+0497 +411-+80437 79+/ *7 #-1191*6 &1*80392 '*6-! #*:0*6 *3, )/08- #*:0*6 %119203*803. (<78=2- *6- 8/- 845 7-11-67"? Yves Le Breton, Vice President Corporate and Sales Strategy, La Prairie

points. Skincare will remain a strong driver in 2012, in tandem with the healthy sales trend from PRC travelers, our number one tourist nationality.â&#x20AC;? Nuance Watson (Singapore) has in place several exclusive launches in the pipeline including the arrival of Cotyâ&#x20AC;&#x2122;s US skincare acquisition Philosophy in May and, at the high end, another SKII world exclusive launch in June, part of a larger program of in-store promotions and animations that keeps the sub-sector buoyant. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

ASIA DUTY FREE & TRAVEL RETAILING SEPTEMBER/ OCTOBER 2011

Another luxury skincare brand, La Prairie, is seeing demand at the top end. â&#x20AC;&#x153;Generally we can say that our most precious collections such as Cellular Platinum Rare, Caviar and White Caviar Illuminating SystĂ¨me are the top sellers,â&#x20AC;? says Vice President Corporate and Sales Strategy Yves Le Breton. â&#x20AC;&#x153;Our launches have done extraordinarily well because Asian consumers like new developments in skincare. They understand the luxury and high tech approach of La Prairie.â&#x20AC;? This has helped La Prairie to establish itself well in the region. â&#x20AC;&#x153;While five years ago Asian travel retail was 25% less than the travel retail business in Europe, it is now doing 25% more than in Europe,â&#x20AC;? comments www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

For more information on how to participate, please contact:

Hibah Noor

Ryan White

Kim Carrera

Melissa Silva

Editor-In-Chief

Concessions, Liquor & Tobacco Editor

Advertising & Marketing Manager

Associate Editor

T: +1 905 821 3344 x. 29 F: +1 905 821 2777 E: hibah@dutyfreemagazine.ca

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Asia-2012-October-v11 9/30/12 3:46 PM Page 70

Colorful Licenses

The right

turn

A major career shift 15 years ago led to Colorful Licenses’ current success BY

HIBAH NOOR

ees Homburg, President of Colorful Licenses, is now enjoying the fruits of a momentous career change—one that’s left him busier than ever. Originally a ceramics engineer with his own successful business, he sold his company in the 1990s, spent two years traveling the world with his family, and then started up Colorful Licenses 15 years ago at the suggestion of Colorful Licenses’ showroom in The Netherlands the original owner of Oilily, the Dutch women’s and children’s fashat what Homburg says were premium locaion house. Oilily was established in 1963 and grew tions. As the original owners sold their quickly. After 10 years it already had its own company, Oilily was turned into a sales stores in the US, Japan and Korea. By the and finance driven corporation. After 1980s and 1990s there were some 250 sin- almost completely losing its authenticity, gle-brand Oilily stores all over the world the original owners bought back the brand and started to build it up restoring its core values. After regaining lost ground, the owners approached Homburg with the suggestion that he take over some aspects of noncore production for them. “In the late 1980s and early 1990s, the ceramics industry lost its finanCees Homburg, President of Colorful cial appeal,” says Homburg. “There was Licenses no margin left anymore. Everything was going to the Eastern European countries. I had to buy the license for Oilily and I had to start from scratch.” It was a modest enough start, but the company quickly began to grow in size and to expand the range of products and services it offers. Today the portfolio includes an extensive and exclusive collection of brands, and Colorful Licenses describes itself as “a medium-sized organization that promotes quality and color as the key to our success.” Colorful Licenses has a large product design department in the Netherlands that handles the full

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

lifecycle of product development, and is growing at between 10% and 30% a year. It is now present in 94 domestic markets, as well as airports and cruise lines in Europe. Oilily has long had a strong presence in Asia, and that has naturally been reflected in the market presence of Colorful Licenses. “We started in China by opening 25 domestic shops,” Homburg says. “At the moment we’re in 100 stores domestic. There will be another 150 opened in the next one and a half years. That’s a big success for us.” There are 50 outlets in Thailand, including singlebranded Oilily stores, and the company is present in Asian airports, working with King Power. An Orchard Road domestic store has recently opened in Singapore. “We’re looking at expanding the team to handle the Asian business,” Homburg says. “We have an office in Bangkok now, and we’re looking for staff for both the travel retail and domestic markets. We want to be in exclusive locations.” Homburg is bullish on travel retail in Asia, where the company’s reputation is booming. “Our company is maturing and we’re looking for the big guys like Dufry to get us on board,” he says. Gerzon handles the inflight side and seems to be doing a good job, as Homburg says Colorful Licenses is starting on Asian airlines this fall.

Asia-2012-October-v11 9/30/12 3:46 PM Page 71

The world’s international exhibition for travel retail, duty free and luxury goods

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Middle East Exclusive 25-27 November 2012 Dubai World Trade Centre

Now jointly presented by MEDFA (Middle East Duty Free Association) in partnership with Channels Exhibitions For online registration visit MiddleEastExclusive.com or contact us at Channels Exhibitions on +971 (0)4 282 4737, or email channels@channelexhibitions.com

Channels Exhibitions, PO Box 55254, Dubai, United Arab Emirates. Tel. +971 (0)4 282 4737. Fax. +971 (0) 282 5757. ChannelsExhibitions.com

Asia-2012-October-v11 9/30/12 3:47 PM Page 72

Colorful Licenses

Building the portfolio

high-necked tops paired with side-slit For the Spring/Summer 2013 lineup, Col- Bermuda shorts. For the new collection the classic Rena orful Licenses is working on a new Oilily bags collection. Including a Weekender, Lange tweed jacket has been rendered in an Shoulder Bag and Kids Backpack, the col- ultra-light form for Summer 2013, while lection emphasizes the Oilily brand’s trade- long vests deploy tweeds in a more informal role and the brand’s well mark bright colors. Also part of the known white collar range will be a Beach Bag with a tropical print and a Messenger Bag with a vintagefeel flower motif. The names of the collection’s different prints themselves evoke the brand’s colorful approach: Kaleidoscope, Neoprene, Tropical Tope, Palm Stripe, Fantasy Flora, Pendulum and Mosaic Leather. The bags are made out of premium material and dress adopts focus on offering a marine practical layouts b l u e and features like shade— multiple storage “a symoptions and a For Spring/Summer bol of range of pocket sizes. 2013, Oilily is girlish lightThe two companies are developing shawls, an on-trend item heartedness.” Highputting more work into the this season lights from the 30-piece runkids/teen markets with new bags accompanied by lunch boxes and wallets for teens, and way collection include coat-dresses and “funky motifs and funny prints” for kids, mini-dresses with elaborate embroideries, including a Bowling Bag in a red or lime high-zipped silk jumpsuits with exposed flower tope print, a Backpack with flower backs and simple floor-length evening gowns. accessories and a Trolley in a bright colored Crêpe de Chine trousers evoke a pajama parrot print. For boys there’s a new collec- look while cropped pants and shorts serve tion of bags with plates, labels and tickets as counterpoint to cropped A-line skirts. Tonally, the collection offers a spectrum worked into the print. For Spring/Summer 2013 Oilily is also of summery shades, encompassing sea tones developing shawls, an on-trend item this from sky to ocean blue, pastels and sunset season. The shawls are in light blues, soft tints. “Offbeat” patchwork, intricate crystal applications, ribboned materials and motifs and plain bright orange and blue. Colorful Licenses picked up the world- pleated silk gazar are designed to emulate wide license for the German brand Rena the patterns of flowing water. A loosely cut Lange, a high-end exclusive brand from mini-dress draws on organza for its hem and Munich, six months ago. Rena Lange was a transparent silk overlay diffuses black founded in the 1930s. The license arrange- and white block stripes. One of the major ment is the same as for the Oilily license, pieces of the collection is a “couture-worthy” coat of handwoven strips of Napa and Homburg says. Rena Lange bags retail at €400-€3000 velour leathers. The collection also includes shoes, bags (US$520-$3,900). The line is an extensive one, with the new Spring/Summer 2013 collec- and specials. There are small shoulder bags tion deriving aesthetic inspiration from with chain straps, pochettes and skinny David Hockney’s Swimming Pool series, as belts, along with high-heeled thong sandals well as Romy Schneider’s acting perfor- sporting a “bohemian-lux look.” The sigmance in the classic film of the same name. nature gold buttons of the Rena Lange house “The tranquil summer atmosphere is appear in matte for this season. The leathers reflected in loose folds and blithe cuts, all are also offered in the accessories category. “My philosophy is that as a producer you which retain Rena Lange’s luxurious look,” the company says. The line offers draped silk need the possibility to do mass-market, cocoon shapes of premium materials and mid-market and high-market,” Homburg 72

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

says. “And this is the high market for us. It’s all about quality at my company. If you compare our bags with our competitors’ they’re high quality—and fantastic. I was looking for something like this and then I approached Rena Lange.” The Rena Lange brand is already very well known in Japan, Homburg says, and the new license reinforces

Colorful Licenses picked up the worldwide license for exclusive German brand Rena Lange

Colorful Licenses’ presence in Asia, where color is a major attraction for customers.

Top of the team Homburg’s team now numbers 100 around the world, with hiring still underway. Homburg’s own strength, he feels, is on the production side. “I have that background—I know how to organize the company from the production side and what’s necessary. We know very well what the product costs are. We know how to make a product.” Homburg makes a point of visiting his factories personally. “I go there to make everything happen. I choose factories where we can do that—I make the deals. You need a lot of trust with your partner in China. A lot of money is at stake.” He also works hard at marketing and other phases of the operation. A typical day for the hard-working Homburg starts at 6 a.m. when he rises to feed the horses, cows and dogs at his farm. Once at the office he visits each department in turn to keep in touch with what’s happening. He also calls his contacts in Asia for updates on production and to head off potential problems. “Usually I have different meetings with the people who work for me. I can also have meetings with external relations that visit the office.” He also takes an hour a day for himself, just to think. Answering emails takes up a big part of the day too—something anyone who works in an office can understand. At home at the end of the day, after dinner he calls his contacts in the US and South America. It’s a tough schedule, especially when you throw in all the international travel. And it’s a far cry from ceramics engineering. But judging by his success so far, Cees Homburg c knows how to make the right moves.

Asia-2012-October-v11 9/30/12 3:47 PM Page 73

in t e r n at io n a l asso o f airp c iat io n o rt d u t y fr ee sto re s

2013

Duty Free S h ow of t he

Americ as

April 7 -10, 2013 o Worl d Cente Or O rl an d

lando,

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Pack your bags to join us for the most important week for your business. “I’ve been attending for over 25 years and it always pays for me to be present.” “Exceeded all expectations, we will be back in 2013 for sure.” “Very impressed with the show in terms of the decision makers that attend this event.” - 2012 Attendees

The Duty Free Show of the Americas is THE place to do business, with all primary show events taking place in one venue. Visit www.iaadfs.org/dutyfreeshow for more information and registration, or call +1-202-367-1184 for assistance. The Duty Free Show of the Americas is hosted by the International Association of Airport Duty Free Stores, representing the duty free industry for more than 45 years.

Asia-2012-October-v11 9/30/12 4:09 PM Page 74

Confectionery

Guylian’s Temptations Pouch Pack

News

you to a world of exceptional chocolate pleasure with their smooth melting fillings and crispy textures,” Lindt says. “Whether you are a luscious truffle lover or you prefer the finest Lindt pralines, there is a delicious chocolate delight for any taste.” The Gold Selection is presented in a gold colored box, underlining the range’s premium positioning, and is intended to appeal to a broader demographic of existing and new Lindt customers. The new 275g Lindor Nostalgic Tin Assorted presents four Lindor flavors—Milk, White, Dark and Hazelnut—in a tin decorated with a nostalgic picture and retro design with a Swiss theme. The tin is refillable and serves as a keepsake, being positioned for placement in the souvenir category. The ensemble builds on the success of the Lindor Assorted, which is the best selling Lindor product in travel retail. “The Lindor Nostalgic Tin Assorted is a collector’s item, which is handled as an in out product and is replaced on a regular basis,” Lindt says.

The new Gold Selection includes a range of Lindt pralines and truffles

Positional packaging At its booth at the TFWA WE in Cannes (Marine Village, Stand R7), Lindt & Sprüngli plan to unveil the travel retail exclusive Lindt Gold Selection, which includes a range of Lindt pralines and truffles. Formal launch of the collection into travel retail worldwide will take place next spring. “Presented in exclusive golden boxes, this arrangement of exquisite pralines will take

Storck Travel Retail’s festive mood Storck Travel Retail will present the new face of its iconic merci Finest Selection and its seasonal collections for Christmas 2012 and Chinese New Year 2013 at the TFWA World Exhibition in Cannes (Mediterranean Village, Stand P9). Three new travel exclusive designs are set to be introduced under the merci Finest Selection range. Since its launch in 1993, merci Finest Selection has been listed with more than 95% of Storck Travel Retail’s customers, and has shown excellent results worldwide. To better communicate and emphasize the brand’s travel retail strength,

the merci Finest Selection packaging has been Limited edition enhanced with famous landmerci Finest Selection gift pack marks, namely the Taj Mahal, celebrates Chinese Year of the Snake Eiffel Tower and Big Ben. State-of-the-art printing technology has been used to give merci’s trademark gold color a more upscale and premium look, which supports its position in the informal gifting segment. To celebrate the upcoming Chinese Year of the Snake 2013, Storck Travel Retail is introducing—for the first time in the brand’s history—a limited edition merci Finest Selection 400g gift pack. Embracing the bright red coloring and classic Chinese lantern theme, the brand seeks to balance its European heritage while acknowledging the importance of Asian travelers. Also on show will be Storck Travel Retail’s 2012 merci Finest Selection Christmas pack, which comprises the brand’s eight best-known flavors in a bright red and gold design featuring classic holiday ornaments. Reflecting the brand’s high-end informal gifting character, the pack is not only designed for Christmas but can also be seen as a year-round festive gift.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Belgian indulgence Packaging takes center stage for Guylian, which is introducing new packaging concepts for its Guylian Temptations at TFWA WE. These are individually wrapped premium Belgian chocolates, in the trademark Guylian Seahorse shape and filled with three popular flavors: Original Praliné, Dark Praliné and Milk Truffle. In May 2011 Guylian’s Temptations won a two-star Superior Taste Award, conferred by 120 chefs from the International Taste & Quality Institute, who cited the product’s scent, texture and taste. The range is being extended for 2012 in response to increasing demand in the travel retail sector. The new 537g duty free style pouch pack is designed for capacity and convenience, and Guylian says it will suit all needs from impulse buying for personal consumption to everyday sharing with friends and family. The smaller pouch pack of 131g will be an ideal format for self-indulgence. Continuing with the packaging accents, the new golden box is hand decorated and finished with gold ribbon, positioning it in the luxury gift and event gift category. Guylian is also introducing Perlines, a new smooth center made from a blend of the signature Guylian hazelnut praliné and creamy milk chocolate truffle filling, enclosed with Belgian chocolate and decorated with fine chocolate lines. Perlines are offered in milk, dark and white chocolate. The new range is available in Guylian’s trademark square and rectangular gift boxes. The Belgian Chocolate Sea Shells, Guylian’s star product, are the top Belgian boxed chocolate brand distributed in travel retail and duty free shops. Guylian will also be underlining its commitment to “Project Seahorse,” its campaign dedicated to preserving seahorses and other marine life across the world. The company provides long term support for this work and has been a major partner since 1999. More information is available at www.projectseahorse.org.

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PREMIUM AUSTRALIAN MACADAMIA NUTS

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Liquor Report

Leading with luxury Some big name spirits suppliers discuss the importance of developing luxury and limited edition offerings for the Asian traveler BY RYAN WHITE

sia Duty Free speaks with four suppliers who know a thing or two about providing the luxury spirits that Asian travelers crave. From celebrity brand ambassadors and rare Cognacs to extensive portfolios and limited editions, Rémy Cointreau, Prowood Wine & Spirits, Diageo and Edrington are seeing their hard work pay off in one of the world’s most talked about regions.

“From strength to strength” Asia Duty Free recently had the opportunity to speak with Matthew Hodges, Marketing and Business Development Director for Rémy Cointreau GTR, about what the company has planned for this year’s TFWA WE in Cannes. He tells us In support of Cointreau, Dita von Teese will be making appearances in various parts of Asia in the autumn

Sales of high-end Rémy Martin expressions are excellent in Asia, says Business Development Director for Remy Cointreau GTR Matthew Hodges

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

that as usual, Rémy Cointreau is constantly innovating and will have a number of new products at the show. A limited edition Rémy Martin bottle with a pop culture theme that will appeal to the younger Cognac drinker is set to make its debut at TFWA WE, and the most recent upmarket treatment of Cointreau, called Mabille, will be showcased at the show as well. Additionally, Russian Standard continues making waves in duty free with a new design for Russian Standard Gold. Finally, champagne fans can find the Piper Heidsieck range on Rémy Cointreau’s stand as well. Of course, another great way to make sure that consumers are keeping an eye on your brand is to have a brand ambassador like Dita von Teese. In support of Cointreau, von Teese will be making appearances in various parts of Asia in the autumn as a means of putting the brand in the spotlight. She has also worked with Cointreau to design an elegant and sophisticated fashion item which will create a real stir among the brand’s female consumers, says Hodges. “Asia is a very important market for Cognac and Rémy Martin has an excellent reputation there,” Hodges says. “Sales are phenomenal, especially of those expressions at the top end, including Centaure de Dia-

mant, the travel retail exclusive Premier Cru collection and of course Louis XIII, the pinnacle of the collection.”

A rare breed California-based Prowood Wine & Spirits’ (PWS) offering in Cannes this year is steeped in the mystique and luxury of premium spirits. The brands showcased are led by the aromatic a n d spicy but delicate Arman Cognac from France and an Armenian brandy called Kilikia, made PWS is billing Arman from finest Cognac as the jewel in its g r a p e s portfolio—Arman Extra Old Cognac is a blend of a grown in hundred rare and selected the Ararat Region. eaux-de-vie from the premier growing areas PWS is branding of France Arman Cognac, available in both the XO and VSOP expressions, as the jewel in its portfolio, the “Signature of a royal man.” The company says Arman Extra Old Cognac is a blend of a hundred rare and selected eaux-de-vie from the premier growing areas of France kept in oak barrels for 20 to 50 years to achieve perfection. Kilikia brandy, on the other hand, is available in the XO expression and is named after the Armenian kingdom called Kilikia or “Little Armenia.” This Brandy is aged for 10 years. After tastings, experts described it

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Visit us on stand J24 (Red Village) from October 21-24 at TFWA WE

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Liquor Report

as strong yet delicate, at the same time leaving a definite hint of toasted wood and touch of cinnamon. “Since we established PWS in 2003, we have continued to expand the portfolio by responding to the consumer’s desire for quality and exceptionally smooth spirits,” says PWS owner and President Henrik Sargsyan. “And that is why we observe the market situation with attention, to do our best to provide quality spirits with excellent taste and one of a kind packaging.”

Diageo GTME’s second biggest brand in Asia Pacific travel retail, behind only Johnnie Walker in terms of sales value, is Shui Jing Fang

A varied portfolio “Our continued success in Asia has been driven by the Mainland Chinese traveler as we have strived to address their passion for high end products, including Diageo’s deluxe and super deluxe brands,” says Edward Mirana, Regional Marketing Manager Asia Pacific, Diageo. For example, Johnnie Walker Blue Label – The Casks Edition—a bold limited edition release of the company’s iconic blend—is now available in select travel retail stores for an RRP of US$300 for 1 liter. In addition to this, Diageo GTME has also launched Johnnie Walker Platinum Label, a premium blended Scotch whisky that will sit towards the top end of the Johnnie Walker range. Available originally in 75cl size (RRP US$85) in limited Asian duty free locations, the global duty free launch of the 1 liter variant (RRP US$100) was in June 2012. Meanwhile, Johnnie Walker Gold Label Reserve is another addition to the portfolio. The variant is inspired by the seamless 190year lineage of the Johnnie Walker story. As Diageo GTME’s second biggest brand in Asia Pacific travel retail, behind only Johnnie Walker in terms of sales value, Shui Jing Fang continues to go from strength to strength. During the key selling period over the Chinese New Year, Shui Jing Fang delivered record sales levels, driven by two Shui Jing Fang Chinese New Year Limited Edition packs and supported by Diageo’s Chinese New year activation. Diageo GTME Asia also notes that the Cîroc vodka brand has been successful in bridging the gender and cultural gaps that 78

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

are found in many spirit brands and has proven to be popular with both male and female consumers. Diageo will be embarking on a new travel retail campaign that appeals to both men and women, as well as launching Coconut and Red Berry flavors. Sales for Smirnoff, the world’s number one vodka, have recently been driven by the latest travel retail exclusive launch of Smirnoff Gold Collection. With the luxury of gold in every drop, Smirnoff Gold is a cinnamonspiced vodka. “We believe the Diageo portfolio is well positioned to meet the demands and sophistication desired by the Chinese traveler,” concluded Mirana.

“Very special indeed” “TFWA World Exhibition gives us an excellent opportunity to showcase some of the innovations which Edrington is offering,” says Edrington Area Director Steven Sleigh. “Additionally, on display will be the third in a series of limited edition travel retail exclusives, The Macallan 1824 Collection Limited Release

MMXII,” Sleigh told us. “Just 1,824 decanters of this single malt whisky, which has been selected from some of the rarest casks at The Macallan Estate, were produced for sale so it is very special indeed.” Rich rosewood in color, The Macallan Limited Release MMXII (49.5% ABV) offers sweet dried fruits, ginger and nutmeg, as well as soft wood spice on the nose. On the palate it is initially spicy then softening to release an abundance of sultana and raisin with chocolate orange in the background. This superb richness of character and color can be attributed in part to the oak casks in which this single malt has lain. The casks were hand crafted specifically for The Macallan in Jerez, southern Spain and seasoned for two years with the finest dry Oloroso sherry. The Macallan has been the star brand in the dramatic growth enjoyed by Edrington’s brands, with duty free sales volume doubling in just four years. This impressive growth makes it currently the leading single malt by volume and value in Asia. Visitors to this year’s TFWA will also see the new Masters of Photography Leibovitz edition at Edringc ton’s stand. The Macallan Limited Release MMXII is presented in a beautiful decanter, which has been hand-blown from the finest crystal to achieve flawless clarity

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Liquor News Gulf Beverages launches three variants of The Glenrothes at Delhi Duty Free Gulf Beverages has announced that its success in India continues with the launch of three variants of The Glenrothes at Delhi Duty Free this past summer. First, the Robur Reserve, a travel retail exclusive product, is available in a 1-liter bottle and retails at US$60. Secondly, the Vintage 1991, again a travel retail exclusive and sold in a 1-liter bottle, retails at US$130. Finally, the Oldest Reserve, packaged in the iconic Glenrothes frame made of copper and oak, is available at Delhi Duty Free in a 70 cl bottle. The Oldest Reserve is a travel retail exclusive and retails at US$365 per bottle. “The Glenrothes Oldest Reserve is exactly that— the oldest of our multivintage expressions, combining The Glenrothes that was distilled in different years,” explains Leon Ashford, Director of Business Development at Gulf Beverages. “This first bottling is selected from spirit that came off the stills in 1967, 1972, 1977, 1979 and 1980, and has been matured for at least 30 years—some of the liquid much longer. The wonderful and rare casks chosen deliver a unique personality with very mature characteristics.” Gulf Beverages has set its sights on being the go-to distributor for suppliers looking to crack the challenging Indian market and has made great strides in recent months in terms of high-profile listings and promotions in the region. “Logistically we have the ability to get stock into India easily due to our location in Jebel Ali,” Ashford says. “I think our model truly does provide some-

thing different from the traditional model, which has been importing from the point of production or taking from one of the domestic operators, which is difficult given taxation and other regulations.” Meanwhile, it appears that Delhi Duty Free and Gulf Beverages are certainly in agreement as to the region’s potential. Delhi Duty Free is a joint venture company between Delhi International Airport Limited, IDFS Tradings Ltd and Aer Rianta International. As India’s progressive economy continues to grow, Delhi Duty Free says it sees “an exciting opportunity within the airport retailing business” and aims to be one of the world’s prominent travel retail shopping experiences and destinations.

H. Mounier unveils new offerings for TFWA 2012 Prince Hubert de Polignac and T.T. Trunks have combined their skills to design a trunk reflecting an alliance between cognac and poker that symbolizes their values of modernity and the sharing of their respective universes. To celebrate this alliance, the cellar master wanted to reveal his most original brandies, secretly preserved in the paradise of the House of Polignac. The magic of very long aging has given this exceptional blend of Grande Champagne cognac an intense aromatic richness, combined with the vivacity of aromas of candied citrus, delicately enhanced by notes of dried fruit. Its finish is

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

described as “intense and captivating, characterized by extreme finesse.” Also new at the H. Mounier stand (K21, Red Village) will be an exceptional new decanter of Prince Hubert de Polignac Extra Cognac. A rare spirit for true Cognac

lovers, the variant is presented in a prestige gold and black box adorned with the company crest. This new Extra Cognac is offered in a gracefully rounded decanter that jealously guards the Grande Champagne Cognac within. In the mouth, the Prince Hubert de Polignac Extra reveals exceptional smoothness and aromatic depth. Long years of aging give this Cognac the characteristic mellow roundness of the Charente terroir. Its deep golden robe with amber glints offers hints of vanilla, cinnamon and almonds, with candied fruit and spice aromas beneath. A new collaboration between Prince Hubert de Polignac and T.T. Trunks has resulted in a product perfect for travel retail

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International Beverage brings new Balblair Vintage 1996 to Cannes International Beverage Holdings is to unveil a new vintage of Balblair Highland Single Malt Scotch Whisky at TFWA Global Exhibition in Cannes. The first release of the 1996 Vintage replaces the very popular 1995 Vintage and is to be available exclusively through global travel retail in one-liter bottles. Balblair has become established as a favorite of discerning whisky drinkers worldwide. As well as being the only distillery solely releasing vintage malts, the contemporary packaging design sets it apart and the traditional production methods result in a single malt of rare quality. As with every expression, Balblair 1996 is un-chill-filtered, naturally colored and bottled at 46% ABV for maximum flavor delivery. Sparkling golden in appearance, this expression is full of fruit and spice on the nose with aromas of lemon, orange, toffee and coconut with an intriguing hint of subtle smoke. Maturation in American oak ex-bourbon casks has added characteristic sweet, toffee and vanilla

Balblair 1996 is un-chill-filtered, naturally colored and bottled at 46% ABV for maximum flavor delivery

flavors. Sweet and spicy on the palate, summer fruits and toffee combine with chocolate and coconut in a long, smooth finish. Distillery Manager John MacDonald observes of his latest selection: “Much time and care has gone into creating this new vintage and I am satisfied that all the hard work, dedication and devotion have paid off. I am confident that whisky enthusiasts worldwide will really enjoy this newest member of the Balblair family.” James Bateman, Global Travel Retail Manager for International Beverage, states: “Travel retail is a key sales platform in International Beverage’s brands strategy for 2012. The decision to launch the latest Balblair Vintage at TFWA Cannes underlines our commitment to invest in the global travel retail channel.”

Russian Standard launches new Gold bottle Russian Standard Vodka, the number one premium vodka in Russia, announced today the launch of the new Russian Standard Gold bottle. With the outstanding continued success of the Russian Standard Vodka brands in Russia and around the world, Russian Standard has completed a dramatic makeover of its highly exceptional product Russian Standard Gold, which will be available around the world at the end of 2012. Russian Standard Gold is a unique combination of classic vodka and carefully selected extracts of Siberian Ginseng, or “golden root” in Russian, adding vigor and vitality to celebrations. The product packaging, with its sumptuously embossed gold foiled label and one-of-a-kind gift box, embodies the true traditions of Russian generosity and gift giving. “This is what makes Russian Standard Gold an ideal vodka to celebrate the many golden moments in The new bottle for Russian Standard Gold features an elegant glass design and cork closure, evoking thoughts of celebration

life shared with friends, family and colleagues,” the company said in a press release. The new bottle for Russian Standard Gold is a feast for the eyes. Its elegant glass design and cork closure evoke images of pure celebration. Key features of Russian Standard Gold are highlighted on the label, including the key ingredients of Siberian Ginseng. Russian Standard Gold is produced in Russia, the true emotional and spiritual homeland of vodka. The vodka is produced at Russian Standard Vodka’s state-of-the-art distillery in St. Petersburg using the finest Russian winter wheat from the southern steppes of Russia and the softest waters from Lake Ladoga. A rich vodka with aromas of caramel coupled with warm vanilla and cinnamon tones on the palate makes Russian Standard Gold the standard of excellence in vodka. Russian Standard notes that travel retail will be a key part of the launch of the new Russian Standard Gold bottle and the product will feature heavily at the supplier’s stand at TFWA WE.

The Wild Geese sail into Cannes carrying new treasures Protégé International has announced the next chapter in the story of its multi award winning The Wild Geese Collection of Premium Spirits with the launch of The Rum Collection. Two expressions will be on show at the world’s largest luxury goods exhibition, TFWA in Cannes. With stunning designs and unique bespoke bottles, The Wild Geese Rum Collection tells the harrowing and heroic story of the Irish in the Caribbean. The Wild Geese Premium Rum is an intense blend of aged rums from Barbados, Jamaica and Guyana. Its clean, pronounced nose hints at its soft, aged Bajan heritage and honeyed aromatic Guyanese and Jamaican pot still character. On the nose there are distinct yet light and fresh notes— sage and eucalyptus—in harmony with a strong depth and perceived sweetness. Also on show will be The Wild Geese Golden Rum, a versatile rum that comes from the very heart of the Caribbean. Handpicked parcels of rum aged for up to five years create a unique, versatile, sweet and complex light golden pouring rum that’s perfect for making cocktails. To lear n more about the rums, please visit Protégé International’s stand at Red Village K12.

The Wild Geese Premium Rum is an intense blend of aged rums from Barbados, Jamaica and Guyana

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Diageo GTME

The Smirnoff Gold display at Dubai Duty Free—the variant was launched late last year

Driving growth

RYAN WHITE

Asia Duty Free speaks with Managing Director of Diageo GTME Roland Abella about the company’s performance in FY2012 and what’s to come over the next 12 months Asia Duty Free: Can you comment on Diageo’s results for the six months ended June 30, 2012? Roland Abella, Managing Director, Diageo GTME: I’m delighted to say that Diageo GTME had a strong year, a result which underlines the buoyancy of the channel and the strength of our brand and innovation agenda within it. Both these factors give us confidence in our plans for the coming years. The performance we delivered during FY2012 reflects some really groundbreaking work by our people. They, like me, are really energized by our growth potential and I am personally very excited to be leading what is an extremely important market for Diageo. Our positive performance in FY2012 was driven largely by our super deluxe brands and it is in this category that our innovation has led the way. We had successful launches of Johnnie Walker Platinum Label, Johnnie Walker XR21, Johnnie Walker Gold Label Reserve and Johnnie Walker Blue Label – The Casks Edition. They have helped grow our Johnnie Walker footprint and will continue to build our range of highly competitive super deluxe Scotch whisky offerings. We know that our shoppers in travel retail are

looking for exclusive products in the duty free store and we will increasingly produce exclusive propositions to capture their attention. Global travel Asia remains a major contributor to our global travel business, driven by the consumer dynamic, gifting opportunities and the growing level of international travel. The excellent growth in that market is largely down to our reserve brands. In the Americas performance was driven by, among other things, inflight and cruise channels and the continued strong performance of Johnnie Walker Double Black. MENA continues to contribute to our growth, with markets such as Lebanon performing particularly strongly. Furthermore, our business in North Africa is growing and we believe there is certainly potential. Europe, as you might expect, remained uneven and economically challenging in some markets, but we were pleased to maintain our business performance there. ADF: Given the number of Asians traveling throughout the world can you tell me the importance that your Chinese white spirits will play in the future? RA: Shui Jing Fang, our premium baijiu brand, continues to be a major success, and it is second only to Johnnie Walker in the Asia market. It has huge appeal for the Chinese traveler and last year we made the most of its popularity through new merchandising and our special Chinese Mid Autumn Festival pack.

“Our relationships with our customers are of vital importance to us and I am passionate about improving our collaborations to deliver real commercial value to them and ourselves.” Roland Abella, Managing Director, Diageo GTME

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John Walker & Sons Odyssey, Diageo’s latest innovation in the ultra deluxe segment

sponsorship during the Abu Dhabi Grand Prix. Through our strong customer partnerships we have developed a number of stand-out campaigns around this which are really delivering scale in building brand equity and driving growth both in travel retail and in our domestic markets.

Shui Jing Fang will remain an important part of our offering in the fast-growing luxury spirit segment in the key markets of China, Hong Kong, Taiwan and Singapore. But, because the Chinese traveler is truly international, we are seeing Shui Jing Fang gaining a foothold in other regions. It has been a notable success story in travel retail in locations as diverse as Paris, London and San Francisco. ADF: Related to the above, Diageo has a great stable of very high-end brands. What other brands are important for you in terms of the burgeoning middle class in emerging markets? RA: In addition to our super deluxe offerings, brands such as Johnnie Walker Black and Johnnie Walker Red continue to be important to us in duty free, as do others such as Baileys and Smirnoff. ADF: In the Americas, MENA or Asia what large-scale promotions do you have planned for the coming months? RA: It’s a matter of watch this space, because we will be putting together some really exciting things for John Walker & Sons Odyssey, our latest innovation in ultra deluxe, and continuing to support our deluxe brands such as Johnnie Walker Platinum, Johnnie Walker Gold Label Reserve and our ultra-premium vodka Cîroc. ADF: In terms of innovation, what will we see in the months to come? RA: We have a particularly strong innovation pipeline, but for reasons of commercial confidentiality I can’t be specific about our future plans. You will have seen our recent launch in global travel Asia of John Walker & Sons Odyssey, a spectacular and unique triple-malt blend that joins our unmatched portfolio of luxury spirits. Our innovation is focused on the super deluxe and ultra deluxe sectors and will be accompanied by luxurious and engaging experiences in travel retail, through partnerships and investments in our customer relationships. We have some exciting new launches planned this year but, as I’m sure you can appreciate, I can only give the details when they are formally unveiled. ADF: What major sponsorships are coming up in the next few months in the Americas, MENA and Asia? RA: The Johnnie Walker sponsorship of Team McLaren Mercedes remains the key opportunity for us. It is a truly outstanding sponsorship that is working extremely well for the brand and we will certainly activate the

ADF: Can you tell me what Diageo has planned for the rest of the year in terms of targeting the female traveler in duty free? RA: The female opportunity is huge. The largest growing economic force in the world isn’t China or India—it is women. Research suggests they are under-represented when it comes to global alcohol purchases. We will continue to market NUVO specifically at the female market, with activations custom-designed for this audience. In recent months Smirnoff Gold Collection has proved to be a key player in driving a higher footfall of female shoppers in duty free stores and we will develop further limited edition flavors for Baileys which have proved a huge hit with women. As well as focusing innovation at the female shopper, we are seeking to ensure that our activations can really engage with them. Bali Airport, for instance, was one of the first in the world to really target female shoppers with a fantastic three-month concourse activation in a prominent location and with high-traffic visibility. This involved a fun and highly engaging experience centered on a pop-up cocktail bar. Making it a great environment for women to enjoy, they introduced a range of Diageo spirits (Johnnie Walker Gold Label Reserve, Baileys, Cîroc, Smirnoff and Tanqueray) through bespoke cocktails and gave shoppers the chance to create their own cocktails. Given the growth potential of the market, Cîroc Peach; the we have also taken other bold steps with, for ultra premium vodka brand is just one of instance, Johnnie Walker. In a ground-breakthe many spirits in ing moment for both Johnnie Walker and Diageo’s portfolio that is enjoyed by Lebanon, the acclaimed Lebanese film maker the all-important Nadine Labaki was announced as the brand’s female traveler first female giant at the end of 2011. Nadine’s involvement in “Walk with Giants” marked the first time that Johnnie Walker had ventured off the traditional path of male ambassadors and opened the door to women in Lebanon, inspiring them to push continuously forward. The campaign was a stunning success that resulted in a 49% increase in female participation in Lebanon. ADF: Finally, how do you feel your previous experience will help you in this new position? Can you tell us a bit about your objectives for the rest of the year? RA: I am no stranger to GTME, having been Regional Director for the Middle East and North Africa and more recently running the Indian market, which gave me a great deal of experience, particularly with consumers new to our brands. In GTME one of the things we can achieve through our innovative offerings is to provide global visibility for our brands and drive consumer recruitment for them. GTME is a channel full of amazing opportunities with emerging markets and new consumers. Our aim is to grow our business and our customers’ businesses, not just this year but in succeeding years, and I believe we are well positioned to achieve our goals. We have a very strong pipeline of innovations which will continue to underpin our growth strategy. Our relationships with our customers are of vital importance to us and I am passionate about improving our collaborations to deliver real commercial value to them and c ourselves. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Orbis Aged World Whiskey

An international brand

Orbis is made of the finest aged whiskies—some 15 or 16 years old—from Scotland, Ireland, America, Canada and Japan

After recognition from Ian Buxton and some noteworthy North American listings, Orbis World Whiskey is ready to tackle its target market of Asia duty free BY RYAN WHITE

rbis Aged World Whiskey, distributed in Asia by L&L SAS, has had a good year so far. Not only was it named one of the 101 whiskies to “try before you die” by acclaimed whisky writer and aficionado Ian Buxton, but the unique blend was also this year listed at US/Canada border stores. In the lead-up to Cannes, Orbis’ European distributor World of Patria International (WOPI) included the brand in its Isignis Collection, a moniker designed to bring together under one umbrella all of the highly rated and exceptional quality spirits in the WOPI portfolio. Marketing Manager at St. James Distillery Janet Murphy tells Asia Duty Free that these recent developments are great news as the brand continues to concentrate on the whiskey-driven Asia market.

Different is good Nearly every new travel retail product, whether in the spirits category or otherwise, is generally touted as unique or groundbreaking for one reason or another. With Orbis, however, the one-of-a-kind claim made by St. James Distillery is actually right on the money. True, there are plenty of blends out there to choose from, but Orbis is the only “global blend.” Orbis is made of the finest aged whiskies— some 15 or 16 years old—from Scotland, Ireland, America, Canada and Japan, which are then blended in small batches before being put into hand-numbered bottles. “As a world blend, Orbis offers something unique for the traveling consumer in a category where demand for niche brands 84

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

is growing,” says Murphy. “It’s already appealing not only to existing whiskey lovers but also attracting new drinkers and, with its elegant packaging, it’s ideal for gifting.” Given that Orbis is a blend of whiskies unlike any other in the world, there’s no doubt that whiskey aficionados—always exalting quality, craftsmanship and uniqueness as the holy trinity that comprises a good dram—will be drawn to the brand. Case in point: whiskey writer Ian Buxton. Buxton’s first edition of 101 Whiskies to Try Before You Die has been the UK’s bestselling whisky book for the past two years and is now available in English and modern Chinese with traditional Chinese and French versions set to follow. Orbis is included in the new version of the book, described by Buxton as “an accessible and appealing whisky that will probably mix well.” The tasting notes call it “smooth and rounded, with a honey sweetness.” Buxton says the taste is “rich and warming,” with notes of “dried fruits and Christmas cake” and a finish that “lingers nicely” with “some smoky hints develop[ing] towards the end.” Of course, from a travel retail perspective, the nod from Buxton—while no doubt appreciated—will only translate to sales if Orbis is securing listings. Luckily, the Great White North has never been a country to pass up a good whiskey, especially considering

Canadian whiskey comprises one-fifth of the Orbis blend.

Securing new listings Earlier this year WOPI announced a major breakthrough into the North American market with listings for Orbis and the Wemyss 12 Year Old Vatted Malt Whisky range through various Canadian/US border crossing outlets. Retail outlets that ordered Orbis and Wemyss were Niagara Duty Free Hors Taxes, Queenston/Lewiston Duty Free, Peace Bridge Duty Free, The Ambassador Duty Free Store, 1,000 Island Duty Free, Johnstown Duty Free and Blue Water Bridge Duty Free Shop. This follows WOPI’s appointment of the Borders Duty Free Agency as its representative in Canada earlier this year and approval for listings by the LCBO. “This is fantastic news for Orbis Aged World Whiskey and we’re delighted,” said Murphy. “It’s the first of Orbis’ home countries to list the brand—there is Canadian whiskey in the makeup of the brand—so it’s really significant for us. The market shows volume increases across duty free/travel retail in blended scotch in India, Singapore, South Korea, Taiwan and Thailand and other whiskies such as American, Canadian and Irish all show positive growth. Orbis is perc fect for this growing demand.”

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Asia-2012-October-v11 9/30/12 4:13 PM Page 86

Pernod Ricard

NEXT-LEVEL PRESTIGE of Boucheron’s key codes. Adding the final touch is a white gold seal and a white gold lid crowned with a lapis-lazuli stone, inspired by the cabochon, another distinctive code of Boucheron. The Ultimate Jewel is presented in a specially designed box, using Martell’s distinctive color blue and with a beautiful BY RYAN WHITE ivory veal skin leather interior. Making this a true collector’s item, a centenary metal plate marking the occasion is concealed in a drawer at the base of the box. Additionally, the Martell XO Architect Edition by Christian de Portzamparc debuted in Hong Kong International Airport last month, marking the first time an Architect Edition will be released in travel retail. Designed by one of the world’s greatest Director for Pernod architects to pay tribute to the precious Ricard Asia Travel amber liquid of Martell XO, the contemRetail. “Whisky is a big porary piece will also be available in Macau volume category but even and Taiwan Taoyuan Airport duty free stores more important by value in December 2012 for the key gifting season, because of the size of the and in Kuala Lumpur International Airport more premium segments. duty free stores from April to May 2013. The limited edition continues previous “Cognac has shown very strong growth over partnerships between Martell and major archithe past number of years, tects aimed at creating innovative packaging especially at the top end, and bottles to provide a unique Cognac drinkand this makes it another ing experience. The Martell XO Architect Edivery important category,” tion by Christian de Portzamparc includes a he continues. “With Martell we are active in striking gift case that beautifully captures the this segment with new launches to drive value light and uses the cognac’s distinct mahogany sheens to create a diffused glow; transformthrough innovation.” The bottle’s craftsmanship is the epit- ing the case into a delicate architectural mateome of French elegance. The Martell swal- rial which envelopes the bottle in subtle opaclow is represented in gold with a diamond ity. Heightening its exclusivity, only 2,550 bottles will be available in Asia duty free. “In addition to looking within the wine and spirits category for activations and launches, we have to look at what other premium brands are doing John O’Sullivan, Marketing beyond our indusManager, Pernod Ricard Asia Travel Retail try,” O’Sullivan explained. “We coneye and complemented by the cognac house’s sider Martell and Royal Salute, for example, name above the centenary visual code: the to be first and foremost prestige brands, and infinity sign which also represents the fig- our behavior needs to mirror that. These ure 100. The bottle’s neck highlights the two new Martell innovations are characterc gold sculpture work through the godron, one istic of this.”

Asia Duty Free speaks with Pernod Ricard Asia Marketing Manager John O’Sullivan on Martell and the release of The Ultimate Jewel and the Architect Edition

On its tour of Asia, The Ultimate Jewel was displayed in the Martell Experience boutiques in September at HKIA and in October at Kuala Lumpur

o celebrate Martell Cordon Bleu’s one hundredth anniversary Martell turned to fellow Comité Colbert member the House of Boucheron to make a one-off piece of the The Martell XO Architect Edition iconic cognac bottle. The by Christian de result is a single unique Portzamparc debuted in Hong bottle, called The UltiKong International Airport last month mate Jewel, which captures both houses’ passion for transforming the finest and rarest of raw materials into either exquisite blends or beautiful, timeless jewelry. On its tour of Asia duty free, The Ultimate Jewel was displayed in the Martell Experience boutiques in September at Hong Kong International Airport and October at Kuala Lumpur International Airport, as well as in Singapore Changi Airport’s Duty Free Store from November 1 to 15. Martell brand attachés will greet potential buyers and give travelers the rare chance to view the masterpiece; a once in a lifetime opportunity for loyal Martell customers and cognac connoisseurs. Collectors, as well as Martell’s most loyal consumers, will have the opportunity to purchase The Ultimate Jewel during an auction event. Expected to fetch in excess of €100,000 (US$129,000), the original piece will be auctioned at the end of the year to mark the culmination of Martell Cordon Bleu’s centenary celebration. “Whisky and Cognac are key categories for us,” says John O’Sullivan, Marketing 86

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

“We consider Martell and Royal Salute, for example, to be first and foremost prestige brands, and our behavior needs to mirror that.”

Asia-2012-October-v11 9/30/12 4:13 PM Page 87

Diageo GTME

Liquor Report: Standout Spirits

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Just in time for TFWA AP in Singapore, Diageo releases two new expression in the iconic Johnnie Walker range of blended Scotch whiskies BY RYAN WHITE

iageo recently announced that two new expressions of its iconic blended Scotch whisky Johnnie Walker will be available in travel retail. The firstâ&#x20AC;&#x201D;a global travel retail exclusiveâ&#x20AC;&#x201D;gives one of the brandâ&#x20AC;&#x2122;s legendary expressions a new woody, smoky twist, while the secondâ&#x20AC;&#x201D;inspired by the Walker family tradition of creating exclusive â&#x20AC;&#x153;privateâ&#x20AC;? blendsâ&#x20AC;&#x201D;offers consumers a strong, sweet and elegant spirit crafted in traditional Speyside style.

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iddle Eastern travelers are known for their love of whisky, and International Beverage Holdings (Interbev) is breathing new life into some promising brands with package redesigns and special editions that were introduced at this yearâ&#x20AC;&#x2122;s TFWA WE in Cannes in September. The standout Old Pulteney single malt whisky and Hankey Bannister blended Scotch whisky have been boldly redesigned. In addition, a special two-pack of Hankey Bannister Original and 12 Year Old was recently introduced and has been performing well in the Middle East. Old Pulteney, which is one of the fastest growing malts in the industry, has revealed a vibrant new design with a bolder logo to drive a premium message and improve retail

vored blended Scotch whisky that has rich woody notes, deep smoke, traces of spice and a long, lingering oak finish.â&#x20AC;? Produced in limited quantities and blended in small batches, the bold blend is a contemporary expression of the powerful 19th century character pioneered by the Walker family, created for true connoisseurs who are seeking new depths of flavor. Steve White, Marketing Director, Diageo GTME, said: â&#x20AC;&#x153;Johnnie Walker Blue Label â&#x20AC;&#x201C; The Casks Edition is a Scotch whisky with a remarkably powerful flavor, the result of almost two centuries of unbroken blending expertise. This limited edition release is a rare opportunity to enjoy a bold amplification of the powerful cask flavors contained in Johnnie Walker Blue Labelâ&#x20AC;&#x201D;it is rarity redefined.â&#x20AC;?

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Diageoâ&#x20AC;&#x2122;s second new addition to the Johnnie Walker range is Johnnie Walker Platinum Label. Inspired by the Walker familyâ&#x20AC;&#x2122;s historic tradition of creating exclusive â&#x20AC;&#x153;private blendsâ&#x20AC;? for favored customers, directors of the company and select private gatherings, Johnnie Walker Platinum Label has been crafted by Jim Beveridge â&#x20AC;&#x153;for todayâ&#x20AC;&#x2122;s increasingly sophisticated global consumersâ&#x20AC;&#x201D;the â&#x20AC;&#x2DC;new whisky setâ&#x20AC;&#x2122;â&#x20AC;&#x201D;to enjoy at their own intimate gatherings,â&#x20AC;? says Diageo. It is a delicate, smoky blend that embodies the characteristic full flavors of the Johnnie Walker range of blended Scotch whiskies. Jim Beveridge explains: â&#x20AC;&#x153;Like the rare and precious metal after which it is named, Johnnie Walker Platinum Label is rich and refined, delivering the distinctive depth and complexity that is synonymous with Johnnie Walker. In fact, I believe that if John Walker were to create a whisky today, Johnnie Walker Platinum Label would be the result. It is a bold, intense and smooth blend, crafted from some of our most treasured whiskies, for the evolving tastes of 92

todayâ&#x20AC;&#x2122;s global whisky consumer.â&#x20AC;? â&#x20AC;&#x153;Johnnie Walker Platinum Label is the richest, most precious crafted 18 year old blended Scotch whisky John Walker & Sons has ever createdâ&#x20AC;&#x201D;its price point reflects this,â&#x20AC;? says Steve White. â&#x20AC;&#x153;We believe that consumers will quickly develop a real affinity for Johnnie Walker Platinum Label and that it will offer real value for our trade partners. â&#x20AC;&#x153;It is a thoroughly modern interpretation of the â&#x20AC;&#x2DC;private blendsâ&#x20AC;&#x2122; that our company has produced from the very beginning and is a contemporary blended Scotch whisky that is perfect for exclusive occasions,â&#x20AC;? he added. Johnnie Walker Platinum Label is available now in 75cl size in limited Asian Duty Free locations with a global Duty Free launch of the 1L variant from June 2012. Priced at an RRP of USD $100 for 1 liter in duty free, Johnnie Walker Platinum Label is a premium whisky that will sit towards the top end of the Johnnie Walker range.

onsumer preferences arenâ&#x20AC;&#x2122;t static, and thankfully for globetrotters the travel retail industry is especially good at staying ahead of trends and treating duty free shoppers to new and exciting experiences. Gulf-Africa Duty Free recently spoke with International Beverage Holdings, Bacardi Global Travel Retail and Brown-Forman about how theyâ&#x20AC;&#x2122;re going about pleasing discerning spirits lovers in the Middle East. Among the latest developments from these suppliers are new liveries for two iconic whisky brands, the introduction of a new spiced rum with a big heart and a collaboration between two American legends.

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A new limited edition release of the worldâ&#x20AC;&#x2122;s leading blended Scotch whisky will be released exclusively in global travel retail: Johnnie Walker Blue Label â&#x20AC;&#x201C; The Casks Edition. Crafted from some of Diageoâ&#x20AC;&#x2122;s rarest casks, each noted for their intensity and depth of flavor, this special edition, bottled at 55.8% ABV, has intensified wood flavors and â&#x20AC;&#x153;is a tribute to the perfect harmony of the oak casks used in the blending of Johnnie Walker Blue Label,â&#x20AC;? says Diageo. Johnnie Walker Master Blender Jim Beveridge says: â&#x20AC;&#x153;This limited edition is a chance to enjoy the remarkable experience of Johnnie Walker Blue Label in a new way. Only one in ten thousand of our casks have sufficient character for Johnnie Walker Blue Label and in creating this special edition we really wanted to showcase the incredible flavors that come from the casks themselves. The flavors drawn from these carefully selected casks have intensified to produce a robust and powerfully fla-

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display while at the same time retaining Old Pulteneyâ&#x20AC;&#x2122;s distinctive bottle shape and â&#x20AC;&#x153;Maritime Maltâ&#x20AC;? positioning. â&#x20AC;&#x153;Old Pulteney is distilled in Wick, Scotland,â&#x20AC;? says James Bateman, Global Travel Retail Manager at Interbev. â&#x20AC;&#x153;In fact, there are no other Scotch whisky distilleries there, so weâ&#x20AC;&#x2122;ve communicated Old Pulteneyâ&#x20AC;&#x2122;s unique origins on the bottle. Weâ&#x20AC;&#x2122;ve also taken the boat and put it to the back so that it can be seen through the front of the bottle. These changes, combined with the redesign of the words â&#x20AC;&#x2DC;Old Pulteney,â&#x20AC;&#x2122; have resulted in much more shelf standout.â&#x20AC;? Hankey Bannister blended Scotch whisky has unveiled a striking, super-premium presentation pack of its 21 year old â&#x20AC;&#x153;Partnerâ&#x20AC;&#x2122;s Reserveâ&#x20AC;? that features an elegant black box, proprietary bottle and gold embossed label. The new limited edition Hankey Bannister 25 year old â&#x20AC;&#x153;Partnership Blendâ&#x20AC;? was also previewed in Cannes. It comes beautifully encased in a Lochinver decanter and luxurious bordeaux-red presentation box. This new expression has been specially selected by Master Blender Stuart Harvey using the very finest non-peated single malts, resulting in a distinctively delicate and smooth flavor. Interbev is banking on increased traction in Asia duty free with the above super-premium Hankey Bannister offerings. Bateman told Gulf-Africa Duty Free that in the Middle East,

Hankey Bannister Original and 12 Year Old expressions are very popular, particularly with Indian travelers. â&#x20AC;&#x153;For the Gulf weâ&#x20AC;&#x2122;ve introduced a gift pack featuring two one-liter bottlesâ&#x20AC;&#x201D;Hankey Bannister Original and 12 Year Old,â&#x20AC;? Bateman explains. â&#x20AC;&#x153;It offers a savings to shoppers and has already been launched in airports in Dubai and Sharjah to great effect. â&#x20AC;&#x153;Duty free is a great channel for us to generate awareness of these brands,â&#x20AC;? Bateman continues. â&#x20AC;&#x153;Hankey Bannister is a very regional brand that is popular in India. As such, itâ&#x20AC;&#x2122;s also popular with Indians living and working in Dubai, which helps us develop in the Middle East.â&#x20AC;? Old Pulteney has revealed a vibrant new design with a bolder logo to drive a premium message and improve retail display

ASIA DUTY FREE & TRAVEL RETAILING TFW A AP MAY 2012

Pernod Ricard Asia Duty Free

Asian travelers are known for having a keen eye for luxury offerings and brown spirits, and Pernod Ricard caters to both tastes with a wide range of new releases BY RYAN WHITE sia Duty Free recently sat down with John Oâ&#x20AC;&#x2122;Sullivan, Marketing Director at Pernod Ricard Asia Duty Free, to discuss the numerous new launches in the region that coincide with the TFWA AP exhibition in Singapore. We also took the opportunity to ask him about business in general in the region and get an update on last yearâ&#x20AC;&#x2122;s big news during the exhibition, the Martell Experience Boutique.

Adding excitement to duty free Absolut Watkins, a limited edition exclusive to travel retail, was launched to the Asian market at Changi Airport in February 2011 and was then rolled out in Hong Kong, Thailand, Malaysia and Korea throughout March. Absolut Watkins offers the distinct qualities of freshly ground coffee with notes of

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almond, caramel and warm chili. The detailed image on the limited edition bottle is created by celebrated Swedish fashion illustrator and artist Liselotte Watkins, famous for her designs for fashion brands such as Miu Miu, Anna Sui and Barneyâ&#x20AC;&#x2122;s, as well as for magazines such as Vogue and The New Yorker. In addition, Pernod Ricard Travel Retail launched its limited edition Chivas Regal 18 Year Old by Christian Lacroix in key Asian airports in March to showcase the new masterpiece and bring to life the brand values of luxury, craftsmanship and excellence. Only 3,000 bottles of this striking limited edition design were produced, of which a select number will be sold in Asia duty free. The activity kicked off at Hong Kong International Airport and Singapore Changi Airport where elaborate displays were positioned in high traffic locations to generate impact. The product was rolled out in April to Incheon International Airport and Kuala Lumpur International Airport. Also early this year, Royal Salute 62 Gun Salute was rolled out in Asia at Hong Kong International Airport, Taiwan Taoyuan Airport, Singapore Changi Airport and Korea Incheon Airport. The product was positioned on premium display units in the first class and business lounges of Korean Air. â&#x20AC;&#x153;Innovation is a key driver for Pernod Ricard and we have had some very successful recent launches,â&#x20AC;? says Oâ&#x20AC;&#x2122;Sullivan. â&#x20AC;&#x153;As many have come to expect, Absolut has led the way with Glimmer and the travel retail exclusive Absolut Watkins. â&#x20AC;&#x153;The Chivas 18 Year Old by Christian Lacroix, the latest release in the Chivas 18 designer series, was a huge success,â&#x20AC;? he continues. â&#x20AC;&#x153;The product is very limited and will only be in store for a short time before it is sold out. Probably the most high profile launch we had this year was for Royal Salute 62 Gun Salute, which was supported with luxurious

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displays in key airports.â&#x20AC;?

Luxury leanings At this time last year, the Martell Experience Boutique concept at HKIA and Kuala Lumpurâ&#x20AC;&#x201D;designed to showcase Martellâ&#x20AC;&#x2122;s unique combination of traditional, cultural and modern attributesâ&#x20AC;&#x201D;was making headlines for its high-end, educational offering. Oâ&#x20AC;&#x2122;Sullivan tells Asia Duty Free that over the last year Pernod Ricardâ&#x20AC;&#x2122;s expectations have been exceeded, both in terms of sales and making quality connections with travelers. â&#x20AC;&#x153;Selling was never a primary objective for the Martell Experience Boutique as this is the role of main duty free shops in the airports,â&#x20AC;? he explains. â&#x20AC;&#x153;Having said that, we have had some good sales, mainly to Chinese and Malaysian travelers. More importantly from a sales perspective our overall performance in Hong Kong and Kuala Lumpur International Airports has been very positive since the boutiques opened. The growth has been driven by our Prestige range, which consists of Martell Cordon Bleu, Martell XO, Martell Creation and Lâ&#x20AC;&#x2122;Or de Jean Martell.â&#x20AC;? Given the popularity of both brown spirits and luxury offerings in Asia, Pernod Ricard is certainly in a good position going into the second half of the year with brands such as Chivas Regal, Royal Salute, Ballantineâ&#x20AC;&#x2122;s, The Glenlivet, Jameson and Martell. Oâ&#x20AC;&#x2122;Sullivan asserts that outside this subcategory, vodka continues to show growth on a smaller scale, and Pernod couldnâ&#x20AC;&#x2122;t be happier with the innovations coming from the team at The Absolut Company. â&#x20AC;&#x153;All of these brands appeal to Asian customers because they are leading brands, if not the leading brands, in the categories,â&#x20AC;? Oâ&#x20AC;&#x2122;Sullivan concludes. â&#x20AC;&#x153;They are also all premium brands, most of which fall into the super premium and above categories, which is important to the Asian customer.â&#x20AC;?

The growing luxury market in Asia means thereâ&#x20AC;&#x2122;s more growth ahead for Pernod Ricard in the region BY ANDREW BROOKS

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ASIA DUTY FREE & TRAVEL RETAILING TFW A AP MAY 2011

Promotions, messaging and experience keep these whisky leaders on top in a rising market ANDREW BROOKS

The â&#x20AC;&#x153;Dewarâ&#x20AC;&#x2122;s World of Discoveryâ&#x20AC;? promotion

â&#x20AC;&#x153;T

he Middle East continues to be an important market for Dewar's Scotch Whisky,â&#x20AC;? says Vinay Golikeri, Marketing Director for the Bacardi Global Travel Retail Division. The growth in the Middle East reflects a similar experience in Asia. Bacardi Global Travel Retail has employed strategic brand promotions to strengthen relationships with existing Dewarâ&#x20AC;&#x2122;s customers and create new ones, in the process helping to foster brand loyalty, Golikeri says. In June, Bacardi Global Travel Retail announced a partnership between Dewarâ&#x20AC;&#x2122;s and the internationally renowned National Geographic Society. The new promotion, called â&#x20AC;&#x153;Dewarâ&#x20AC;&#x2122;s World of Discovery,â&#x20AC;? gives entrants in a prize draw the chance to win six travel experiences created by National Geographic Expeditions: Costa Rica; a New York photography trip; an insiderâ&#x20AC;&#x2122;s tour of Italy; the Amazon; New Zealand; and the home of Dewarâ&#x20AC;&#x2122;s, the Highlands of Scotland. Depending on the market, entry may require the purchase of Dewarâ&#x20AC;&#x2122;s 12 Years Old. Part of Bacardi Global Travel Retailâ&#x20AC;&#x2122;s strategy to grow Dewarâ&#x20AC;&#x2122;s in the Middle East saw the launch last year of a training program with Dubai Duty Free, Middle East Airlines and Beirut Duty Free. Conducted once or twice

help us to tell the brand story and increase interest.â&#x20AC;? New launches are an important vehicle for creating excitement in the duty free channel and Pernod Ricard has released a number of new products in the past 12 months. Absolut has always been an active brand and its latest release was Absolut Mode, the fashion-themed bottling. Chivas is another brand that is regularly innovating and this is particularly evident with the Chivas 18 series of designer bottle releases. The latest was based on the work of British fashion designer Vivienne Westwood. Previous releases have been developed with fashion designers Christian Lacroix and Alexander McQueen. Other recent launches from Pernod Ricard include the Master Distillerâ&#x20AC;&#x2122;s Reserve expression of The Glenlivet, exclusive to travel retail, which was particularly visible recently in Taiwan and Hong Kong. And cognac brand Martell has recently benefited from the Centenary Edition of Martell Cordon Bleu with special packaging and, more recently, Chanteloup Perspective in the Extra category, named after the home of Martell. Significantly, the travel retail team collaborated with the domestic side to launch Glenburgie Edition, a 17-year-old limited edition Ballantineâ&#x20AC;&#x2122;s celebrating one of four signature Ballantineâ&#x20AC;&#x2122;s distilleries. The launch was initially focused on Korea, and response was â&#x20AC;&#x153;outstanding,â&#x20AC;? Oâ&#x20AC;&#x2122;Sullivan says, with a high proportion of the travel retail allocation flying off the shelves in the first days. Oâ&#x20AC;&#x2122;Sullivan also notes the recent launch of a single Martell eau de vie in the two dedicated Martell Experience boutique airport shops in Hong Kong and Kuala Lumpur. Titled â&#x20AC;&#x153;MillĂŠsimes,â&#x20AC;? the very exclu sive launch came out in December.

ASIA DUTY FREE & TRAVEL RETAILING TFW A AP MAY 2012

Whisky Report

The Dewarâ&#x20AC;&#x2122;s brand has seen great success in the Middle East, largely as a result of creative promotional activity from brandowner Bacardi

a year with these organizations, the sessions are hosted by the Dewarâ&#x20AC;&#x2122;s Global Ambassador and consist of a tutorial on Scotch whisky production as well as a Dewarâ&#x20AC;&#x2122;s comparison tasting. â&#x20AC;&#x153;Training provides Dewarâ&#x20AC;&#x2122;s with a unique opportunity to create brand advocates in each of its core markets,â&#x20AC;? Golikeri says. â&#x20AC;&#x153;As the Scotch market continues to grow in the Middle East, we want to ensure that our key partners are equipped with the tools and information they need to help drive sales in their outlets.â&#x20AC;? â&#x20AC;&#x153;Of our brands there is one standout product across the Gulf and Africa as a wider region: Hankey Bannister Blended Scotch whisky,â&#x20AC;? says James Bateman, Global Travel Retail Manager for International Beverage Holdings (Interbev). Batemanâ&#x20AC;&#x2122;s focus right now is on improving the productâ&#x20AC;&#x2122;s distribution and visual displays. He says that premium expressions will be introduced, and the process is already underway with the launch this year of a new Hankey Bannister expression, 12 Years Old Regency. This product constitutes an entry into the premium blended Scotch category and retails for about US$25 for 100cl. Bateman says that Interbev will aim to launch the Hankey Bannister 21 YO and 25 YO super-deluxe blends at Cannes this year. New twin packs (2 X 100cl) specifically for travel retail will also be premiered.

The majority of duty free consumers of Hankey Bannister in the Gulf are residents originally from the Indian subcontinent, Bateman says. In terms of the travel retail trade, the main buyers in the Gulf are Dubai Duty Free, Dufry at Sharjah and Aer Rianta Internationalâ&#x20AC;&#x2122;s regional network. Africa is a complex picture, but Bateman says Gebr Heinemann, Dufry and Flemingo are important network partners.â&#x20AC;&#x153;Egyptian airports are very important, and will be again once the tourists return in confidence. Big Five Duty Free in South Africa and Mauritius Duty Free are very important retailers of our products, and the expansion of Flemingo Duty Free has made it a real retail force on the continent.â&#x20AC;? The new travel retail display for Hankey Bannister In addition to Hankey Bannister, which has been available in the Gulf and parts of Africa for many years, in the last few years single malt Scotch has been developing a presence with retailers that want to build the category, for example Qatar Duty Free and Muscat Duty Free. â&#x20AC;&#x153;The development potential for our portfolio in Sub-Saharan Africa is also of great interest,â&#x20AC;? Bateman adds. 2011 so far has been very good, Bateman says. At press time, Interbev received some very welcome news that certainly wonâ&#x20AC;&#x2122;t hurt its global presence. The company carried off no fewer than 16 awards at the 2011

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/ OCTOBER 2011

The Whisky Supplement is designed as the most comprehensive whisky source for the travel retail industry in Asia Pacific. With indepth reports on the biggest brands and up-and-comers alike, as well as unparalleled coverage on innovation and trends, there is no doubt that the Whisky Supplement will provide both buyers and suppliers with an inside perspective on the iconic spirit. Editorial Highlights: â&#x20AC;˘ Feature Report on Asian retailers and top selling whiskies â&#x20AC;˘ Trend Report: An in-depth overview of the year ahead in the whisky category â&#x20AC;˘ Whisky News: Whatâ&#x20AC;&#x2122;s new and noteworthy â&#x20AC;˘ Tasting Notes: All the seasons must haves from some of the top whisky brands â&#x20AC;˘ Company Profiles: Highlighting the industryâ&#x20AC;&#x2122;s heavy hitters

W E N

South Africa is a standout market for Jameson Irish Whiskey

International Wine & Spirits Competition. Hankey Bannister was well represented with four awards, including a Gold for Hankey Bannister 40 YO. The brands represented by the Edrington Group are well liked in the Middle East and North Africa, says Keith Bonnington, Area Director, Africa and Middle East. However, the leading brand is Johnnie Walker, although Bonnington says the evidence points to future growth in the deluxe rangeâ&#x20AC;&#x201D;Black Label and above. â&#x20AC;&#x153;Many of the major Scotch brandsâ&#x20AC;&#x201D; including Johnnie Walker and Chivas, which together hold around 60% Scotch volume shareâ&#x20AC;&#x201D;suffered significant volume losses in 2009 and into 2010,â&#x20AC;? he says. Other categories, such as vodka and cognac, also suffered. â&#x20AC;&#x153;The Edrington Group portfolio on the other hand performed very well with The Famous Grouse and The Macallan dining at the top table in their respective categories.â&#x20AC;? The market has been buoyed by a more stable economic outlook after a tough 2010, Bonnington believes. Generally, travelers are returning, and one indication Bonnington takes some comfort in is the recent announcement that Dubai Duty Free has exceeded last yearâ&#x20AC;&#x2122;s growth by 16%. Standard Scotch remains the volume leader, driven by its traditional blue-collar customer base, largely from the Indian subcontinent. A decline in this category over the past year could be a result of the sudden and dramatic shutdown of construction in the region following the global slump, Bonnington believes. The other backbone demographic shopping at the super-premium level is likely to be Asian or Russian and favors destinations such as Dubai and Abu Dhabi for business and leisure travel. â&#x20AC;&#x153;Our portfolio has shown stunning growth in recent years,â&#x20AC;? Bonnington says. The Famous Grouse family, which now includes Black Grouse and Snow Grouse, is number three in terms of total blended Scotch volumes, with a 6.5% market share. The Macallan, meanwhile, commands fully 15% of the malt Scotch category. Bonnington 80

SPIRIT

S P E CI A L RE P OR T: WHISKY

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Premium prospects ernod Ricard Asia Duty Free (PRADF) is a leader in the Asian travel retail and duty free market. While it covers the full range of channels in the duty free market, airports are definitely the main focus of activity, says John Oâ&#x20AC;&#x2122;Sullivan, Marketing Director, Pernod Ricard Asia Duty Free. As air travel is especially strong in Asia these daysâ&#x20AC;&#x201D;and growingâ&#x20AC;&#x201D; 2011 was a good year, Oâ&#x20AC;&#x2122;Sullivan says, with the business rebounding quite well from the lows of the 2008-2009 economic crisis. According to the research that Oâ&#x20AC;&#x2122;Sullivan and his team have access to, the Asia travel retail market is actually growing at a rate that puts it ahead of global trends in terms of passenger numbers, but also by volume and in terms of the value of the travel retail business overall. Asia presents quite a complex and varied mix when it comes to the combination of nationality profiles and preferences. Itâ&#x20AC;&#x2122;s even more complicated when you factor in the amount of intraregional travel done by passengers of different nationalities. Koreans favor aged whisky, which puts Pernod Ricard in the sweet spot, with premium brands like Ballantineâ&#x20AC;&#x2122;s, Chivas Regal and Royal Salute. The big emerging market in Asia is of course China, and with Chinese passengers traveling more and more throughout the region, the Chinese buyerâ&#x20AC;&#x2122;s preference for premium brands represents a real opportunity for Asian travel retail. Here, Oâ&#x20AC;&#x2122;Sullivan says, whisky and cognac are among the keys to success. In addition to the whiskies mentioned earlier, the Martell cognac marque in particular is a leading brand for the Chinese consumer. Shopping is an important part of the travel experience for Chinese travelers, Oâ&#x20AC;&#x2122;Sullivan says. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re brand-consciousâ&#x20AC;&#x201D;a luxury consumer category is developing. Our presence is strong and our brands are well recognized, so weâ&#x20AC;&#x2122;re in a good position. Itâ&#x20AC;&#x2122;s a matter of making sure that when Chinese passengers travel elsewhere in Asia, we engage them at strategic airports like Hong Kong, Macau, Singapore and so on.â&#x20AC;? Promotions play a double role. Of course they bring in added sales, but they also play an important part in boosting brand profile. â&#x20AC;&#x153;We work both levels with special packaging, limited editions, new launches, exclusive products,â&#x20AC;? Oâ&#x20AC;&#x2122;Sullivan says. â&#x20AC;&#x153;All of these

SUCCESSFUL New for 2013, presents an exclusive Whisky Supplement that will have bonus distribution at the 2013 TFWA WE exhibition in Cannes. Whisky is the spirit to watch in duty free given its wide popularity with high-spending travelers like the Chinese and the emerging Indian middle class.

The new presentation of Hankey Bannister 21 year old â&#x20AC;&#x153;Partnerâ&#x20AC;&#x2122;s Reserveâ&#x20AC;? features an elegant black box, proprietary bottle and gold embossed label

Company News: Pernod Ricard

THE

notes the brandâ&#x20AC;&#x2122;s huge franchise in Asia, Russia and the US. â&#x20AC;&#x153;In the next few years I believe consumers will see some very exciting developments across our malt whisky range,â&#x20AC;? Bonnington says. In particular, The Macallan will see the introduction of new super-premium concepts. At Cannes, Edrington Group will focus heavily on its super premium offerings, with the presentation of the latest Macallan in Lalique decanter and attention on reinforcing the travel retail exclusive 1824 range, Bonnington says. â&#x20AC;&#x153;We also have some interesting developments in The Famous Grouse,â&#x20AC;? he says. â&#x20AC;&#x153;And Cutty Sark is waiting in the wings.â&#x20AC;? Bonnington considers the latter a â&#x20AC;&#x153;sleeping giant,â&#x20AC;? destined to become a key player once again. â&#x20AC;&#x153;The key message from us is that 2010 was a â&#x20AC;&#x2DC;signatureâ&#x20AC;&#x2122; year for Jameson,â&#x20AC;? says Donagh McHenry, Regional Director Asia Pacific, Travel Retail and Africa/ME. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re up 16% in the calendar year, and we broke the 3 million case threshold. Thatâ&#x20AC;&#x2122;s overall, but thereâ&#x20AC;&#x2122;s the same momentum in duty freeâ&#x20AC;&#x201D; weâ&#x20AC;&#x2122;re up 14% there.â&#x20AC;? Within the Gulf-Africa catchment area, there are some markets that stand out for Jameson. South Africa is one such, McHenry says, with a high recognition level for the brand: sales into the domestic market totaled over 180,000 cases in 2010. On the duty free side, McHenry commends the ranging and distribution work done on Jameson, from Classic to Reserve, by Big Five Duty Free in Johannesburg and Cape Town. Jameson Signature Reserve, exclusive to travel retail, is also selling well in Big Five outlets. The consumer streams in South Africa are threefold: South Africans, international travelers and those traveling within

Africa. While South Africa is Jamesonâ&#x20AC;&#x2122;s standard bearer in Africaâ&#x20AC;&#x2122;s southern cone, McHenry sees signs that Angola and Mozambique are approaching critical mass in the region too. In the Middle East the strongest market is Israel with domestic strength reflected in healthy duty free presence and sales. Lebanon is now benefiting from initial marketing and promotions. Other emerging markets recently showing potential for Jameson in the region are Egypt and Morocco. No one will be too surprised to hear that Dubai is the key Gulf market, posting a muscular 24% growth in 2010â&#x20AC;&#x201D;a trend driven by international travelers who play a significant role in Jameson's current global momentum. On Jameson promotional activity, â&#x20AC;&#x153;weâ&#x20AC;&#x2122;ll do new global promotions every 18 to 24 months or so, as a rule,â&#x20AC;? McHenry says, highlighting the recent â&#x20AC;&#x153;Experience Our Worldâ&#x20AC;? promotion, which has run globally from 2010 through mid 2011. On special editions for the Travel Retail channel, McHenry points to the Jameson St. Patrickâ&#x20AC;&#x2122;s Day limited edition bottle that was introduced in Europe this spring as a notable success. For Cannes, Jameson will be focusing on its successes in 2010 and its ongoing promotions, including some new promotional concepts and special editions that will hit in 2012. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re still working out the details,â&#x20AC;? McHenry says, â&#x20AC;&#x153;but weâ&#x20AC;&#x2122;ll have a bit more detail on those plans at Cannes.â&#x20AC;?

The core offerings in The Famous Grouse range (left) and The Macallan 1824

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/ OCTOBER 2011

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British American Tobacco

Exceeding expectations

British American Tobacco’s business in Asia is characterized by a concentration on innovation with the end goal of exceeding consumers’ needs BY RYAN WHITE

ritish American Tobacco has always been known for its innovative products, and this year the company has developed a number of new offerings that are sure to add some excitement to the category. New products from the supplier include Dunhill Special Reserve, Lucky Strike Year of the Dragon and State Express 555. “Good tobacco is in many ways like fine wine,” explains Justinus Nurman, Head of Global Travel Retail Asia Pacific at British American Tobacco. “For Dunhill Special Reserve, we chose the two best tobacco harvests from 2010. As such, this range is in very limited quantity. Nonetheless, we felt it was important to bring it to the Asia Pacific region.” The concentration for Nurman and British American Tobacco is to maintain a given brand’s identity while at the same time making sure new ideas are regularly being brought to the table. Dunhill Special Reserve is a good example of this. By giving consumers a new way to think about a brand they’re familiar with, British American Tobacco is effectively enhancing the smoking experience. But the innovation hasn’t stopped at the Dunhill brand. This past summer British American Tobacco Asia Pacific released the Lucky Strike Year of the Dragon collector’s edition to a very positive response. “In Asia

it’s very important to have special, limited edition products,” Nurman tells us. “Of course, given the popularity of Chinese New Year, it made perfect sense to celebrate it with a limited edition Lucky Strike pack.” We asked Nurman how much of a concentration China is for British American Tobacco, and he told us that while having a presence in travel retail within the country’s airports is important, it’s the well heeled Chinese traveler that is the real focus. “These days the Chinese are flying more and more, always looking for new premium and lim-

This past summer British American Tobacco Asia Pacific released the Lucky Strike Year of the Dragon collector’s edition to a very positive response

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

ited edition products,” he explained. “As such, it’s important for us to have a strong presence throughout Asia Pacific at the airports where the Chinese are traveling.” Of course, another consideration when catering to Asian consumers is tradition. British American Tobacco is currently planning the launch of State Express 555, a brand that certainly possesses its share of history. In 1896 Sir Albert Levy undertook the journey to the USA in pursuit of the finest tobaccos. He traveled from New York to Buffalo on the fastest train in the world at the time, the Empire State Express. It moved at 112.5 mph, an impressive clip in those days. Inspired by this train journey, Sir Levy registered the trademark brand State Express 555. He envisaged it as an authentic Virginia blend that sold on a reputation of the highest quality. In fact, Sir Levy insisted that the brand conBritish American tinued to be made by hand Tobacco’s until early 1930, long after goal with Dunhill most cigarettes had switched Special Reserve to machine manufacturing. was to With the new range of State maintain brand Express 555 premium tobacco identity while giving blends, British American consumers a new way Tobacco now seeks to draw to engage inspiration from Levy’s legacy with Dunhill of quality and authenticity. “We have taken great effort to choose the best Virginia tobacco and minutely detail all the elements of the mix to make it worthy of the brand’s heritage,” Nurman explains. The new flagship variant emulates the classic packaging and colors seen on the original packs back in 1896. It also carries Levy’s signature as a quality endorsement that showcases over 100 years of proud heritage. Nurman concluded by explaining that the many new developments at British American Tobacco are much more than simply innovation for innovation’s sake. Rather, the steps the company takes to continually offer something new across its wide ranging portfolio are rooted in the desire to see traveling consumers pleasantly surprised with novel offerings whenever they travel. “The increased sophistication of our consumers will see them looking for more to satisfy their needs,” Nurman says. “As an international player with a strong portfolio, we strive to meet and exceed these c expectations.”

Asia-2012-October-v11 9/30/12 4:13 PM Page 89

ESSENTIAL COMMUNICA UNICA ATTIONS TION

MEDIA MEDIA

kknowledge nowledg ge e CLIENT CL IENT understanding u nderrsstta anding Essential Communications is an independent Public Relations agency specialising in the travel retail and duty free industryy. Established for over ten years, our goal is to raise the proﬁle of the companies we represent in the international and regional media. At Essential Commun u ications, the client always come ﬁrst and we will bend over backwards to put together a proposal that meets your needs...and your budget. Flexibility is the name of our game, so if for a simple, straightforw ward press release program or an all singing, all dancing media you’re looking fo campaign, we’ll give you a no-nonsense solution to your needs. And..we do it with a smile.

“The support that we have received from Essential Communicatitions has ex exxcceede ded our expectations. Having sold successfully into travel reta re tail channel for many years, we enlisted Essential Communications in early 2010 to develop a focused travel retail PR campaign. Our existing customers are delighted and within weeks we gai a ned new customers as a direct result of our PR. We continue to be impressed with the depth th of knowledge and contacts that Essentitial Communications has been able to sha h re re wi with us.” Rebecca H arwood Lincoln, G lobal Trrav el Retail D irectorr, Polaroid P Ey ewear

“Scorpio Distributors appointed Essential Communications in 2006 as part rt of an upg pgra rade ded marketing strategy gy. They provide us with a friendly, efﬁcient, pro ro-a o-actitive ve serv rvviice and, cert rta tainly ly for Scorpio, represent excellent value for money.” Stua uart McG uire, G rroup Manag ing Stuart D irecto ctorr, Scorpio D istributors Ltd ‘Essential Communications has proved to be a vital part of the success and gro rowth of Counter intelligence Retail in the channel. Always quick to to re respond to our needs, the reach the company has provided us has ensured we we e’ve always had the right amount of exposure and th the most appropriate coverage at the right time’.

“Essential Communications has been instrumental in us achieving the hig th igher profile that we seek as we continue to build the business globally. The profile is essential to us in securi us ring th the confid fide dence of both new and existing cruiseline customers as well as the various constituent elements of the supply chain in all of the various territories in which we operate. From trade press to corporate profiles, from interviews with the main department heads to national assistance with our recruitment drive, Essential Communicatitions has been totally professional and innovative in its approach.” H arold G ittelmon, Manag ing D irector,r, H arding B roth ers Retail Ltd L

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Rowena Holland Essential Communications 110 Falconwood Road Croydon Surreyy, CR0 9BD, UK

Te el: 44 (0) 208 405 8109 Fax: 44 (0) 208 405 0330 Mob: 44 (0) 771 021 9784 lcommunications ns.org Email: row@essentialcommunications.org www w..essentialcommunications. s.org

Asia-2012-October-v11 9/30/12 4:13 PM Page 90

Tobacco News Ray Tobacco continues growing in travel retail Hong Kong-based Ray Tobacco has made some significant inroads in travel retail in recent months. As a result of exhibiting at this year’s IAADFS and TFWA AP exhibitions in Orlando and Singapore, respectively, new listings have come online and promising contacts have been made that bode well for the supplier’s future in the industry. A triple threat, offering two brands of cigarettes (Walton, called a “Royal Blend,” and Ray, an American Blend), as well as Walton-branded whisky and beer, Ray Ray Tobacco offers two brands Tobacco has seen particular success in Egypt recently, of cigarettes—Walton, pictured here, and Ray, an American with listings in some 50 points of sale—both airports Blend—as well as Waltonbranded whisky and beer and border stores—over the last few months. Other new travel retail listings include Australia, Cyprus and Turkey. “We’re also working on Dubai, Israel and Beirut,” says Chris Pfister, Export Director for Ray Tobacco, “but nothing has been confirmed yet. At the moment our duty free business is about 50% airports and 50% border stores. We do very well at border stores in the Middle East and I think many of these locations often get overlooked by suppliers.” In terms of the Americas, Pfister tells us that contacts made in Orlando in March have led to negotiations with stores in the Caribbean. However, no listings have yet been confirmed. South America is also looking like a good possibility for the future; Ray Tobacco has developed solid contacts in Honduras, Ecuador and Venezuela. “The first quarter was a little slow but things picked up in the second quarter,” Pfister tells us. “We’re looking forward to continued sales growth in the second half of the year as we continue to expand our reach in duty free.”

The Five & Dime and High Roller tobacco brands, part of Protégé International’s portfolio, premiered new RYO offerings at Inter Tabac in Dortmund

KT&G releases Tonino Lamborghini cigarettes This month sees the launch of a new cigarette brand from KT&G developed as the result of a collaboration with the well known Italian luxury brand. The world’s first Tonino Lamborghini cigarettes contain premium smoking leaf tobacco—which represents only about 2% of the leaves grown in the world— and South European Orient leaves. KT&G says that the cigarettes offer “a soft throat and enriched taste,” and are designed to retain the optimal level of moisture for an improved smoking experience. Other high-end features include what KT&G calls an embossed “lip release filter.” The product features the familiar Toro emblem on the top of the package, the charismatic symbol of the Lamborghini family, to express strength, progressiveness and exclusivity. Two variants of Tonino Lamborghini have been released—L6 (6.0 mg of tar) and L8 (8.0mg of tar). Tonino Lamborghini will be available at China, Singapore and Hong Kong Airports from September 2012. Also new this year from KT&G is Bohem Mojito Double. Bohem is made of 30% premium cigar leaves, giving the brand a unique taste and aroma. Showcasing a vintage package design, KT&G says that Bohem Mojito Double is targeted toward stylish professionals who prefer a refined smoke. Tonino Lamborghini cigarettes were designed to be premium in every way and will be released this month at select airports throughout the Asia Pacific region

Protégé International’s Five & Dime launches RYO at Inter Tabac in Dortmund Protégé International has announced that Five & Dime premiered a new roll your own (RYO) tobacco at Inter Tabac in Dortmund. The development follows on from Five & Dime’s success in Middle East domestic markets with its iconic packaging, visualizing the vibrant, dynamic post modernism of 50s and 60s pop art. The company says that the Five & Dime brand is “perfect for the modern urban experience.” Additionally, Protégé International tells us that High Roller RYO also appeared at the Inter Tabac show for the first time. Those wishing to learn more about the products can visit Red Village K12.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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