ASIA Duty Free & Travel Retailing Magazine

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MARCH 2013 • VOL 17, NO 1

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TFWA/APTRA CHINA 2013

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Destined to shop p.

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Diageo keeps walking p.

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Letter from the Editor

Welcome back,

China!

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n the latest issue of Asia Duty Free and Travel Retailing, we present upbeat news from China and give readers a look at a brand new opportunity to get in-depth information and advice on how travel retail can benefit as the world’s second-biggest economy bounces back from the brink.

China is on the rebound. After 2012 delivered a spate of gloomy economic statistics and talk of a “hard landing,” the numbers and the confidence are on an uptick again. New domestic and international routes are being opened up, and more high-spending Chinese travelers are taking to the skies domestically and abroad. The number of Chinese travelers has been growing in the double digits, a pace that the Civil Aviation Administration of China predicts will hold until 2015.

Travel retail in China is poised to benefit in a big way as the nation moves back into high gear. What’s needed right now is good up-to-the-minute information and advice from China experts and insiders.

A brand-new industry event promises to deliver exactly that. Titled “China’s Century— The Fast Pace of Change in China Duty Free & Travel Retail,” the conference will bring together key decision makers from China’s aviation industry, including airlines and airports, and retailers and suppliers from the international duty free and travel industry.

The event, which is being put on by TFWA and the Asia Pacific Travel Retail Association (APTRA), is the first industry association event in China. And it couldn’t be better timed or more relevant. Already the key growth driver in Asia, China has vast potential, and the conference will provide attendees with invaluable insights into how the market works, what gets Chinese consumers to buy—both at home and abroad— and how the nation’s aviation and travel retail sectors are changing.

Airport architecture and airport retail design will be examined, and the conference will take a close look at how Chinese airports differentiate and engage Chinese and international travelers. Independent consumer and retail spend research will be presented, and attendees will benefit from expert insight on connecting with Chinese consumers through new media.

To back up the positive numbers, our new issue also presents research from i2i Group China, which is based in Shanghai, Beijing and Hong Kong and focuses on the Chinese world traveler.

"The Chinese are learning to travel domestically and more importantly, they’re beginning to travel internationally," says i2i Group CEO Alexander Glos. In 2012 about 78 million Chinese traveled, 20% more than in 2011. Chinese travelers are the highest spenders per capita in the travel industry, spending close to US$7,000 per person. And Glos says Chinese travelers take longer trips, often lasting for more than 12 days.

The future potential of this huge market seems almost limitless. It’s good to have China back!

Kind regards,

Asia 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.

The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. March 2013, Vol. 17, No. 1. All rights reserved.

Nothing may be reprinted in whole or in part without written permission from the publisher. © 2013 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 ASSOCIATE EDITOR 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 CONTRIBUTORS Andrew Brooks ADVERTISING SALES ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca

Hibah Noor Editor hibah@dutyfreemagazine.ca

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ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

The new fragrance

Letter from the Editor

欢迎回归，中国！ 在最新一期的《亚洲免税和旅游零售业》杂志中， 我们发布了来自中国的利好消息，并向读者提供了 获取深度信息和建议的新机会，使之了解中国作为 世界第二大经济体可如何通过经济的起死回生使旅 游零售业受益。

与会者将讨论机场架构及机场零售设计，并密切关 注中国机场如何区分和吸引中国和国际旅客。会上 还将发布独立的消费者和零售消费研究结果，使与 会者通过新媒体受益于专家针对中国消费者提出的 相关意见。

中国经济正在经历反弹。2012年，中国政府发布了 一连串令人沮丧的经济统计数据以及关于“经济硬 着陆”风险的报告，前景不甚乐观。然而，在此之 后，中国的经济数据和市场信心重新上扬。中国新 开辟了多条国内和国际航线，越来越多的中国高消 费游客乘飞机在国内外旅行。中国游客的数量正以 两位数的增速高速增长，中国民用航空总局预计此 增幅将保持至2015年。

为了支持中国的积极增长，我们最新一期的刊物也 发布了爱戴爱集团（中国）的研究。该集团在上 海、北京、香港设有办事处，主要关注环球旅行的 中国旅客。

随着中国持续高速增长，中国的旅游零售业已准备 好从中大举获益。现在，我们需要了解中国专家和 业内人士关于新形势的中肯意见。 在此方面，一个全新的行业盛会将提供良机。此次 会议主题为“属于中国的世纪 — 中国免税与旅游零 售业的快速变化”。会上，来自中国航空业，包括 各航空公司和机场，以及国际免税和旅游行业零售 商和供应商的主要决策者将齐聚一堂。 该活动由TFWA和亚太区旅游零售协会 (APTRA) 主 办，是中国首个行业协会活动。本次盛会的举行可 谓恰逢其时，顺应大势。作为亚洲增长的关键驱动 因素，中国具有巨大的潜力。在此次会议上，与会 者将获得宝贵的意见，了解市场如何运作、推动中 国消费者在国内外消费的因素，以及中国航空和旅 游零售行业的变化过程。

爱戴爱集团首席执行官Alexander Glos说：“中国国 内游日益走热，更重要的是，中国游客开始环游世 界。”2012 年，中国游客数量达 7800 万人次，比 2011 年高出 20%。中国游客是全球旅游业中人均花 费最高的群体，人均花费接近 7,000 美元。另外， Glos 表示，中国游客每次旅行的时间更长，通常超 过 12 天。 中国这一巨大市场的未来潜力不可限量。欢迎中国 回归！ 此致，

Hibah Noor

编辑 www.dutyfreemagazine.ca

Want more? Visit us online to catch up on regional industry developments in our e.Newsletters and read recent print issues. www.dutyfreemagazine.ca

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ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

MARCH 2013 • VOL 17, NO 1

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TOP STORY: CHINESE TRAVEL RETAIL

Getting around the Great Wall

Foreign travel retailers may find their activities circumscribed by Chinese regulation and their operations overshadowed by a local heavyweight, but they still have considerable room for maneuver

34 Cleared for takeoff

HONG KONG INTERNATIONAL AIRPORT

Riding strong passenger numbers and with an array of environmental initiatives in the works, Hong Kong International Airport is heading for another successful year

避开长城 外国旅游零售商发现，尽管中国法规限制其活 动，当地巨头也阻挠其运作，但他们仍有非常 大的运营空间

20 Destined to shop

36 On top in Taiwan EVER RICH

Already boasting a strong presence in travel retail, Ever Rich is making its presence felt with major new projects

OUTBOUND CHINESE TRAVELERS

The number of outbound Chinese travelers is on the rise, and they’re drawn by long-haul destinations with ample opportunities to shop

购物至上 中国出境游客的数量日益增加，亲睐购物便捷的 长途旅游胜地

28 Strength in numbers

ASIA PACIFIC TRAVEL RETAIL ASSOCIATION

The Asia-Pacific Travel Retail Association, coorganizer of this week's "China's Century" conference, has a keen focus on the Chinese travel-retail market. But as Aptra President Sunil Tuli tells Asia Duty Free, the China growth story must be seen in the context of developments across an industry in which the key stakeholders must speak with one vo ice

32 Roots maneuver DFS GROUP

DFS's return to its Hong Kong origins puts it in pole position to tap a huge and fast-growing market of mainland Chinese travelers

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ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

38 A force to be reckoned with CHINESE BUYING POWER

The boom in Chinese travelers means that operators worldwide who aren't targeting these high-spending shoppers are likely losing out

40 42

AIRLINE NEWS Cathay Pacific maintains service focus ■ AirAsia looks to India for future growth ■ ANA celebrates 60th anniversary with new livery design ■ JAL Group sees passenger numbers surge in 2013 ■ Singapore Airlines renews contract with IFE Services ■ Qantas linking east-west domestic routes with widebodies

IN BRIEF Shanghai to offer tax-free shopping for tourists ■ The Nuance Group unveils new branding and corporate identity ■ Indian business body calls for higher duty-free liquor allowance

44 Fragrance frenzy

BEAUTY BEAT: FRAGRANCES Flowers, fruit and foliage set the tone

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54 Asian contenders CONFECTIONERY NEWS

Leading confectioners vie for more of the Asian market

58 Tradition meets innovation CATERING TO ASIAN TRAVELERS

From new variants of tried and true favorites to spirits that haven't traditionally been popular in Asia, suppliers are pulling out all the stops to catch travelers' eyes

45 Refined tones

60 Positioned for growth

46 A beautiful escape

62 The power of partnership

47 Rising in the east

64 Learning curve

48 Beauty blitz

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DIAGEO GTME

BEAUTY BEAT: SKINCARE & COSMETICS

Diageo focuses on innovation across Asia Pacific duty free to ensure Johnnie Walker maintains its leading position as the Scotch of choice for Asian travelers

Stronger colors, better skincare based on scientific support

VILEBREQUIN

GULF BEVERAGES

Swimwear leader Vilebrequin maintains its fourdecade focus on quality and design

FERRAGAMO PARFUMS

Gulf Beverages and Whyte & Mackay enter into strategic distribution partnership

BERRY BROTHERS & RUDD

Ferragamo Parfums looks to Asia for market acceleration

LIMITED BRANDS

Victoria’s Secret sets the pace with new locations, new products

BBR approaches Asian markets at different stages of development

50 Success with a conscience HUNTING WORLD

Hunting World positions its bags with both consumer and environment in mind as it develops its presence in travel retail

51 Beyond the bag

LIQUOR NEWS Inniskillin welcomes subzero temperatures for Icewine harvest 2012 ■ Rémy Cointreau continues to pique the interest of consumers in Asia duty free ■ Prowood offers two exquisite spirits from France and Armenia ■ Lucky eighth Glenfiddich Crystal Stag in place at Seoul Incheon ■ Martell and Chivas Regal launch luxury walkthrough boutique at KLIA ■ Bacardi mixes fresh new look and taste for RTS cocktails ■ Korean Air lists Diverse Flavours’ Avondale Samsara in its Skyshop

70 New products, new

BRITISH AMERICAN TOBACCO GLOBAL TRAVEL RETAIL ASIA PACIFIC

LESPORTSAC

With almost 40 years behind it, LeSportsac is on top of its game when it comes to the bag and luggage category

52 New again

opportunities

British American Tobacco Global Travel Retail Asia Pacific plans new launches to cater to adult smokers in Asia travel retail

AIGNER

Building on its history in travel retail, Aigner’s new releases merge traditional and modern

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TOBACCO NEWS Habanos launches Selección Petit Robustos for travel retail ■ Davidoff releases Year of the Snake edition ■ Imperial Tobacco celebrates a rich tradition

gives smoking a 73 Djarum creative edge DJARUM

Over 60 years in the making, the company sits at the forefront of the industry with innovations in cigarette making

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NEW & NOTABLE Chupa Chups Smurfs Markers ■ Nestle Adventure Mix 474g ■ Age of Discovery Red Wine Cask Finish www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Top Story: Chinese Travel Retail

Getting around the Great Wall

China Duty Free Group has embarked on an aggressive drive to grow its business in airports such as Hangzhou

Foreign travel retailers may find their activities circumscribed by Chinese regulation and their operations overshadowed by a local heavyweight, but they still have considerable room for maneuver BY

P. CONVERY

ARI's John Woodhouse says opening stores in Kunming has been a learning experience, but that the retail opportunity is there for the taking

T

hrough much of 2012, the writing seemed to be on the wall for the Chinese economy, with month after month producing worrying economic statistics, and with observers fretting that the country was headed for a socalled “hard landing.�

More recent developments, however, have given China-watchers reason for relief, with several consecutive months of data showing economic expansion following a sustained period of shrinkage.

Economic headwinds Travel retailers in the world's second-biggest economy managed to sustain a solid rate of sales growth in spite of the economic headwinds and, as China's economic growth gathers pace once more, they are poised to cash in on the country's seemingly insatiable demand for travel and topnotch retail to go with it.

Rising levels of air passenger traffic and the opening up of new routes both within China and internationally have been two of the key drivers of growth in the travel-retail sector.

The number of air travelers on Chinese domestic and international routes has grown at, or near, double-digit rates in recent years, and the Civil Aviation Administration of China expects that number to increase by 11% annually until 2015.

China Duty Free Group Assistant President Gu Naxin says the country's 12th five-year development plan for service industries, released in December, aims to make China's travel industry a strategic industry within the national economy.

"By the end of 2012, China had become the third-largest 10

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

[market] in terms of receiving of inbound tourists and outbound tourism, and the domestic tourism market is gradually developing to become the largest in the world," Naxin says. "Outbound tourism and domestic tourism among Chinese citizens will keep growing rapidly in the years to come, and Chinese are [set] to become the duty free consumers with the highest purchasing power in the world. All of this ... will bring about new development opportunities for the duty free industry in China."

John Woodhouse, Head of Business Development for China & East Asia at pioneering travel retailer Aer Rianta International (ARI), says: "What we're seeing at the moment is massive growth in domestic traffic, and slightly slower growth in international.

International traffic is growing from a smaller base, while domestic is growing from a larger base."

He says China's aviation market is about 95% domestic, pointing out that the split is similar in the US.

ARI's operation at Kunming is set to expand to about 750 square meters of retail space, offering perfume & cosmetics, fashion & accessories, jewelry, electronics and watches

Kunming's Changshui International Airport, boasting the fourth-biggest terminal building in China, has drawn local retailers such as China Duty Free and foreign players such as Ireland-based Aer Rianta International

ARI operates its Kunming stores under the brand “The Loop,” which it has also deployed at airports in its native Ireland

Aviation competition heats up China's aviation sector may be overwhelmingly a domestic one, but in 2012, following China Southern Airlines' aggressive opening of new routes to Europe and Australia, non-Chinese carriers began to sit up and take notice of the potential of the Chinese air travel market. Much of the focus of their attention is on China's socalled "second-tier" cities—partly because these hubs are largely unexploited by foreign airlines, but also because slots at the airports serving first-tier cities such as Beijing, Shanghai and Guangzhou are now almost impossible to secure other than at midnight hours.

This has led carriers such as British Airways and Qatar Airways to plan services to Chengdu, and Finnair to move into Xian as the city's first non-Chinese airline. AirFrance-KLM and US carrier United are also planning to enter second-tier Chinese cities. Not to be outdone, Chinese airlines have also stepped up their international services from these cities, with China Eastern launching a route between Nanjing and Sydney, and Hainan Airlines starting services from Dalian to Seattle. Sichuan Airlines has inaugurated Shenyang-Vancouver flights

and is planning to start flying from Chengdu to Melbourne this year.

All this expansion is responsible for—and has been facilitated by—a boom in airport construction. Under China's current fiveyear plan, which runs through 2015, the government plans to open 72 new airports, and upgrades to 100 more are also on the cards.

One of the biggest new projects of 2012 was Changshui International Airport, which opened late last June in the southwestern city of Kunming. The airport boasts the fourth-biggest terminal building in China, covering nearly 550,000 square meters, and handled about 24 million passengers last year, with traffic throughput set to rise to 38 million passengers by 2020.

ARI was quick to spot the opportunity presented by the new hub, and opened its first China stores there on the same day as the terminal began operations. Like all foreign travel retailers in China, ARI is shut out of the duty free business, and it instead offers a wide range of duty paid products in the perfume & cosmetics, fashion & accessories, jewelry, electronics and watches categories across more than 650 square meters of airside space.

"We'll end up with about 750 square meters of space when we're all fitted out," Woodhouse says.

Learning curve ARI chose a second-tier city airport for its first foray into the Chinese market and will focus on "getting things right" before moving to expand its local footprint, notes Woodhouse. And he adds that setting up on the Chinese mainland has been a learning experience.

"Average spend is very high, but the number of transactions is quite low," he says. "The spending is extremely high, especially for a duty paid operation, but the actual penetration is lower than we expect it to be over time."

Nevertheless, Woodhouse says Changshui International Airport represents a big opportunity for ARI. "We're starting from the bottom in terms of growing the market," he explains. "But the potential is significant, absolutely significant."

CDFG also got in on the action in Kunming, opening duty-free stores in the airport's F2 international lounge that offer an impressive lineup of international brands, including Chanel, Biotherm, Clinique, Laneige, L'Occitane, Lancôme, L'Oréal and Dior in the beauty category, watches and sunglasses brands Longines, Tissot, Armani, CK, Gucci and Boss, and bag and jewelry labels Lesibo, Samsonite and Swarovski.

Naxin says CDFG's duty free stores at the new airport—and its newest crop of stores in the airports serving Dalian and Hangzhou— are operating smoothly, with sales performing well.

CDFG has its own strategies for improving conversion rates, and Naxin says the retailer is active on a number of fronts when it comes to driving sales growth.

He explains: "CDFG [is] devoted to researching consumption habits and [the purchasing] tendencies of Chinese travelers. Based on that, we adjust our goods and brand structures continuously, introduce brands favored by Chinese according to sales and attract more tourists to our stores with a range of marketing methods. CDFG is also dedicated to improving its own capacities to optimize service procedures and improve service quality in accordance with consumer feedback. In addition, CDFG tends to co-operate with hotels, tourism websites, banks and airlines to attract high-end customers from these enterprises and increase the [value of] transactions per customer."

CDFG may have its sales growth strategy mapped out in the duty free channel, but the more lightly regulated duty paid market to which foreign players are confined nevertheless remains a major opportunity for them. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Top Story: Chinese Travel Retail

Where the action’s at

King Power subsidiary Orient King Power is responsible for much of the company's business in mainland China

Revenue potential for duty paid Sunil Tuli, Managing Director of King Power Group (Duty Free & Travel Retail) Hong Kong, which through its subsidiaries operates retail businesses in airports and the domestic market in China, says: "The potential is there, and everybody is either there or trying to get there."

Asked whether its revenue potential is as great as that of the duty free channel, Tuli nods deeply and exclaims: "Oh yeah! There's no reason why it shouldn't be."

Woodhouse also sees the channel not merely as a way into a duty free market that may open up to non-Chinese players at some point in the future, but as a lucrative business in its own right.

"Duty paid in its own regard has significant potential," he explains. "The issue is that it takes a long time for the customers to understand the marketplace. The first thing they're looking for is good value, so the best retailers can offer at the moment is a price promise that pledges [pricing that's] competitive with downtown.

But brands and retailers [need to] come together and decide they can introduce a discount on downtown prices. That's what'll cause a significant increase in sales."

Tuli also sees scope for boosting low conversion rates, but is more circumspect about how that might be achieved.

"The potential for increasing conversion rates is huge," he says.

"You only have to look at what Chinese travelers are doing outside of China. But why is it not happening at the airports? It could be the prices, it could be the service. There are a whole lot of things you could attribute it to."

Steffen Brandt, Chief Executive of Heinemann Asia Pacific, whose Chinese retail operations include supply contracts for stateowned duty free stores in Shanghai and Dalian, says: "The Chinese ... travel a lot, and it helps very much to understand that they are changing, from being inexperienced in terms of travel, much faster [than some other nationalities], and that they're much faster to realize what's really value for money."

One senior travel retail executive who asks not to be named says: "Why are people not spending as much in China as they do outside the country? It's all about the [political] stuff that's happening in China right now. People don't want to show their wealth, where their money has come from - they don't want to be seen spending money."

And another executive who also chooses to remain anonymous says: "It could have to do with the new anti-corruption laws that stop people from buying gifts [for business associates]. All the high-end brands have been affected."

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Whether low penetration rates in China are down to politics or pricing, macroeconomics or maximizing the appeal of the retail proposition, there is one thing that travel retailers can agree on: the increasing importance of the country's second-tier cities to continued sales growth.

Xian is another second-tier city where a major airport project opened in 2012—a new Terminal 3 at Xianyang Airport, China's eighth-busiest, which has been struggling to accommodate passenger traffic growth of almost 20% annually.

LS travel retail China opened four new fashion stores at the airport in December, adding to its souvenir outlet, children's shop and two landside convenience stores, and bringing the total number of its outlets there to eight. The boutiques, carrying Salvatore Ferragamo, Hugo Boss, Coach and Kent & Curwen are the company's first luxury fashion outlets in China.

Philippe Fontalba, LS travel retail ASPAC's Luxury, Fashion & Accessories Director, says: "The opening of these first fashion stores in China is really exciting for us. It was a good opportunity for us to integrate some new brands that are strong in China into our portfolio."

It's in airports such as this that Woodhouse says he sees a bright future.

"You have to remember that cities like these are cities of 14-15 million people—they're large cities," he explains. "Kunming is the same size as Madrid in terms of population, and if you take Yunnan Province, it's got a population slightly bigger than Spain. So the population is there, the infrastructure is there, the passenger numbers are growing and the propensity for travelers to spend is also growing."

Tuli says: "Ok, they're not as big as Shanghai or Beijing, but a second-tier city in China means millions of people, and I think it's all happening. The action will continue to be in [these] big cities.

There's more and more wealth, standards of living are going up, people are wanting more and traveling more, so they're seeing a lot more than they used to."

"In China, more than 80% of consumers are living in secondtier and third-tier cities," says Naxin. "The latest research done by ACNielsen indicates that the pace of development in the retail industry in second- and third-tier cities in China has surpassed that of the first-tier cities, and if average sales in second- and third-tier cities catch up with that of the first-tier cities, the size of the market will triple. This also applies to the duty free industry."

Naxin says Chinese travelers from second- and third-tier cities are already punching above their weight in terms of tourist spending, implying that they constitute a lucrative and growing market for travel retailers.

"The consumption power of second-tier and third-tier cities is climbing year by year, so [their brand choices are] upgrading continuously," he says. "According to statistics, residents of second- and third-tier cities superseded consumers from Shanghai, Beijing, Guangdong and Zhejiang years ago as the consumers making the biggest contributions to tourism in Hong Kong."

Top Story: Chinese Travel Retail

China Duty Free is building on the stunning success of its store in Sanya, Hainan, which one industry source says may do more business than all its other stores put together

The next wave of growth CDFG is wasting no time in taking advantage of the market that it sees as bringing the next wave of growth in the mainland's travel retail industry.

Naxin says: "CDFG is actively competing for the rights to manage businesses ‌ with enormous development potential in [airports in] second- and third-tier cities such as Nanjing, Guilin, Ningbo, Wuxi and Nanning," and that it already has certain understandings in place for airport projects in Hefei, Yancheng and Shantou.

And airports are not the only locations at which CDFG is redoubling its efforts to increase its presence. The domestic dutyfree island of Hainan, downtown sites, China's burgeoning highspeed railway system and cruise lines are all in the retailer's sights.

On Hainan, following the runaway success of CDFG's first store offering duty free to domestic visitors in the city of Sanya, the company's Haitang Bay Shopping Center is currently under construction. When it is completed, in the second half of 2014, it is likely to be the world's biggest duty free retail complex.

In the downtown duty free channel, CDFG has been making inroads with municipal governments in Shanghai and Beijing. It now has strategic co-operation agreements with the authorities in Shanghai's Pudong New District and Chaoyang District in Beijing to open duty free stores allowing tax-free shopping for outbound tourists, although when it will cut the ribbon on these new stores has yet to be determined.

Woodhouse says the downtown sector is also something ARI is watching as the market begins to develop.

"The downtown duty free concept is changing rapidly at the moment, and it's something we're keeping our eye on," he says. "Currently, with the exception of Hainan, downtown duty free is restricted to Chinese nationals who have traveled abroad within the past six months, but it looks as though in some provinces that may change to allow Chinese nationals who don't hold a local ID card to purchase in those stores twice a year. If that happens, we'll start seeing tourism destinations such as Yunnan [of which Kunming is the provincial capital] and Sichuan looking more attractive as places to launch a downtown duty-free offer. But the [policy] environment is in flux.

We're looking at it and we're open to it, but we don't expect an overnight change in the legislation."

Meanwhile, on the country's bullet-train rail network, CDFG has 14

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

the contract to operate 6,000 square meters of retail on the departure floor of Shanghai's Hongqiao Railway Station, representing what Naxin calls "a brand new breakthrough for [its] tourism retail business.�

"The express railway system in China is growing rapidly," he says.

"The Wuhan-Guangzhou express railway, the Beijing-Shanghai express railway and the Beijing-Guangzhou express have all been completed in recent years, and the scope for the development of commercial projects is huge in the future.

"Our Shanghai Hongqiao Railway Station commercial project is the first step [in] accumulating experience and training the team to win [bids for] the operation of larger retail [developments] in future ... and CDFG will compete for more such opportunities."

And CDFG is making its debut on the high seas. In a partnership with Star Cruises' parent company, Genting Hong Kong, the retailer will jointly develop duty free retail aboard the cruise line's recently revamped liner the SuperStar Gemini. The deal gives CDFG a presence in the ship's 450-square-meter shopping area, where it will sell products including luxury handbags, wristwatches, sunglasses, perfumes and cosmetics.

Genting Hong Kong President David Chua says: "SuperStar Gemini was restyled with a primary focus on Chinese cruise passengers ... [and] our partnership with China Duty Free Group will provide a comprehensive, one-stop cruise experience that Chinese passengers will be fond of."

Following two months operating out of Sanya, from where it will cruise the Vietnamese coast, SuperStar Gemini will sail to Shanghai, where it will be based until October.

CDFG may have a turnover that's smaller than many of the potential rivals who are now knocking at China's front door, but the scale of activities such as these and its sheer reach makes it a formidable force on its home territory. Yet the range of non-Chinese retailers' activities in China, and the ways in which they are tapping the Chinese market both inside and outside China's borders, is a testament to their skill in sniffing out business opportunities even though they face their very own Great Wall of regulation keeping them off CDFG's turf.

Foreign retailers may thus find themselves outgunned by CDFG in its home market, but they seem not to have lost sight of the fact that being outgunned doesn't necessarily mean being outmaneuvered. c

Top Story: Chinese Travel Retail

避开长城 外国旅游零售商发现，尽管中国 法规限制其活动，当地巨头也阻 挠其运作，但他们仍有非常大的 运营空间。 中国经济在2012年大部分时间似乎呈现不祥之兆，逐月出炉 的经济统计数据令人担忧，观察员们担心中国走向所谓的“硬 着陆”。 然而，最新的发展趋势让中国观察员们稍有放松，连续数月 的数据表明，中国经济在持续紧缩之后开始扩张。

经济逆风 尽管面临着经济阻力，世界第二经济大国的旅游零售商仍竭 力维持稳定的销售增长率。在中国的经济增长再次加快步伐 时，他们准备乘机利用国家对旅游和一流零售似乎难以满足 的需求大展宏图。

King Power has numerous operations in China, and continues to expand its footprint with opening such as this store in Chongqing in February

航空竞争趋于白热化 此前，中国航空主要是以国内市场为主导，但继中国南方航 空公司在2012年开通飞往欧洲和澳大利亚的新航线后，国外 航空公司开始关注中国航空旅游市场的潜力。它们主要关注 中国所谓的“二线”城市，部分原因是由于国外航空公司大多 未开辟这些枢纽，而且它们只能在午夜时间抵达诸如北京、 上海与广州之类一线城市的机场。

近年来，中国国内和国际航线的旅客数量几乎呈现两位数的 增长率，中国民用航空局预计年旅客增长率截至2015年将达 到11%。

英国航空公司、卡塔尔等航空公司计划提供飞往成都的服务， 芬兰航空公司将作为首家国外航空公司进入西安。法国航空 公司KLM及美国联合航空公司同样计划进入中国二线城市。 中国航空公司也不甘示弱，陆续从这些城市提供国际服务， 中国南方航空公司开通南京与悉尼之间的航线，海南航空公 司开通从大连飞往西雅图的服务。四川航空公司已开通沈阳 与温哥华之间的航班，并计划今年开通从成都飞往墨尔本的 航班。

中国免税品集团总裁助理顾纳新说，12月公布的服务业第十 二个五年发展计划致力于让中国的旅游业成为国家经济的战 略性行业。

此次扩张旨在促进机场建设，而后者早已推动此次扩张。在 截至2015年的中国现行五年计划下，政府计划开设72个新机 场，升级100多个机场。

顾纳新说：“就接待入境游客和出境旅游而言，中国截至2012 年已成为第三大市场，国内旅游市场正逐步发展成为世界最 大市场。中国公民的境内外旅游在未来几年将快速增长，中 国人预计将成为世界上具有最高购买力的免税品消费者。这 一切……将为中国的免税品行业带来新的发展机遇。”

2012年一个最大的新项目是长水国际机场，它于去年6月在西 南城市昆明修建。该机场号称建有中国第四大机场大楼，占 地大约550,000平方米，去年接待大约两千四百万名乘客，交 通吞吐量计划在2020年上升至三千八百万名乘客。

日益增长的航空客运量和新航线的开通已成为中国和国际旅 游零售业增长的两大重要原动力。

约翰·伍德豪斯是开创性旅游零售商爱尔兰里安达国际航空公 司(ARI)的中国和东南亚业务开发的负责人，他说：“我们目 前看到的是，国内交通快速增长，国际增长相对缓慢。国际 交通增长基数较小，而国内交通增长基数较大。”

ARI很快意识到新枢纽带来的机遇，在机场大楼开始运行的 当天开张其第一批中国商店。正如所有国外旅游零售商一 样，ARI的免税品业务被拒之门外，它提供各种各样的完 税产品，比如香水、化妆品、时装配饰、珠宝、电子产品、 手表，在机场占地650多平方米。

他认为，中国航空市场约95%为国内市场，这说明此比例与 美国相似。

伍德豪斯说：“当我们全部装修完毕之后，占地面积将约为 750平方米。”

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ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

完税业务的收入潜力 香港皇权集团（免税品及旅游零售）的分公司在机场和中国 的国内市场运营零售业，其总经理Sunil Tuli说：“潜力就在这 里，每个人都在这里或试图来这里。” 当被问及其收入潜力是否与免税品渠道一样巨大时，Tuli点 头说：“哦，是的！这是理所当然的！” 伍德豪斯认为此渠道不仅是进入免税品市场的方式（免税品 市场将来可能在某种情况下对外国商家开放），而且它本身 就是赚大钱的业务。 China's second-tier cities are attractive destinations for travel retailers, but airports such as Shanghai's Pudong remain very fertile ground for high-end brands such as Swarovski

King Power's Sunil Tuli says the revenue potential of the duty-paid channel in China is as great as that of duty free

他解释道：“完税业务本身具有巨大潜力。问题是消费者需要 很长时间了解市场环境。首先，他们寻求物有所值，因此最 好的零售商可以在此时提供比商业区更具竞争力的价格承诺。 然而，品牌和零售商需要协商决定他们能提供比商业区价格 更具有竞争力的价格。这就会极大地增加销量。” Tuli同样看到低转换率的巨大提升潜力，但他对于达到此目 的的方式持谨慎态度。 他说：“提高转换率的潜力是巨大的。你只需看看中国游客正 在境外做的事情。可是为什么这些事情不会在机场发生呢？ 原因可能是价格，也可能是服务。这可能存在很多原因。”

学习曲线 他认为，ARI选择二线城市作为它进入中国市场的首次尝试 ，将在扩展本地市场空间前致力于“把事情做正确”。他继续 道，在中国大陆投资建设是不断积累经验的过程。 他说，“平均消费相当高，但交易数量非常低。开销十分高， 特别是完税业务，但随时间的实际渗透率却低于我们的预期 。” 然而，伍德豪斯认为，长水国际机场是ARI的一次大机遇。 “我们正从最低点开始发展市场，”他解释道。“然而，潜力是 十分巨大的。” CDFG同样准备进驻昆明，在机场二楼的国际休息室的免税 品商店提供各种国际品牌，包括美容类的香奈儿、碧欧泉、 倩碧、兰芝、欧舒丹、兰蔻、欧莱雅、迪奥；手表与太阳镜 品牌浪琴、天梭、阿玛尼、CK、古驰、波士；手袋与珠宝商 标乐斯博、新秀丽及施华洛世奇。 顾纳新说，CDFG在新机场的免税品商店经营顺利，最新的 商店开设在在大连和杭州机场，销售进展良好。 CDFG已制订战略来提高兑换率，顾纳新认为，当该零售商 的销售快速增长时，它能够提供大量的前沿商品。 他解释道：“CDGF致力于研究中国游客的消费习惯及购买趋 势。鉴于此，我们不断地调整商品及品牌结构，根据销售来 引进中国人喜爱的品牌，并通过各种营销手段吸引更多的游 客来我们的商店。CDFG同样致力于提高自己的能力来优化 服务程序，并根据消费者的反馈来提高服务质量。此外， CDFG与酒店、旅游网站、银行、航空公司合作，从这些企 业吸引高端消费者，提高每位消费者的交易值。” CDFG可能已制订免税品渠道的销售增长战略，但外国商家 受到完税市场的调控限制较小，因此这对于它们来说仍是一 大机遇。

海尼曼亚太公司的首席执行官是斯蒂芬·勃兰特，公司在中国 的零售业务包括在上海和大连国有免税品商店的供应合同， 他说：“中国人喜欢旅游，这可以理解为他们正在发生改变， 不再对旅游毫无经验，其变化比其他国家的人更快，他们更 快地意识到金钱的真正价值是什么。” 一位要求匿名的资深旅游零售专员问道：“为什么人们在中国 的消费远不及在国外的消费？这正是中国现在发生的政治情 况。人们不想炫耀财富及他们的金钱来源，他们不想被别人 看到在花钱。” 另一名选择匿名的专员问道：“这可能与反对为业务伙伴购买 礼物的反腐新法有关。所有高端品牌都受到影响。”

新增长点 不管在中国的低渗透率究竟是与政治有关还是与价格有关， 是宏观经济有关还是与零售主张吸引力的最大化有关，旅游 零售商一致认为：国家二线城市日益增加的重要性与持续的 销售增长紧密相关。 2012年，一个重要机场项目在二线城市西安开通：咸阳机场 是中国第八个最繁忙的机场，新3号机场大楼能容纳年增长率 近20%的旅客流量。 拉加代尔中国旅行零售公司于12月在机场开设四个新时尚店， 增加纪念品店、儿童店及两个副区便利店，将商店总数增至 八个。精品店销售菲拉格慕、雨果波士、蔻驰与肯迪文，它 们是公司最先在中国推出的奢华时尚店。 菲利普·丰塔尔巴是拉加代尔旅游零售公司ASPAC的奢侈品与 时尚饰品总监，他说：“最先在中国推出这些商店让我们真正 地激动万分。这对于在中国热卖的新品牌中引入我们的商品 组合是绝好的机会。” 这正是伍德豪斯在机场看到的美好未来。 他解释道：“你必须记住，这些城市的人口为一千四百万至一 千五百万，它们是大城市。就人口而言，昆明与马德里具有 相同的规模；云南省的人口多于西班牙。因此，人口在这里， 基础设施在这里，乘客数量正在增加，游客的消费倾向同样 正在增长。” www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Top Story: Chinese Travel Retail

The duty-paid channel in second-tier cities such as Kunming is a key growth area for retailers like ARI, but John Woodhouse says retailers and brands must team up to undercut prices in downtown stores

Tuli说：“是的！中国的二线城市不如上海或北京，但它们意 味着上千万的人口，我认为一切都会发生。这一行为还将在 这些大城市中继续。财富越来越多，生活标准日益提高，人 们欲望越多，更爱旅游，因此他们的眼界比以前更广。” 顾纳新说：“在中国，超过80%的消费者居住在二线城市与三 线城市。”AC尼尔森公司的最新研究说明，在中国二线与三 线城市的零售业发展步伐已超过了一线城市，如果二线城市 与三线城市的平均销售额追上一线城市，市场规模将翻三番 。这同样适用于免税品行业。” 顾纳新认为，来自二线与三线城市的游客在旅游消费上已有 不凡表现，这说明他们将成为旅游零售商高利润、高增长的 市场。 他说：“二线与三线城市的消费力逐年增长，因此他们的品牌 选择正持续升级。根据统计，二线与三线城市居民几年以前 已赶超上海、北京、广东和浙江消费者，成为香港旅游业的 最大贡献者。” 在带动大陆旅游零售业下一波增长的同时，CDFG正及时地 利用市场。

下一波增长 顾纳新说：“CDFG正积极地在具有巨大发展潜力的二线三线 城市（诸如南京、桂林、宁波、无锡及南宁）竞争机场务， ”通过在合肥、盐城和汕头的机场项目即可见一斑。 CDFG不仅在机场竭尽全力扩大存在范围。海南国内免税岛、 商业区、中国迅速发展的高速铁路系统及巡游线都是CDFG 的目标所在。 在海南，CDFG是首家为三亚的国内游客提供免税品的商 店，公司的海棠湾购物中心如今正在修建。一旦于2014年下 半年完工，它很可能成为世界上最大的免税品零售综合大楼。 在商业区免税品渠道方面，CDFG已与上海和北京市政府一 起做出努力。它与上海浦东新区及北京朝阳区的权威机构签 署战略性合作协议来开设免税品商店，允许境外游客进入的 免税品商店，尽管这些新店何时开张，仍未定夺。 伍德豪斯说，ARI同样将商业区视为市场扩展的起点。 18

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

他说：“商业区免税概念目前变化很快，这也是我们关注的事 情。如今除海南之外，商业区免税在过去的半年里仅限于出 国旅游的中国公民，然而一些省有所改变，允许不持有当地 身份证的中国公民一年在这些商店购买两次商品。如果这样， 我们将可以看到云南省（省会是昆明）和四川省将成为更具 吸引力的地方更为，这些地方将提供商业区免税品。然而， 政策环境不断变化。我们关注它，我们欢迎它，但我们不期 待律法一夜之间就可以改变。” 然而，在国家的高速铁路网络方面，CDFG已在上海虹桥火 车站的候车楼承包运营6,000平方米，这正好印证顾纳新的话 “旅游零售业的崭新突破”。 “中国的高速铁路系统正发生快速变化，”他说。“武广高铁、 京沪高铁、京广高铁近年来已全部竣工，将来商业项目的发 展范围将非常宽广。” “在积累经验和培训团队方面，我们的上海虹桥火车站商业项 目迈出了第一步，有助于将来在更大的铁路开发运营项目中 中标…CDFG将争取更多这样的机会。” CDFG在公海上首次亮相。在与丽星邮轮母公司，云顶香港 有限公司的合作关系中，CDFG将与之在最近翻新的超级双 子星号游轮上联合开发免税零售业务。此项合作中，CDFG 在游轮上占有450平方米的购物区，会在此购物区销售诸如奢 侈手袋、腕表、太阳镜、香水和化妆品之类的商品。 云顶香港有限公司总裁蔡明发说：“超级双子星号重新改变风 格，主要对象是中国巡游乘客…我们与中国免税品集团合作， 提供中国乘客喜欢的综合性、一站式巡游体验。” 经过在三亚两个月的运营，超级双子星号将从那里巡游越南 海岸，并抵达上海，然后停泊在上海，直到10月。 CDFG的营业额可能小于大多数叩击中国前门的潜在对手， 然而其诸如此类的活动及绝对目标使其成为本土一股不可忽 视的力量。尽管他们面临着自身的调控长城，必须避开CDFG 的地盘，中国的外国零售商活动范围以及他们打开国内外市 场的方式证明他们善于寻找业务机遇。 外国零售商可能因此发现自己在国内市场被CDFG超过，但他 们似乎并未忽视这个事实：被超过并不一定意味着被打败。

Outbound Chinese travelers

Destined to shop

For 17% of Chinese travelers, shopping is purely for gift giving

The number of outbound Chinese travelers is on the rise, and they’re drawn by long-haul destinations with ample opportunities to shop BY MELISSA SILVA

Chinese travelers are the highest spenders per capita in the travel industry, spending close to US$7,000 per person

W

ith China set to be the world’s largest economy by 2021, it’s no wonder that Chinese travelers are gaining popularity in the travel and tourism industry.

Along with the Chinese traveler comes wealth, and according to Alexander Glos, CEO of market research consulting firm i2i Group China, 400 million people in China each travel over 500km every year, rendering China the largest domestic tourism market worldwide.

China is the third largest aviation market in the world, with 325 million people flying to the country this past year. Beijing Capital Airport is the second busiest airport on a global scale, handling over 80 million passengers per year, while the airports in Shanghai Pudong and Hong Chow handle in excess of 100 million people, making them the second busiest municipal airports in the world.

Travel trends Based in Shanghai, Beijing and Hong Kong, i2i Group China focuses largely on the patterns and habits of the Chinese world traveler. "The Chinese are learning to travel domestically and more importantly, they’re beginning to travel internationally," says Glos. In 2012 about 78 million Chinese traveled, some 20% more than in 2011.

According to Glos, Chinese travelers are the highest spenders per capita in the travel industry, spending close to US$7,000 per person.

In addition, Glos says Chinese travelers take longer trips, often for more than 12 days.

One of the top destinations for Chinese travelers is Hong Kong.

In 2012 alone, the city received 16 million Chinese visitors. Macau is also on the list, as it’s the largest gaming destination in the world, bringing in more revenue than gambling hot spot Las Vegas. Thailand is another top destination, welcoming over two million Chinese travelers, the same as Malaysia. Taiwan had just over a million Chinese visitors.

“In Indonesia, the largest international visitors to Bali are Chinese,” says Glos. “In 2012, the UAE tracked 225,000 Chinese visitors, which is an increase of over 40% from a year prior.” In terms of longhaul destinations, Australia, France and Germany combined lead the way, having attracted five million Chinese travelers in 2012. The US attracted 1.5 million, an increase of 40% from 2011.

Market shares The growing numbers can be broken down into three markets: the group market, the FIT market (independent or individual travelers and couples) and a new market, which is growing rapidly, the MICE market.

“We’re talking about people that are attending meetings, conferences and exhibitions,” says Glos in defining the MICE market.

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“The group market is the largest outbound segment, which typically includes older travelers over the age of 35.” Glos says the group market largely comes out of what can be called “second tier” cities in China.

“The first tier cities are Beijing, Shanghai and Guangzhou; second tier cities are interior cities—about 26 cities with over five million people,” he says. Most importantly, the FIT market is the fastest growing outbound sector coming from China presently. “These independent travelers tend to be younger, with an average age of about 30,” says Glos. “They are university educated and work for international companies. They’re usually comfortable with English and travel for business.”

The newest sector, the MICE market, is comprised of the highest spenders, spending on average over US$12,000 per person per trip, and US$145 on average per night on hotels. In addition, the MICE market is traveling longer that the other sectors. “In 2013, over 200,000 MICE tourists will travel largely to Southeast Asia,” says Glos. “This market is starting to grow into North America, Europe and the Middle East.”

International investment Whether looking specifically at the group market, the FIT market or the MICE market, the number one activity for all Chinese travelers is shopping, which is done predominantly while traveling abroad. Sixty eight percent of Chinese travelers say the primary reason they travel abroad is to shop. “Today, the Chinese account for only 10% of luxury sales in China,” says Glos. “Forecasts predict that in 2020, 44% of global luxury sales will be conducted in China.”

On average, 25% of tour groups and tourists who travel from China to France and Italy are traveling specifically to go shopping, and the number of female shoppers among these groups is increasing. “The

China is the third largest aviation market in the world, with 325 million people flying to the country in 2012

Savour the wave of tastes

average spend per outbound Chinese tourist on shopping alone is US$1,500 per person,” says Glos. “That equates to US$40 billion globally.” In France, 27% of premium products are bought by Chinese tourists, while in Hong Kong, that percentage rises to 30%. Additionally, Chinese tourists purchase 18% of the world's gold supply.

Chinese travelers shop internationally for prestige, even though you can easily purchase a brand such as Louis Vuitton in Shanghai and Beijing. “It’s much more prestigious to buy it in Paris, where you can have your picture taken in front of the store,” says Glos, which explains why the top shopping destinations for the Chinese traveler include London and Paris. The experience of the purchase itself is important for this traveler.

Price is also very important, and import duties on products into China range anywhere from 50% to

Alexander Glos, CEO, i2i Group China

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21

Outbound Chinese travelers

125%, which makes the price differential to purchase abroad compelling. If you are planning to buy US$15-$20,000 worth of goods, the differential pays for the cost of the trip.

Price aside, another motivation is selection. “The Chinese perceive that there is a far greater amount of choice available overseas, which isn’t always true, but they certainly believe that,” says Glos.

Maintaining rank According to Glos, China has over one million millionaires—not in terms of assets, but in terms of money in the bank. “These millionaires on average are 15 years younger than millionaires in Europe or North America,” he says. The high percentages of Chinese travelers shopping abroad will therefore likely not change, not only thanks to the disposable income of these travelers, but also the reason behind such large scale spending—status.

“What’s driving this crazy shopping for the Chinese? It’s a trophy of success,” says Glos. “China is becoming wealthy very fast and disposable income is on the rise. Urbanization, economic growth and disposable income in the second and third tier cities are all growing rapidly.”

For 17% of Chinese travelers, shopping is purely for gift giving.

In Chinese business and politics, giving gifts as part of a business relationship is absolutely critical. This explains why 37% of accessories purchased are gifts and why 60% of watch sales in the US are being sold to Chinese tourists, which has basically kept the industry afloat. Singapore has turned out to be the top destination for buying luxury watches and jewelry.

“We’re seeing an increased diversity of shopping,” says Glos.

“It’s not just premium products; it’s also electronics.” Real estate is also showing up at an increasing rate, which demonstrates the financial clout behind the Chinese consumer’s desire to enjoy an international lifestyle.

The shopping patterns of Chinese travelers have rendered them the world’s biggest tax free shoppers, according to Tax Free fund provider Global Blue. “Chinese tourists generate the biggest tax free sales globally,” says Glos. “Last year they chalked up more than US$3 billion in tax free shopping transactions.”

Paying it forward As for the future of Chinese outbound shopping, Glos believes that it will be driven by domestic conditions and factors inside China. The country’s economy is continuing to grow at an impressive pace, and this growth will escalate in the next three to five years, 22

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

which can only translate to more shopping.

“Chinese shopping will continue to grow in excess of 20% at least in next three years,” says Glos. “Some of our research suggests that the Chinese economy will have to basically slow to about 1% growth before you can see any type of drop in Chinese shopping around the world, because the shoppers coming out of China just aren’t going to be affected by a slowdown of a small portion compared to a radical slowdown in the Chinese economy.”

Although three categories have been defined, it’s not always easy to identify exactly who the Chinese shopper is as many different kinds of people travel out of China today. “It’s the 30-year-old who is looking for a certain type of product, it’s the 50-year-old who is looking for a completely different offer," says Glos. “It’s entirely possible for them to be buying a high-end bag at Louis Vuitton and then go to a shopping warehouse in the afternoon and buy socks and underwear at the cheapest price they can find. It’s a very diverse market.”

There’s an increased seasonality in the market, and a lot of premium brands are claiming that the biggest season for sales has become the first quarter of the year, not the fourth, since Chinese New Year is celebrated in February. In fact, in February 2012 during Chinese New Year, the national railways sold 1.1 billion tickets.

To put that into perspective, German national railways move that many people in five years.

“We’re seeing an increase in October due to national day holidays, which is a large outbound travel period, and of course June, July and August—these are the primary outbound travel periods for the Chinese,” says Glos. This explains why two years ago in June, Louis Vuitton stores in Paris reported three consecutive months of business thanks to the Chinese buyers visiting their stores.

There are also some companies who have developed products specifically for the Chinese market, such as Estée Lauder. The company is said to be developing an entire range for Chinese consumers.

Looking to future trends, Chinese living abroad seem to be behaving just like Chinese shoppers coming out of the mainland, a phenomenon that has become evident in several markets. As a case in point, the current number three entry point into the US for Chinese visitors is the highway between Vancouver, British Columbia and Seattle, Washington—which demonstrates that Chinese nationals who live in Vancouver are driving across the border to shop.

If current trends are anything to go by, the Chinese traveler’s financial clout and love of shopping are going to be even bigger marketc makers in the years to come.

Outbound Chinese travelers

购物至上 中国出境游客的数量日益增加，亲睐购物便捷的长途旅游胜地 2021 年，中国将成为全球最大的经济体，毋庸置疑，中国 游客也越来越受到旅游业的欢迎。据市场研究咨询公司爱戴 爱集团 (i2i Group China) 的首席执行官 Alexander Glos 表示，每年旅行 500 公里以上的中国游客达 4 亿人，且随 着中国游客的富裕程度提升，中国已成为全球最大的国内旅 游市场。 中国是全球第三大航空市场，去年一年就有 3.25 亿人乘飞 机飞往中国。北京首都机场是全球第二繁忙机场，每年的旅 客吞吐量达 8000 万人次，而上海浦东机场和虹桥机场的旅 客吞吐量为 1 亿人次，是全球第二繁忙的民用机场。 旅游趋势 爱戴爱集团在上海、北京和香港设有办事处，主要关注中国 环球旅行游客的模式和习惯。Glos 表示：“中国国内游日益 走热，更重要的是，中国游客开始出国旅行。”2012 年，中 国游客数量达 7800 万人次，比 2011 年高出约 20%。 据 Glos 表示，中国游客是全球旅游业中人均花费最高的群 体，人均花费接近 7,000 美元。另外，Glos 表示，中国游 客每次旅行的时间更长，通常超过 12 天。 香港是中国游客的首选旅游胜地之一。仅 2012 年一年，香 港就接待了 1600 万中国游客。澳门同样荣登首选榜单，它 是世界最大的赌博圣地，赚取的总收入比赌城拉斯维加斯还 多。作为另外一个首选之地，泰国接待的中国游客超过 200 万人次，与马来西亚接待的中国游客数量相同。2012 年去 往台湾旅行的中国大陆游客略高于 100 万人。 Glos 说道：“在前往印度尼西亚巴厘岛旅行的国际游客中， 中国人最多。”“2012 年，阿联酋接待的中国游客数量高达 225,000 人，比 2011 年多 40% 以上。”在长途旅游胜地中， 澳大利亚、法国和德国位于首选榜单的前三甲，2012 年共 吸引 500 万中国游客。美国吸引的中国游客数量达 150 万 人，比 2011 年增加了 40%。

市场份额 人数日益增长的游客可细分为三大市场：团体市场、FIT 市 场（散客或个人游客及夫妻游客）和快速发展的新市场 — MICE 市场。 Glos 在定义 MICE 市场时表示，“我们指的是参加会议和 展览的人群。”“团体市场的出境人数最多，通常为 35 岁以 上的年长游客。”Glos 称团体市场的游客大部分来自中国所 谓的“二线城市”。 Glos 表示：“一线城市包括北京、上海和广州；二线城市是 内陆城市，具体指人口超500万 的约26 个城市。”更重要的 一点是，FIT 市场是中国目前增长最快的出境旅游市场。他 说道：“这些散客通常更年轻，平均年龄为 30 岁左右。”“ 他们都有大学学历，而且在跨国公司工作。工作和旅行时， 他们习惯使用英语交流，出国一般都是公事出差。” 作为最新出现的市场，MICE 市场由高消费人群构成，每人 每次旅行的消费额为 12,000 美元以上，每晚酒店住宿费平 均为 145 美元。另外，与其他市场相比，MICE 市场的游客 旅行距离较长。“2012 年共有20 万多名 MICE 游客，他们 主要前往东南亚旅行。”Glos 说道，“这一市场目前正在向 北美、欧洲和中东扩展。” 国际投资 无论是团体市场、FIT 市场还是 MICE 市场，所有中国游客 出境游的首要活动都是购物，这在他们的旅行过程中占据了 重要地位。68％ 的中国游客表示，他们出国旅游的主要目 的是购物。Glos 说道：“目前，在中国奢侈品销量中，仅有 10% 来自于本国消费者 。”“预计到 2020 年，中国国内销 售的奢侈品数量将占全球总销量的 44%。” 平均而言，前往法国和意大利旅游的中国旅游团和游客中， 有 25% 的人专为购物而去，而且这些旅游团中女性购物者 的人数也在逐渐增长。“仅购物一项，中国出境游客的人均 花费就达到了 1,500 美元。”Glos 说道，“这意味着，中国 游客在全球的购物支出总计达 400 亿美元。”在法国，27% 的高端产品被中国游客买走，而在香港，这一比例已增至 30%。另外，中国游客所购买的黄金占全球总供应量的 18%。 Future trends indicate that Chinese living abroad seem to be behaving just like Chinese shoppers coming out of the mainland, a phenomenon that has become evident in several markets

24

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

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Outbound Chinese travelers

虽然在北京和上海也能轻易买到路易·威登这样的高端品牌 ，但中国游客到国外购物是为了体面。Glos 表示：“去巴黎 买路易·威登显得更有面子，因为可以在商店前拍照。”这也 就是伦敦和巴黎等城市成为中国游客首选的购物天堂的原因 。对游客来讲，购物体验本身至关重要。 价格也是一大重要因素，中国进口产品的关税从 50% 到 125% 不等，这使得出境购物与国内购物间的差价成为吸引 人的又一个优势。如果您计划购买价格为 1.5 万至 2 万美元 的产品，那么关税造成的差价正好支付旅行费用。 除价格外，出境购物的另一个动力来自于广泛的选择范围。 Glos 说道：“中国人认为，国外购物的选择范围更广，虽然 事实并不一定如此，但他们对此深信不疑。”

高档皮包，然后下午去仓储超市淘最便宜的袜子和内衣，这 是完全有可能的。这是一个非常多样化的市场。” 此市场的季节性越来越明显，许多高档品牌公司都表示，由 于中国人在 2 月份庆祝新年，因此热销季节是每年的第一 季度，而不是第四季度。事实上，在 2012 年 2 月份中国新 年到来期间，中国铁路部门售出了 11 亿张车票。若换个角 度来看，这一人数是德国国家铁路部门五年内运送人数的总 和。 Glos 说道：“据我们观察，中国 10 月份的国庆节是境外旅 游的高峰期，游客人数激增，当然 6 月份、7 月份和 8 月 份同样也是中国人境外旅游的主要时期。”正因为如此，两 年前的 6 月份，巴黎路易·威登商店报告称，由于大量中国 购物者来店消费，其已连续三个月实现销量增长。

保持领先 据 Glos 称，按照银行存款，而非资产总额统计，中国有超 过 100 万名百万富翁。Glos 说道：“这些百万富翁的平均 年龄比欧洲或北美的百万富翁低 15 岁。”因此，中国游客 到国外购物的人数比例可能会居高不下，不仅仅由于这些游 客的可支配收入较多，而且还源自如此大手笔花费背后的支 撑因素 — 社会地位。 Glos 说道：“是什么驱动着中国人疯狂购物？购物是成功的 象征。”“中国人迅速致富，可支配收入逐渐增多。二线和 三线城市的城镇化、经济和可支配收入都增长迅猛。” 对于 17% 的中国游客而言，购物只是为了送礼。在中国的 商业和政治环境中，作为维系业务关系的策略之一，送礼至 关重要。因此，中国游客购买的配饰 37% 被用作礼品，且 美国 60% 的手表由中国游客购买，正是这一现状从根本上 维持了美国配饰行业的繁荣。事实证明，新加坡是中国游客 购买奢侈品手表和珠宝首饰的首选之地。

此外，也有一些公司（例如雅诗兰黛）专门针对中国市场开 发了相关产品。据称，该公司正在针对中国消费者开发全套 产品。 展望未来的购物趋势，旅居国外的中国人与中国大陆购物者 的行为越来越趋同，而且这一现象在几大市场中愈加明显。 在此方面，一个很好的例证是，位于加拿大不列颠哥伦比亚 省温哥华和美国华盛顿州西雅图之间的高速公路目前已成为 中国游客进入美国的第三大入境路线，这说明许多旅居温哥 华的中国籍人士开始驾车跨境购物。 如果说目前的趋势可用作判断未来的可靠指标，那么中国游 客的雄厚财力和对购物的热衷将在未来几年内继续推动和扩 展市场规模。

Glos 说道：“我们观察到，购物种类正趋向多样化。”“所购 商品不仅仅局限于高端产品，电子产品也越来越受欢迎。” 购买房地产的中国游客也呈现加速上升态势，这表明了中国 消费者对于享受国外生活方式的渴望及其背后的财力支持。 根据免税购物服务提供商环球蓝联 (Global Blue) 的报告 ，中国游客的购物模式已使之成为是全球最大的免税购物 群体。Glos 表示：“中国游客的免税购物额位居全球之 首。”“去年，他们的免税购物交易额高达 30 亿美元以 上。” 放眼未来 Glos 认为，中国游客出境购物的未来前景将受到中 国国内状况和因素的推动。据 Glos 表示，中国经 济将以惊人的速度持续发展，并且这一发展还会在未 来三到五年内加速，进一步带动海外购物的增加。 “至少在未来三年内，中国游客的购物将以 20% 以上的速 度持续增长。”Glos 说道，“我们的一些研究显示，中国经 济增速基本上减缓至1%左右，才有可能使中国游客的全球 购物量有所下降，因为与中国经济急剧减缓相比，经济增速 小幅下降根本不会影响中国的购物者。” 虽然中国购物者被划分为三种类型，但由于如今出国旅行的 中国人愈加多样化，要准确定义中国购物者并不容易。“30 岁左右的人士寻求某一类型的产品，而50 岁人士的购物目 标却完全不同。”Glos 说道，“他们会去路易·威登店买一个 26

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

Sixty eight percent of Chinese travelers say the primary reason they travel abroad is to shop

Global travel retail excellence www.worlddutyfreegroup.com

Asia Pacific Travel Retail Association

Strength in numbers Sunil Tuli argues that the mainland Chinese market is highly accessible to foreign travel retailers - mainly outside China

The Asia-Pacific Travel Retail Association, co-organizer of this week's "China's Century" conference, has a keen focus on the Chinese travel-retail market. But as Aptra President Sunil Tuli tells Asia Duty Free, the China growth story must be seen in the context of developments across an industry in which the key stakeholders must speak with one voice

I

n recent years, travel retailers across Asia-Pacific, and indeed around the world, have been struggling with the frustration of being locked out of China's huge and fast-growing duty-free market. As foreign retailers know all too well, that market is legally off-limits to non-Chinese players, and despite the inroads made into China by foreign firms in the duty-paid channel, and by others operating under supply contracts with Chinese duty-free retailers, what some consider to be the real action remains tantalizingly out of reach.

Well, not quite, says Aptra President Sunil Tuli.

"Who is the biggest operator of downtown duty-free in the world," he asks. Easy enough: DFS. "Why aren't they in China," comes his next enquiry. Another nobrainer: domestic regulation.

Finally: "Who is their biggest customer, anywhere in the world?"

Clearly, mainland Chinese.

And there you have it, in three deftly-put questions: a route-map for travel retailers unable to operate inside China, but looking to tap its enormous potential.

Tuli says that if travel retail's big international players were set on inking supply deals and making other such arrangements with their Chinese counterparts, they would already have established a strong presence in those areas.

The fact that the spread of such arrangements remains limited to a few particularly lucrative hot-spots (such as DFS's supply contract with the Hainan Provincial Duty Free Co, for instance, and Dufry's duty-paid ventures at Shanghai Hongqiao and Chengdu Shuangliu international airports) suggests that until Beijing's barriers to market entry are lifted, or at least eased, the real Chinese duty-free 28

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

action will continue to take place outside China's borders.

"The Chinese are traveling," he says. "They're buying overseas, and they're the most important customers for everybody, whether it's in domestic retail or duty free. You go to the Louis Vuitton store on Paris's Champs Elysees, for example, and half the staff speak Chinese.

"How many Chinese are traveling? Eighty million, 90 million?

It's growing and it's not going to stop for a while. No-one can ignore the Chinese," he says.

So if for foreign retailers, at least, the Chinese duty-free market is an international one rather than one located inside China, so too is the role that Aptra plays in it.

"Nobody's asked us to do anything about [access to the market in China]," Tuli says. "Nobody's said anything about it. If we start talking to members in China, they won't want anybody [such as Aptra] to step in."

Instead, he explains, Aptra's role is first and foremost to represent the interests of Asia-Pacific's duty-free industry in dialogue with government and supranational agencies, the travel industry and other travel-retail bodies, including those in China. And one of Aptra's most important tasks is to rally companies in the industry behind its advocacy activities, such as the self-regulatory code of conduct for liquor retailing that it launched just under a year ago.

Tuli explains that Aptra established its liquor code of conduct last March, as the World Health Organization (WHO) went on the offensive amid proposals for a ban on duty-free tobacco.

"One of the things that's happening with tobacco is that the WHO has come back and said that it's a health issue, which is what they're supposed to be talking about," he says. "But stopping dutyfree sales won't improve world health. Nevertheless, they go after this

Asia Pacific Travel Retail Association

little business of ours, by saying that there's irresponsible sales of cigarettes to minors, and that it promotes smuggling and tax evasion.

"But all that kind of stuff is just silly, because we do none of those things. Regardless of anything that anybody may say, we're probably the most regulated industry in the world when it comes to the sale of tobacco - or of anything, for that matter. Every customer that goes through a duty-free shop is sold a product only when he shows his passport and boarding pass. Does that happen in every 7-11 downtown?"

Tuli says duty-free tobacco is not yet an issue when it comes to China, and hopes that remains the case, but observes that despite the fact the industry has so far managed to hold the line against a global duty-free tobacco ban, the threat may have receded only temporarily.

"You never know," he says, "it could come back again."

It's just that kind of danger to the industry's revenues that Aptra has sought to pre-empt with the code of conduct for liquor.

Tuli explains: "If we have something like that happen when it comes to alcohol, say, in five years we have the 'Taliban' coming in and say

More major players sign up to Aptra Aptra announced that it is forging ahead with its campaign and research activities while celebrating the recruitment of additional high profile companies as association members.

Lotte Duty Free, Moët Hennessy Asia Pacific Pte. Ltd and Paramount Farms have confirmed that they wish to join the Association with immediate effect.

These three recent additions to the membership of Aptra add further weight to the authority of the association which already counts more than 90 major suppliers, retailers, landlords and associations from across the Asia Pacific region among its members.

Aptra will continue its advocacy and research program which is intended to support and protect the duty free and travel retail industry in the region. As announced in late 2012, the association is working on a pioneering training program for retail staff on the principles of responsible retailing.

Aptra President, Sunil Tuli says: “These new arrivals among Aptra’s members is further endorsement of the association’s work and our commitment to ensuring the industry continues to trade unhindered by misguided regulations.”

30

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

we're doing it all wrong, we have this code of conduct so we can say, 'Look, this is what we do: we're selling [alcohol] responsibly, we're not selling it to minors, we're not selling it to people who are drunk, and we're not selling it to people who are mentally disturbed.

"With all these sorts of things, [our members'] staff are very aware of what to do, even when they're doing sampling, they're making sure that they're doing it correctly. If you look at the code of conduct, it's a big document. The main point of it is to make sure that everybody's doing things correctly, so that there are no fingers pointed at us as an industry."

He says that Aptra has helped keep the genie in the bottle when it comes to a possible ban on duty-free liquor.

"It's not as if the WHO wasn't looking at alcohol - it was," he explains. "But we, as an association, were involved in the WHO pulling alcohol off its agenda. We wrote to all the governments and urged all the [travel-retail] operators and members to talk to governments and tell them that it's an important part of the revenues, apart from anything else - and not just our revenues, but also [governments'] revenues - and that people are employed and airports are funded thanks to this to a certain extent. It helps everybody."

Tuli is pleased that there has been no talk of China tightening inbound duty-free alcohol allowances, and says that in addition to global challenges, Aptra also keeps national regulation on its radar.

He emphasizes the fact that national laws can have international consequences for duty-free retailers, citing Malaysian legislation making the possession of cigarette packets without graphic, governmentapproved anti-smoking images a criminal offence.

"If you're flying out of Hong Kong and you buy a carton of cigarettes that has no such pictures on it, and you take it to Malaysia, and someone walks into your hotel room and sees this pack and says, 'Where are those pictures?', unintentionally you have committed a criminal act," he explains. "All because you didn't know about [the law] and bought a pack without those pictures."

Aptra has written to Malaysia's Ministry of Health to request refinements to the legislation so inbound passengers with duty-free tobacco purchased elsewhere do not get snagged by the law.

But Tuli says that Aptra's fight against tighter regulation of its members trade is an uphill battle, and concedes that victories are far from guaranteed.

"In Australia, there's [an inbound duty-free] limit of 50 cigarettes.

Fifty cigarettes is two-and-a-half packets. How do you sell two-anda-half packets to someone at the airport in Hong Kong or Singapore, or anywhere else," he asks. "Hong Kong has a limit of 19 cigarettes. They're just making it more and more difficult. With restrictions on the number of cigarettes coming in, the problem is for the retailers outside [that jurisdiction].

"The whole purpose of this association is to keep everyone in travel retail aware that these are issues that could come up in the future - and that's why Aptra needs more members from China," Tuli says, adding that the association is now also welcoming new members from outside Asia-Pacific, in order to help give firms with a stake in the regional market more of a voice in it. "[Retailers, suppliers, airports, airlines and agents] need to be part of the association - not just to help themselves, but for the sake of the industry generally - to be aware of what could happen, aware of what's being done in other countries and to be prepared."

As the spending power of China's travelers grows and the dynamics of the regional travel retail-market inevitably change, the need for a unified voice on the issues that will shape the industry has surely c never been greater.

TRAVEL RETAIL DEPARTMENT: TRAVEL.RETAIL@LAPERLA.COM

DFS Group

DFS’s Benjamin Vuchot says Chinese travelers are demanding higher quality retail when they take holidays, providing scope for travel retailers to open up new markets

Roots maneuver DFS's return to its Hong Kong origins puts it in pole position to tap a huge and fast-growing market of mainland Chinese travelers

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rom its birthplace in Hong Kong, DFS came full-circle in 2012, sweeping the board in the race for the three core-category concessions at the city's bustling international airport.

It was a heady moment for the global travel retailer, as it saw stiff competition from a field packed with a string of candidates in a bidding process that has been described as one of the most competitive the industry has ever seen. DFS's triple-win of the liquor & tobacco, perfumes & cosmetics and airside general merchandise concessions at Hong Kong International Airport (HKIA) was without doubt its crowning moment of 2012.

Following a nail-biting delay to the tender announcement, that win also came at a hectic time, with just a few months before the endof-year peak holiday season.

"DFS integrated the three categories that it won at Hong Kong International Airport during the last quarter of 2012," says Benjamin Vuchot, DFS Group's Regional President for Asia North. "This saw the addition of 38 stores and over 1,000 new hires, all within a short four-and-a-half-month lead time. Although it was a monumental feat, the mission galvanized the group around this strategic and challenging objective, and it was incredible to see the enormous support that was received from right across [DFS's] business units.

"Moving in went very well, and in fact exceeded our expectations as to how efficiently it [would take] place," Vuchot explains. "This was due to the extraordinary efforts and commitment of the teams, as well 32

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

as the professionalism of the incumbent operators, who helped ensure an efficient handover.

He adds: "We are now focusing on a renovation program that will be completed by mid-year, and which will further enhance the customer experience at HKIA. DFS began operating the airport's liquor & tobacco concession on November 18, and took over the operation of the general merchandise contract and perfumes & cosmetics retail on November 28 and December 12, respectively. And since its move into HKIA, the retailer has wasted no time in bringing in its own enhancements to the airport's retail business.

Among its first initiatives there has been the introduction of a new point-of-sale system, slashing transaction times. DFS is now complementing that system with handheld sales technology to facilitate smoother processing of transactions throughout its operations at the airport.

The retailer's airport strategy is informed by a keen sense of the evolution of the commercial and lifestyle role of airports in recent years, a development that some in the industry are only just waking up to.

Vuchot says: "Airports today are no longer just ubiquitous solutions for travel. They are increasingly destinations within themselves.

Travelers are spending more and more time in airports, and their expectations for being entertained and surprised is increasing. Quality, tailored retail experiences complement the broader ambition of airports to enhance the passenger experience."

“Quality retail facilities are high on the wish list of Chinese travelers when choosing a destination for leisure travel, and this is likely to fuel demand for expansion and possibly open up new markets for travel retail in the future.�

Benjamin Vuchot, Regional President for Asia North, DFS Group

DFS's business model is based on a balance between airport retail and downtown stores, such as its latest citycenter opening, the T Galleria, in the bustling Hong Kong district of Causeway Bay

He says that quality is a "must-have" when it comes to appealing to one of DFS's biggest passenger segments in Hong Kong, Greater China and around the world.

"Quality retail facilities are high on the wish list of Chinese travelers when choosing a destination for leisure travel, and this is likely to fuel demand for expansion and possibly open up new markets for travel retail in the future," he explains. "It is fair to say that the Chinese traveler is a key driver of our business today and, in line with expected increased volumes of tourists emanating from China, this market is destined to continue its importance in [our] market mix."

And Chinese travelers are a market segment DFS has trained its sights on more keenly than ever recently. Just over six months ago,

the retailer opened a lavish new downtown complex in the teeming Hong Kong shopping district of Causeway Bay. T Galleria, as it is known, is DFS's first downtown complex on Hong Kong Island, adding to two others in the tourist Mecca of Tsim Sha Tsui.

DFS has also been busy in the neighboring former Portuguese enclave of Macau.

"2012 was an extraordinary year for DFS Group in Macau," Vuchot says. "We added an additional 40,000 square feet [more than 3,700 square meters] of luxury retail space. This expansion saw the introduction of brands such as Tory Burch and Balenciaga as well as Le Salon - a proprietary luxury watch boutique targeting lovers of timepieces."

But as it sharpens its focus on the China market, DFS's business strategy is all about balance, and ensuring that it has all the bases covered in the fast-changing world of travel retail.

"DFS Group has managed to balance its business model between that of the airport and the luxury downtown Galleria experience," Vuchot explains. "This complementary strategy serves the group well, with a distinct focus on providing solutions for world travelers."

As DFS returns triumphant to its Hong Kong roots, it has proven the staying power of its business strategy, and positioned itself enviably to tap the vast potential of the Chinese travel market on its c doorstep. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Hong Kong International Airport

Cleared for takeoff

AAHK plans to expand HKIA into a three-runway system and has embarked on a three-phase process of planning, approval and implementation for the project (Photo courtesy of Hong Kong International Airport)

Riding strong passenger numbers and with an array of environmental initiatives in the works, Hong Kong International Airport is heading for another successful year

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or Hong Kong International Airport (HKIA), 2012 served as a perfect launch pad for 2013. In 2012, annual passenger traffic increased by 4.7% to a robust 56.5 million, setting the stage for a successful 2013.

According to a spokesperson for the airport, the latest traffic figures, released in December 2012, showed passenger traffic to and from Southeast Asia and Mainland China outperformed other regions, a trend that may continue this year. Cathay Pacific Airways and Dragonair, which are home-based airlines, are still the main contributors to this traffic.

DFS Group Limited is the major duty free operator at HKIA, running the duty free liquor and tobacco, perfumes and cosmetics, and general merchandise concessions. Renowned duty free operators NuanceWatson (HK) Limited and Sky Connection Limited also have stores in other categories in the airport.

Regarding duty free incentives, HKIA often launches various joint promotions and offers with its retailers, including duty free operators. “For example, HKIA previously launched a well-received shopping and dining offer that customers can receive an HKIA cash coupon of HK$100 [US$13] and HK$300 [US$39] when they spend HK$1,800 [US$232] and HK$3,800 [US$490] or above respectively,” says the spokesperson.

Airport Authority Hong Kong (AAHK) recently announced unaudited interim financial results for the six months ending September 30, 2012, which revealed that revenue and profit attributable to equity shareholders rose 8% and 13.1% respectively over the same period a year prior to HK$6,395 million (US$825 million) and HK$2,751 million (US$355 million). “It is worth noting that the retail licenses and advertising revenue saw a 9.8% increase over the same period in 2011,” says the spokesperson.

Grand expansions To meet the airport’s long-term growth demand, HKIA decided in 2012 to expand into a three-runway system and AAHK has embarked on a three-phase process of planning, approval and implementation for the project following the government’s in-principle approval.

“AAHK has started to conduct a statutory Environmental Impact Assessment (EIA), and is firmly committed to carrying out the EIA process in a highly prudent, transparent and professional manner,” says the spokesperson. “AAHK will explore all possible ways to avoid, minimize, mitigate and compensate for the potential environmental impacts that may arise from developing into a three-runway system.”

In addition to these efforts, the company will also include a carbon audit and identify the most appropriate methodology to 34

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

evaluate the social and environmental impact of the planned three-runway system, which the spokesperson says goes above and beyond the prevailing EIA requirements.

In other news, the renovation of the south side of the catering area on Level 8 of Terminal 1, which began last year, has been completed. A Hong Kong-style café, Tsui Wah Restaurant and The Peak Lookout restaurant opened in November 2012 and offer a wide range of international cuisine. The renovation work on the north side is still underway and Jade Garden, a Cantonese restaurant that serves an array of indigenous Cantonese dishes, is set to open soon.

Green achievers In line with the environmental initiatives associated with the runway expansion, AAHK and its business partners operating on the airport island have also been conducting a carbon audit of airport facilities since 2008. AAHK has also applied for the Airport Carbon Accreditation Program, which independently assesses and recognizes the efforts of airports to manage and reduce carbon emissions, and is the only institutionally endorsed carbon management certification standard for airports. “HKIA aims to achieve the ‘optimization’ level—the second-highest level of accreditation of the program and the highest one currently being pursued by airports in Asia-Pacific,” the spokesperson says.

In addition, AAHK launched the HKIA Environmental Responsible Retail Recognition Scheme to recognize tenants of HKIA that take practical steps to reduce the use of energy, minimize waste and separate recyclables. Winners exemplified best green practices in retail and catering operations, such as replacing in-store lighting with energy-efficient LED lights; altering settings for lighting and air-conditioning systems based on operating hours; producing shopping bags with recycled plastic materials; and using reusable containers and wrapping nets for delivering goods.

“Last but not least, we have recently completed the enhancement of the wastewater treatment plant at HKIA,” says the spokesperson.

“The grey water treatment capacity has increased to 330 square meters per day, which is equivalent to recycling the daily water usage of 7,000 four-member families in Hong Kong.”

With several environmental initiatives planned and serviceenhancement renovations in the works, it comes as no surprise that HKIA was named the “World's Best Airport" at the annual TTG Travel Awards and “Best Airport in China” at the Business Traveller China Awards, in recognition of service excellence and operational efficiency. It looks as if the airport will continue to excel in both areas c throughout 2013.

Ever Rich

Already boasting a strong presence in travel retail, Ever Rich is making its presence felt with major new projects

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ver Rich Corporation is one of the world’s leading duty free retailers, offering travelers a wide range of luxury brands and emphasizing quality of service. Over the years, the company has successfully maintained long-term business relationships with numerous suppliers, allowing it to offer a wide range of products in fashion, cosmetics, fragrance, jewelry, accessories and timepieces.

Double duty In February, Ever Rich celebrated the grand opening of its Duty Free Plaza in downtown Taipei and the company’s 18th Anniversary Celebration Ball, both on the same day. Ever Rich’s Duty Free Plaza is the only officially sanctioned Taipei downtown duty free pre-order shop. It features a broad array of brands and standalone luxury boutiques.

“With professional service and a spacious shopping environment, the duty free plaza is expected to be another tourism icon in Taipei,” says a spokesperson for Ever Rich. With ample space available, the new store allows most fashion brands to establish boutique shops, offering customers greater selection. “We would like to provide foreign visitors a better duty free shopping environment and enhance the tourism industry in Taiwan,” says the spokesperson.

The six-storey plaza has a total floor space of 3,344 square meters and offers over 500 brands. The second and third floors—referred to as “Fashion Square” and “Luxury Boutiques” respectively—offer more than 120 fashion brands, along with a number of luxury boutiques and high-end watch brands. The fourth floor, or the “Beauty Life” floor, offers an array of beauty, fragrance and cosmetic Ever Rich’s duty free plaza is the only officially sanctioned Taipei downtown duty free pre-order shop, featuring an array of brands and standalone luxury boutiques

boutiques. The fifth floor is regarded as the “Prime VIP” floor, and can only be accessed by making a reservation.

The plaza also features a diverse range of other duty free products, from alcohol and tobacco to food and confectionery and electronic products. “Customers are able to buy everything they need and want in one stop,” says the spokesperson.

The green outdoor environment and indoor space, featuring a butterfly wing style, help to make the plaza a welcoming place for tourists to visit while in Taipei. “With Taiwan Travel Quality Assurance Association certification, we’re dedicated to providing the best service we possibly can,” the spokesperson says.

Grand gestures With the opening of the plaza behind it, Ever Rich has switched its attention to its next major upcoming project—its Kinmen shopping mall and hotel. Located in the heart of Kinmen at the lakefront of Taihu with ready transportation to the airport and harbors, Ever Rich Shopping Mall and Hotel gives visitors shopping, luxury accommodations, fine dining and entertainment in one spot.

Kinmen, which is pronounced “Jinmen” and means “Golden Gate,” is an outlying island located near China. Known for its beauty, culture and heritage, Kinmen is an ideal site for the shopping mall and hotel. Kinmen is about 10 kilometers from Xiamen, and has a total area of 151.6 square kilometers covering 12 islands.

Kinmen and Xiamen share the same cultural background and similar languages, which has created a unique bond and has made them one of the major transportation links between Taiwan and China.

“After the establishment of ‘Mini Three Links,’ which include direct

The fourth floor of the plaza, or the “Beauty Life” floor, offers an array of beauty and cosmetic boutiques

post, transportation and trade, Kinmen and Xiamen formed a living circle,” says the spokesperson. Citizens from Xiamen visiting Kinmen do not require a visa when the trip lasts less than 72 hours.

With its military presence, traditional Minnan culture and a unique ecosystem, Kinmen has developed many distinct cultural activities. Its location led to its selection for the establishment of an Academic Research Center which hosts meetings between China and Taiwan.

Kinmen and Xiamen are located in the center of the West Coast Economic Zone, which covers Jiangxi province, Zhejiang province, Fujian province and Guangdong province, and embraces a total population of over 50 million. “The connection of Kinmen and Xiamen by the Kinmen-Xiamen Bridge in the future will make this region Mainland China’s ‘backyard garden,’” says the spokesperson.

With the increasing number of visitors from Taiwan and Xiamen, the tourism market is expanding at a rapid pace. According to the 2011 annual report on visitor expenditure conducted by the Tourism Bureau, the average expenditure of each visitor from China is US$270.30 per day, with US$159.90 of that spent on shopping.

“The government has supported the tourism industry by implementing a special tax policy and strengthening the infrastructure of Kinmen,” says the spokesperson. “It is planned and positioned as an international tourism and leisure island.”

Kinmen is closely linked to the flourishing economic zones of the southeast China coast. The government has established Taiwan’s Offshore Islands Development Act, which gives it special tax advantages. “With the support of ‘The Twelve Kinmen Public Construction Projects’ by the local government, multinational corporations are being attracted to invest here to take a further step towards success,” the spokesperson says.

The site area of the shopping mall will cover a total of 22,108 square meters. The total floor area will be 89,871 square meters on six levels. The first two levels will be dedicated to luxury boutiques, while

the third level will feature cosmetics, fragrances, accessories and timepieces. The fourth will offer Taiwanese specialties as well as liquor, tobacco and jewelry. The fifth floor will serve as a supermarket and Kingfond Duty Free Shop, while the sixth floor will house the cinema and food court.

The hotel will feature furnished accommodations incorporating state-of-the-art technology and offering panoramic views of Taihu.

It will also house space for meetings and events with associated facilities and services. Catering to visitor curiosity, the hotel will offer a full range of services and activities for exploring Kinmen, such as day excursions to the nearby islands, personal shopping, holistic activities and culinary outings.

Giving back While it has a full roster of major projects underway, Ever Rich also believes in giving back to the community, and actively devotes time to social welfare and local community concerns. “We believe that ‘as we take from the society, we must contribute to the society,’” says the spokesperson.

In Kinmen, Ever Rich hosts and engages in several cultural festivals and is a big supporter of minority groups, which the spokesperson says helps the company bond with the citizens. Last year Ever Rich participated in the Taiwan Hot-Air Balloon Festival in Taitung, the Kinmen City God Reception Parade, the Ever Rich Children Public Welfare Art Festival and the Penghu Music Festival and many other cultural activities and community events.

“The new Ever Rich Kinmen project will enhance the development of the tourism industry in Kinmen, improve quality of service and make Kinmen an international tourism and leisure island,” says the spokesperson. The spokesperson believes that the improvements now underway constitute an act of giving, both to the citizens of Kinmen and to the region’s future, and will also reinforce Ever Rich’s own c role as an important contributor to the travel industry. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Chinese buying power

Dubai Duty Free's Terminal 3 promotional area celebrating Chinese New Year

A force to be reckoned with

The boom in Chinese travelers means that operators worldwide who aren't targeting these high-spending shoppers are likely losing out BY RYAN WHITE

“O

ver the past decade we have seen an increase in Chinese travelers passing through our stores,” says Dubai Duty Free's Saba Tahir, Vice President of Purchasing. “This is largely due to Dubai International Airport being a major hub for passengers traveling to different regions in the world. As Chinese passenger traffic has grown over the years we continue to see an established pattern of growth in Chinese travelers at Dubai Duty Free outlets.”

Most operators the world over are taking note of the huge increases in Chinese travelers and adjusting their product mixes accordingly, and it's clear to many that airport stores ignoring this important travel trend are missing out. Those late to the party are forgiven, though, as Tahir tells us that a cursory perusal of passenger numbers at Dubai International may not initially raise any flags—Chinese travelers make up only 4% of the traveling population in the airport.

However, the important figure to note is that Chinese are responsible for 12% of the sales at Dubai Duty Free. The operator ended 2012 with total sales standing at US$1.6 billion, meaning that the Chinese spent roughly US$192 million there last year. Indeed, a figure like that should have everyone in the industry—suppliers and operators alike—looking at who they're targeting when it comes to instore promotion and product innovation.

“This is a reflection of a significant average spend,” says Tahir. “This is mainly due to the fact that Chinese passengers are interested in luxury products and often buy in volume in P&C, Cigarettes and Liquor due to the price savings versus the Chinese domestic market.”

Of course, Dubai Duty Free hasn't racked up sales of US$192 million simply because 38

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

Chinese represent only 4% of travelers through Dubai International but are responsible for 12% of sales at Dubai Duty Free's stores

the airport is a major hub and high-spending Chinese travelers happen to be passing by the stores. The operator has done its due diligence and has made a concerted effort to tailor a significant portion of its offerings to this important group of consumers.

“We have changed our product mix to reflect the taste of Chinese travelers,” Tahir explains. “A greater emphasis has been placed on traditional designs from Jaeger LeCoultre, IWC and other brands that the Chinese are interested in. We carry the top ten cigarette brands from China as well as the topconsumed Baijiu.”

In addition to the above products, the most popular brands among Chinese consumers at Dubai Duty Free are high-end skin care brands such as Estée Lauder Advanced Night Repair, La Prairie and Lancôme.

The targeted approach doesn't stop at products. From January 15 of this year Dubai Duty Free featured Chinese New Year-themed stands with Chinese staff and popular products across Concourses A, B and C. Products showcased include Kweichow Moutai, Hennessy Cognac, Chungwa cigarettes and highly sought after perfumes, skincare and electronics brands.

Notably, Tahir tells us that while it's an operator's job to make sure Chinese travelers are targeted, this doesn't mean that purely Chinese brands should be featured. Just as everyone in the industry is adjusting to this welcome trend, she says the Chinese themselves are evolving in their taste as they travel more.

“The Chinese are going through a change of mindset shopping at international destinations,” she explains. “The international Chinese passengers value quality and genuine products much more than the expectation to carry a large number of Chinese brands in the portfolio.”

Canadian hospitality “Vancouver International Airport is known to be the gateway to Asia,” says Freda Cheung, CEO of World Duty Free Group (WDFG) Canada. “Over the last few years the Vancouver Airport Authority has worked strategically to attract more flights destined to China, including Vancouver-Guangzhou operated by Southern China and VancouverShengyang-Chengdu operated by Sichuan Airline. These new routes have generated additional Chinese travelers at our stores.”

Echoing Dubai Duty Free's experiences,

WDFG identified a number skincare brands that are popular with Chinese travelers and has been seeing strong success in this category

Cheung tells us that of all the nationalities passing through Vancouver Airport, the Chinese rank number one in terms of average spend. Important for other operators to note given the general increase in Asian travelers is that Chinese average spend is about 80% higher than other Asian nationalities at WDFG's stores in Vancouver.

WDFG has brought in new brands such as Kiehl’s and Sisley in beauty, as well as premium cognac and whisky in liquor, to cater to the Chinese. Furthermore, health products such as ginseng, vitamins and dried fruits have all been introduced and have proven to be very popular. On the luxury front, higher price point items such as watches in the range of US$30,000 to $40,000 and leather goods in the range of US$5,000 to $10,000 are also very popular with Chinese shopping at WDFG's Vancouver stores.

In addition to bringing in new product, WDFG has also run a number of promotions, including offering free bonus gifts, discount vouchers, lucky draws and scratch and win tickets to engage its Chinese customers.

“There is a Chinese saying,” says Cheung. “'It is better to walk 10,000 miles than to read 10,000 books.' Given the Chinese’s firm belief in the educational value of traveling and the continued economic growth in China, we believe that the growing number of traveling Chinese will be a long-term change.

“This trend has a trigger effect on travel retail, especially on key hub airports in North America such as Vancouver, San Francisco and Los Angeles on the West Coast, and

The Glenlivet Generations 70 Year Old Whisky at WDFG Vancouver-Guangzhou

Toronto and New York on the East,” she continues. “There is much more discussion and focus within the travel retail industry regarding how to best cater to the highspending Chinese travelers in order to improve the customer’s in-store experience and drive revenue growth.”

The extra mile When it comes to catering specifically to Chinese clientele and their penchant for high-end merchandise, it's difficult to think of an airport store that does it better than Le Clos Finest Wines & Luxury Spirits. Head of Le Clos Ben Odgers tells us that identifying the potential importance of Chinese customers to the business was key.

“We were one of the first travel retail businesses to recognize the importance of the discerning Chinese customer, recruiting industry qualified, Mandarin speaking staff in-store, as communication is the key to building relationships,” he explains. “This was rewarded, as news spread within our customer base.”

All of Le Clos' customers can expect a first class experience in store, and the company's luxury proposition particularly resonates with Chinese customers. Odgers tells us that average spend per customer is significantly higher than at many other stores because of Le Clos' largely Chinese customer base.

Word of mouth is important but it can only go so far in growing a business. Le Clos makes a point of literally reaching out to its 150 VIP clients from China through regu-

lar outreach programs. In a move that goes well beyond adjusting the product mix and running targeted promotions, trained Le Clos staff regularly travel to China to visit their patrons in their home cities and host lavish dinners, with wine tastings of course being a big part of each event.

With regard to what its clientele are buying, Odgers tells us that Le Clos continues to see Bordeaux as the key category for both revenue and volume. However, upon spotting the trend earlier than most, Le Clos is developing its Burgundy and Rhone portfolios to service the new-found interest from the East in blue chip examples. Additionally, Le Clos will soon be introducing one of the world’s oldest Moutai based on customer feedback.

On the promotional front, to help celebrate this Chinese New Year, Le Clos is offering up to 30% off a selection of wines drawn from perhaps the world’s most famous and revered estate—Chateau Lafite. “With vintages stretching back to the mythical 1982 and 1979 Magnums direct from their cellars, this is a truly unique offering,” says Odgers.

In terms of the future for Chinese traveling abroad, Odgers believes that they will remain a force to be reckoned with in terms of buying power: “International travel is highly valued and meets the aspirations of many wealthy Chinese people, who also naturally appreciate the opportunity to experience fine wines and luxury spirits. This combination means that this customer group is set to c remain very important in the future.”

In a move that goes well beyond adjusting the product mix and running targeted promotions, trained Le Clos staff regularly travel to China to visit their patrons in their home cities and host lavish dinners

Some of the high-end wines available to taste at one of Le Clos' recent VIP dinners in China

Airline News

Flights to and from every region except China were more than 82% full, resulting in an overall load factor of 82.4% on JAL’s international routes

JAL Group sees passenger numbers surge in 2013 To kick off 2013, Japan Airlines Group (JAL) already has successful results to report. The airline carried a total of 404,681 passengers on its international flights and 1,499,986 passengers domestically during the New Year vacation period in Japan between December 21, 2012 and January 6, 2013.

Passenger count on JAL’s international routes went up 4.1% versus the same period last year, against a 3.2% increase in the number of available seats. Flights to and from every region, with the exception of China, were more than 82% full, resulting in an overall load

factor of 82.4% on JAL’s international routes.

The number of passengers on domestic flights rose 5.8% while seat capacity was 1% lower compared to the same period in 2012. Overall domestic load factor improved 4 percentage points from last year to 67.7%. By region, there was notable increase in travel to Chugoku, Shikoku and Kyushu.

During this period, the JAL Group operated 19 additional international flights to Alaska, Honolulu and Palau, as well as 28 extra flights on various domestic routes.

Cathay Pacific maintains service focus

Cathay Pacific started 2013 off well, following a successful year in 2012. Last year saw a 5% increase in passenger numbers when compared to the year prior. In addition, the airline recently added new routes to India (Hyderabad) and increased the frequency of some of its existing routes.

As for the airline’s inflight sales, Cathay Pacific has noticed an increase in sales on most of its routes, but three in particular— Taipei, Singapore and Seoul. “We have seen a double digit growth in percentage in Q4 of 2012 versus the same time in 2011,” says Assistant Manager Inflight Sales Business Development, Billy Cheung.

Contributing to the sales increase might have something to do with Cathay Pacific conducting customer focus groups with frequent flyers once every Cathay Pacific’s most recent “best picks” online include SK-II Facial Treatment Essence, Lifetrons Switzerland High Performance Ultimate Charger, and LeSportsac’s We Love Hong Kong accessories set

40

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quarter to better understand how products are received onboard. “We conduct customer focus groups on a quarterly basis and inflight surveys specifically on inflight sales once every two years,” says Cheung. The last survey was conducted in 2011.

To enhance its inflight service, Cathay Pacific launched a home delivery service within Hong Kong for passengers in 2010.

Last July, the airline expanded its delivery locations to five other Asian countries— Mainland China, Taiwan, Japan, South Korea and Singapore.

Cathay Pacific routinely lists its inflight “best picks,” which are offered online. Its most recent selection includes SK-II Facial Treatment Essence (250ml), Lifetrons Switzerland High Performance Ultimate Charger and LeSportsac's We Love Hong Kong Accessories Set. Aside from inflight, Cathay Pacific has also

been active with environmental initiatives. In 2012, the airline launched its “Fly Greener” initiative and added shawls from “Good Citizen Movement Workshop,” a not-for-profit organization based in Hong Kong that assists new female immigrants to Hong Kong, to its inflight offerings.

In other development news, Cathay Pacific has added its Discover the Shop catalog to its IFE (inflight entertainment system) in 2012 on selected flights. “The response has been very positive amongst passengers who have browsed through the catalog,” says Cheung.

AirAsia looks to India for future growth Following a strategic review of its operations and future growth plans, Thailand the Philippines. Last year it made its first foray outside AirAsia is looking to India for the next phase of its international expan- Southeast Asia, launching AirAsia Japan in partnership with ANA. sion. AirAsia’s Group CEO Tony Fernandes said India offers the great- A move into the Indian market would fit into its plans to target markets with large domestic populations. est potential for growth.

The group has placed orders for 475 Airbus A320 aircraft, 114 “India is an exciting market and I have been overwhelmed with the developments in the country recently in terms of promoting air of which have been delivered. Fernandes said that India and China travel,” he said. “We will continue to explore opportunities there, will play a huge part in AirAsia’s future growth. but I believe this market offers the most growth potential in terms “Asean, including China and India … has over 3.2 billion [peoof travel.” ple], which is eight times [more] than Europe,” he said. “We see AirAsia already operates subsidiary carriers in Southeast Asian the potential of these markets; hence I am confident our huge airaviation markets outside its native Malaysia, including Indonesia, craft orders will easily meet our capacity needs in the future.”

Qantas linking east-west domestic routes with widebodies

Qantas has announced that it will deploy a 767 aircraft with new interiors and individual inflight entertainment on all weekday flights between Brisbane and Perth starting at the end of March, and deploy its A330 service between Sydney and Perth more than a month earlier than the originally scheduled May launch.

“One of Qantas’ key strengths in the domestic market is our widebody aircraft, which are very popular with our customers,” said Domestic Chief Executive Officer Lyell Strambi. “We will now have widebody aircraft on all weekday flights between the Eastern states and Western Australia.”

Qantas says passengers have liked the new interiors and inflight entertainment on the 767 and the A330 aircraft will have more space and comfort and individual inflight entertainment for all passengers.

“We are also the only domestic airline that offers a meal and checked-in baggage to

every passenger as part of their fare, no matter what time they are flying or which class they are in,” says Strambi.

Qantas is refurbishing 16 767s with new interiors and individual inflight entertainment. Six aircraft have completed the upgrade in Brisbane and are now operational. Qantas’ 767 fleet will have updated cabin interiors, leather seats in Business Class and IFE streamed direct to iPads in every seat in Business and Economy.

In November, Qantas announced that A330 aircraft would be used on all midweek SydneyPerth and Melbourne-Perth flights from May. This date is being brought forward for the Sydney-Perth service. Plans continue to deploy A330s on all weekday Melbourne-Perth flights starting in May. Additionally, Qantas is currently expanding the Qantas Club at Perth Airport and investing in new infrastructure within the terminal as the airline expands its terminal space.

Singapore Airlines renews contract with IFE Services

IFE Services has announced that it will continue to supply Singapore Airlines with Japanese movies. Under the terms of the contract extension, IFE Services will provide latest release Japanese movies to the airline on a monthly basis. The movies will include a combination of popular genres such as comedy, drama, action, thriller and art-house.

Playing on Singapore Airlines’ award-winning audio video on-demand (AVOD) inflight entertainment system KrisWorld, the movies will be available to all customers in First, Business and Economy classes.

IFE Services has enjoyed a long-standing relationship with Singapore Airlines, being the airline’s incumbent supplier of AVOD technical management services across the fleet.

ANA celebrates 60th anniversary with new livery design ANA Group, Japan's largest airline group, recently celebrated the 60th anniversary of its founding in 1952. To celebrate the milestone, ANA held a contest to design a new aircraft livery. Some 7,042 applications entered into the competition from 36 countries.

A short list of nine entries was published in October 2012, with passengers and employees invited to vote for the winning entry, which was unveiled in December. Specially painted onto one of ANA’s fleet of 767-300 aircraft operating on domestic routes, the design marked its debut in the skies in February.

To further mark the occasion, ANA also announced the redesign of uniforms for flight crew and ground staff.

The new uniforms are scheduled to be introduced in Spring 2014.

ANA has publicly thanked its passengers, business partners and employees for their support over the past six decades, and announced plans to maintain customer loyalty and ensure that more passengers from around the world fly with the airline for the next six decades and beyond.

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In Brief Shanghai to offer tax-free shopping for tourists Shanghai is set to follow in the footsteps of China’s resort island of Hainan, becoming the second site on the Chinese mainland to allow duty-free shopping for foreign tourists.

Recent guidelines that set out a clear path for Shanghai to become an international trade center were approved by the Standing Committee of the People’s Congress of Shanghai Municipality on December 26. They allow Shanghai’s municipal government to explore the establishment of a tax-free shopping policy for departing visitors, in coordination with national-level administrations and to scout locations in which to set up duty-free shops.

The tax-free policy for departing travelers was first piloted in Hainan province two years ago, allowing foreign visitors to claim tax refunds if they spend more than a designated sum on certain items.

Indian business body calls for higher duty-free liquor allowance

Trade association the Associated Chambers of Commerce and Industry of India (Assocham) has written to the Indian government to request an increase in the limit on inbound duty-free liquor allowances.

Assocham wants the duty-free liquor allowance raised to 4 liters per passenger from the current limit of two liters.

In a letter to Finance Minister P. Chidambaram, the industry body said a doubling of the allowance would boost India’s duty-free trade in international arrivals, and that the increased limit would add about 3 billion rupees (US$55.8 million) to the government’s coffers.

India currently allows travelers to purchase 2 liters of liquor at international airports, half the allowance in Dubai and the European Union, two-thirds that of Singapore’s 3-liter limit, and less than half the 4.5-liter allowance in Sri Lanka.

Data from the Centre for Asia Pacific Aviation (CAPA) suggests that liquor purchases account for almost 65% of all retail sales at airports, compared with just 17% globally.

In the duty-free channel, liquor is expected to remain the largest single category for at least the next decade, even though its share of total duty-free sales is forecast to decline to 43% from 63% over the next 10 years.

Including revenue from duty-paid liquor, Indian airports could see liquor sales reach a value of more than US$800 million annually by 2021.

CAPA estimates that on-airport duty-free sales in India in 2010-11 were worth around US$215 million - less than 1% of total global sales of US$23 billion, despite the fact that India accounts for around 3% of the world’s airport passenger traffic.

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State-owned travel-retail heavyweight China Duty Free Group will open the first duty-free store in the city, which is expected to be in the Pudong district, as a supporting facility for Shanghai Disneyland, which is due to open in 2014.

“Introducing a departure tax-free policy in Shanghai will develop a sound shopping atmosphere that is of vital importance in turning the city into an international trade center,” said Shanghai’s Vice Mayor Zhao Wen. According to some industry-watchers, however, a departure tax-free policy for foreign visitors to the city is far from sufficient to tap demand for tax-free shopping, as the most significant source of demand remains in the domestic consumer market.

Details of the departure tax-free policy will be finalized at a later date.

The Nuance Group unveils new branding and corporate identity The Nuance Group is celebrating the launch of its new branding and corporate identity.

Unveiling the new look, Roberto Graziani, the President & CEO of The Nuance Group, commented: “Our new corporate identity captures the very essence of what we are, what we stand for and how we want to be seen. To be a truly global brand, we need one voice, one look and a consistent way of doing things with, clearly, the necessary local adaptation. We want to be a global brand with a local touch. And we want to be at the heart of every journey, creating excitement for our customers and long-lasting partnerships with our stakeholders.”

The Nuance vision is “To lead through partnership and retail excellence.” Together with its partners, the company is “delivering exciting retail environments to travelers around the globe. In an ever-changing world, Nuance is developing its business, building strong, lasting partnerships and creating innovative, industry leading retail experiences,” said the company in a statement.

“To be at the heart of every journey is the defining thought at the very core of the Nuance operations,” the statement continued. “The company creates a sense of excitement and anticipation for passengers when they travel throughout the airport. Nuance stores are destinations that customers look out for and return to. Nuance wants to be an indispensable part of the customer’s journey—the essential stop they have to make.”

The new Nuance logo is formed from a dynamic ribbon shaping a globe, at the centre of which is the initial “N” of the company’s original logo. The ribbon represents a retail journey, which, in forming a sphere, depicts the global nature of Nuance’s retail business.

“As a truly global company, Nuance retains a local touch wherever it operates,” the company said. “Under the corporate global umbrella, unique colors have been assigned for each region, demonstrating the importance of local adaptations: blue for Americas, gold for Asia, okra for Australia and green for EMEA.”

Beauty Beat: Fragrances

Fragrance

frenzy Flowers, fruit and foliage set the tone

Valentina Acqua Floreale

by Valentino Company: Puig Description: Inspired by the fragrances of a summer garden, this unique floral scent starts with the freshness of bergamot combined with notes of neroli, followed by a blend of mimosa, jasmine, orange blossom, and tuberose. Accords of amber and patchouli complete the bouquet L’Eau d’Issey Absolue Company: Beauté Prestige International Description: Master Perfumer Olivier Cresp (Firmenich) chose night-blooming jasmine, a flower with an intense fragrance. Lotus flower and freesia accord make up the top notes. Cresp enhances these notes with a touch of tuberose. In the heart of the fragrance, Provence honey absolute plays the leading role and bourbon vanilla absolute and wood accord conclude the juice

Nina L’Eau

by Nina Ricci Company: Puig Description: A fresh, fruity floral fragrance created

by Olivier Cresp, master perfumer for Nina. The juice is enclosed in a soft pink frosted glass apple with silver leaves

Halloween Man Beware of Yourself

by J. Del Pozo Company: Perfumes & Diseño Description: The masculine oriental scent that the company describes as second skin opens with apple martini, violet leaves, grand vert basil and mandarin; followed by the heart that comprises aphrodisiac ginger, cinnamon, lavender and Tunisian orange blossom.

Bottom notes include leather, musks, grey amber and vanilla Peach Blossom

by Tommy Hilfiger Company: Estée Lauder Description: A “lush floriental” scent opens with Italian bergamot set off against a background of white peach and tart and cassis. A floral heart unfolds in the middle with purple iris and mimosa wrapped around a light veil of vanilla. The dry-down consists of musk, tonka bean, and exotic smoked coconut

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Clinique Happy in Bloom Company: Estée Lauder Description: A fresh, frosty floral scent that opens up with notes of yellow plum, a cocktail of frozen fruit, and watery green notes for a crisp introduction. Notes of muguet, white freesia and a mimosa accord from the original Happy lend a tactile nuance of petals. Transparent amber and white wood provide depth with a natural feminine softness

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

The Game

by Davidoff Company: Coty Prestige Description: The aromatic woody juice is composed

by Symrise’s Bernard Ellena in partnership with the Davidoff creative team. It opens on a gin fizz accord, building to a heart of iris, atop a blackwood base

Beauty Beat: Skincare & Cosmetics

tones

Stronger colors, better skincare based on scientific support

Photo courtesy: Guido Mocafico, Clarins

Refined

Double Serum Company: Clarins Description: An antiageing serum that reactivates the five vital functions on which the skin’s youth and beauty depend. In a survey conducted by Clarins of 127 women, 90% agreed that Double Serum is more effective than their regular serum

Absolue Sublime Regenerating OleoSerum by Lancôme Company: L’Oréal Group Description: The serum with nine patents is a blend of oils and texture of serum.

The result is a non-greasy glowing finish. It’s soothing fragrance comprises top notes of cardamom, mandarin and bergamot with the Lancôme rose heart. Base notes include cedar, musk and iris

Rénergie Multi-Lift RevivaPlasma by Lancôme Company: L’Oréal Group Description: Described as a “revolutionary” product, RevivaPlasma combines Multi-Tension technology and the Multi Vital Complex. The company says the formula garners immediate results in improving the quality and vitality of skin

Skin Perfecting BB Cream Company: Artdeco Description: This moisturizing beauty balm consists of SPF 15 and a slight tint. Artdeco offers the cream in shade No. 3, a light beige, and No. 6, a slightly darker color.

This 8-in-1 product is a multi-active, light skincare product “that conjures a perfect, radiant complexion while moisturizing the skin”

Hydra Lip Booster Company: Artdeco Description: New color nuances translucent baby rose No. 37 and translucent wood rose No. 39 impart a trace of color to the lips.

Blue Seakale, a seaweed extract, stimulates collagen synthesis. Hyaluronic Filling Spheres and Marine Filling Spheres make the lips appear smoother.

Collageneer, a combination of active ingredients made from sunflower oil and extract of lupine seed, promotes elasticity

Forever Light Creator

by Yves Saint Laurent Company: L’Oréal Group Description: A breakthrough discovery in glycobiology for an unprecedented skin quality with three benefits including uniformity, translucency and radiance Smoky Trendy Palette Company: Collistar Description: The palette holds three strong powder colors— fuchsia, violet and black—for those who prefer contrasts.

The powders can be used wet or dry, building them with the applicators provided, and their hold is enhanced by the brand new eye primer included in the set

Génifique Eye LightPearl by Lancôme Company: L’Oréal Group Description: For the first time Lancôme has created a serum combining the science of Génifique with a high-performance pearlshaped applicator to make eyes appear more open.

The serum revolutionizes eye contour care and transforms eyes in seven days, says Lancôme Chubby Stick Intense Moisturizing Lip Colour Balm

by Clinique Company: Estée Lauder Description: Packaged in playful crayon-like barrels featuring a new fuller coverage formula with more intense color results. The lip balm will be available at Clinique counters in Asia Pacific

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Vilebrequin

A beautiful

escape

Swimwear leader Vilebrequin maintains its four-decade focus on quality and design

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uxury swimwear company Vilebrequin has been creating quality swim apparel for long enough to understand what the consumer is looking for. With a history that exceeds 40 years, the company has a strong tradition of setting trends in the category.

Vilebrequin was born in St. Tropez in 1971 when the brand invented a new style of bathing suit that offered French elegance mixed with the freedom of the island town’s 1970s spirit. Beginning with men’s swimsuits, which would become the brand’s lifeline, Vilebrequin soon integrated a father-son storyline into the designs that has stayed with the company for years.

“Through the years we have been improving the quality and the comfort of our products, acquiring a unique know-how in luxury bathing suits,” says CEO Roland Herlory.

The company was recently bought by an American company called GIII, the main licensee for Calvin Klein, Tommy Hilfiger, Cole Haan and Kenneth Cole. Following this acquisition, Vilebrequin has its sights set on the American market. “We have big ambitions for the American market—the US and Canada at the same time, and Latin America,” says Herlory.

In addition to expansion into the Americas, Herlory says the company wants to focus on Asia. “We have a strong business already in the Middle East—we are in Dubai, Abu Dhabi, Kuwait, and we are opening in Saudi Arabia,” he says. “It’s a very strong business there; we have many Arab customers.”

The brand’s Spring/Summer 2013 collection will express a sense of

escapism, which is essentially the philosophy of the brand. “Vilebrequin is a beautiful escape,” says Herlory. “Going into our world is like going on holidays, and airports are our natural territory.”

Artistic Director Zaza de Brito has incorporated the storyline of Captain Cook, who discovered the Society Islands Archipelago in 1769, into the designs. The collection pays homage to the culture and traditions of the islands through the emblems of French Polynesia, such as the gecko, the little lizard often seen in Polynesian tattoos; the lagoon-inhabiting stingray; the Ma’o Mauri, or black tip shark; tiaré flowers and others.

The new collection will feature an array of color, from blue to shades of emerald and sapphire, to shades evoking the sky and lagoon. Hibiscus-inspired orange tones alongside black and white have also been used to produce the effect of photographic souvenirs.

The company is also planning to develop a new accessory line this year, including a beach bag line specifically for the duty free market as well as a flip flop line. The accessory line may include some products exclusive to travel retail. “I understand that travel retail is very special and we have to think about travel retail in a different way than we think for domestic retail,” says Herlory.

Herlory feels it is imperative that the history and story of the brand is reflected in the new line. “When you see Vilebrequin, when you see the bathing suits, it’s an immediate escape,” he says. “You immediately jump into holidays, into the beaches and the sun, and that’s exactly what I want to bring to the airports. You’re a businessman, you’re traveling, you’re with your suitcase and suddenly, there’s something like fresh air and you jump into holidays. I want the consumers to think about the holidays.”

In keeping with the theme of escape, Vilebrequin’s products have a travel-friendly nature, as most are easy to carry while traveling. “Even the jacket for example—it goes from a jacket to something you can carry, which is exactly what I want,” says Herlory. “The same goes for the trunks, which you can put in your pocket.”

In other news, Vilebrequin will be developing new furniture and fixture concepts for its stores to further develop the company’s presence in travel retail. The new furniture will feature “a strong style, easy to use for clients and flexible for the operator.”

With all of the novelties Vilebrequin has in the works, Herlory says one thing continues to stay the same—the company’s values and quality. “Today the values are still the same: elegance, fantasy, quality and c comfort.”

Roland Herlory CEO, Vilebrequin

Vilebrequin’s new collection pays homage to the culture and traditions of the islands through the emblems of French Polynesia, such as the gecko, black tip shark and tiaré flowers

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Ferragamo Parfums Ferragamo’s Cheeky miniature collection will be available May

Rising in

the east

Ferragamo Parfums looks to Asia for market acceleration

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he responsiveness of the Asian fragrance consumer is something that took Luciano Bertinelli, CEO of Ferragamo Parfums, a bit by surprise at first—but he’s not objecting. Following the Asian placement of a TV spot for Attimo, a floral/green woody perfume, the consumer’s response was almost instant, Bertinelli says.

“The Asian market reacted immediately to the TV spot and instantly went to purchase the product. We did not expect this result.”As this went to press Bertinelli was planning to follow up on this success with a placement in the China market for, the new feminine fragrance, Signorina, described as “floriental and fruity”.

As other companies are discovering, Asia has incredible potential, and Ferragamo Parfums has responded with strategic development plans. In Japan the Salvatore Ferragamo name is already well established, having built up a network of some 78 boutiques over the past 25 years. However this presence is heavily weighted to Salvatore Ferragamo’s fashion side; the fragrance brand is still a relative newcomer to Asia, having targeted China, Korea and Japan intensively over the last seven to eight years.

Luciano Bertinelli, CEO of Ferragamo Parfums

Besides China, Korea is an important focus for Bertinelli. “Duty free is really important there. We are satisfied with Lotte Duty Free and Shilla Duty Free, who are really focused on their business. We grow constantly every year in Korea.” The success of the Signorina launch in Korea was so outstanding that DFS extended an invitation to Ferragamo Parfums to open more doors around the world, including Abu Dhabi and in markets in the Americas.

China, where Ferragamo Parfums is currently enjoying double-digit annual growth, is already close to Japan in terms of volume. Recent landmarks include an important investment in TV placement targeting the domestic market in China; around 150 million viewers saw the Attimo commercial in Beijing, Shanghai and surrounding areas.

Ferragamo Parfums releases special miniature sets for travel retail every three months, to help increase market presence and brand awareness. “Personally, I strongly believe that travel retail in Asia is a vehicle to sell and increase our brand image,” he says. In September 2011, the company hired a Regional Travel Retail Manager in Hong Kong, who is fully dedicated to travel retail in Asia. In 2013 the company is planning to further strengthen its presence in the area by expanding its travel retail team in Singapore.

Bertinelli also works with travel retail distributor Jonathan Holland to help the brand’s perception and volume.

Asian consumers are especially drawn

to Ferragamo because of the brand’s Italian provenance, Bertinelli says. “We’re proud that everything is made in Italy—the glass, the cap, the packaging is all made in Italy. We have to match the high quality of the fashion side.”

Ferragamo Parfums is only 11 years old, having been built up from scratch by Bertinelli himself. “Every year we try to grow in terms of products and distribution. Today we’re present in the key areas in Asia in around 90% of the places we target to be present in.” There’s still room to grow in terms of shelf space and products, and also thanks to new clients like the Chinese consumers, who weren’t even on the radar five years ago.

“The Chinese learn fast, it’s amazing,” Bertinelli says. “We take three to five years to change our attitudes but they’re so much faster. They’re quick in changing habits.

They love big size fragrances and prefer100ml.

They don’t want something made especially for them, they want to buy international fragrances. They love fresher fragrances.

Compared to other Asian countries, Chinese are more open to different olfactive families.”

The potential Bertinelli sees is simply staggering. He says that currently about 1% of Chinese are using fragrances, while in Europe the figure is around 70%. “Can you imagine the gap?” he says. “The greatest growth is coming from China, 100%. The US is huge for us but next year China will be comc peting with the US.”

The feminine Luxury collection will hit duty free shelves end of April

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Limited Brands VS’s Supermodel Nylon East West Satchel available in black, leopard and pink graffiti

Stylish passport covers are offered in a wide range of colors and prints

All VS’s fashionable sunglasses provide 100% UV protection

Beauty blitz Victoria’s Secret sets

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the pace with new locations, new products

eading specialty retailer of lingerie and beauty products Victoria’s Secret Beauty & Accessories has been active in expanding its duty free and travel retail presence over the past couple of years, with worldwide airport store openings. The brand has also been developing its partnerships with leading operators in major markets, laying the foundation for continued expansion in future.

Victoria's Secret focuses on modern fashion-inspired collections and premium fragrances and cosmetics, headlined by big-name supermodels and trendsetting runway shows. A business of Limited Brands, its network of more than 1,000 Victoria's Secret Lingerie and Beauty stores, supported by the brand catalogue and the brand website at www.VictoriasSecret.com, enables customers to access and shop the brand from anywhere at any time.

Recent airport store openings include London Stansted, a fifth Australian airport location in Sydney, a second store at Amsterdam Schiphol, and other airport openings in Copenhagen, Seoul, Milan, Las Vegas, Athens and Tel Aviv. The duty free and duty paid branded stores carry Victoria’s Secret’s best-selling beauty products as well as an accessories collection that is exclusive to the Beauty & Accessories concept stores.

They also carry a wide range of Victoria’s Secret branded cosmetic cases, small leather goods such as wallets and passport covers, and business accessories 48

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

and luggage in an assortment of colors.

The brand has been reinforcing its market momentum with a number of recent new launches.

Notable among these has been the release of the Victoria Underglass Two-in-One EW Tote, which has been made available in trademark Victoria’s Secret prints, including pink graffiti and oversized leopard. The new VS scarf collection is available in a variety of bold prints and colors, in both silk and viscose. And a new Supermodel Nylon EW Satchel is available in black, large leopard and pink graffiti.

The Victoria’s Secret Travel & Business collection includes a VS Jet Set iPad Cover as well as the iPhone Case, and the highly brandconscious Victoria’s Secret sunglasses collection is available in an assortment of shapes and colorways. All sunglasses provide 100% UV protection and come with a branded hard case.

The new VS Jet Set Foldable Tote packs flat inside a suitcase for short trips and so that travelers can accommodate additional vacation purchases on longer voyages. The new passport covers assortment is available in a wide range of colors and prints, and the covers are designed to complement the VS Jet Set collection. Finally, the new VS Jet Set Soft Spinner carry-on is made in a durable nylon leopard print and features 360° c wheels.

VS’s chic scarf collection is available in silk and viscose

VS Jet Set Soft Spinner is made of durable nylon

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

Hunting World

Hunting World store located in Terminal 2, Pudong Airport in Shanghai

Success with a conscience

Hunting World positions its bags with both consumer and environment in mind as it develops its presence in travel retail

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uxury lifestyle brand Hunting World was established in 1965 by Robert M. Lee, the first Westerner ever to explore areas of the Chinese Pamir Mountains. A frequent traveler, Lee enjoyed taking lengthy excursions to Africa and Western China. During his travels Lee realized the need for a bag that had the capacity to hold everything required when traveling and the ability to withstand extreme temperatures.

After a chance meeting with the manufacturer of tarps used by the French Army during one of his excursions, Lee discovered that adding an inner foam layer to the nylon-based fabric, which was coated extensively with polyurethane or “PU,” rendered it waterproof and heat resistant. It was this fabric that became known as “Battue” and the foundation for the brand.

Since then, Huntingworld set out to produce a male-oriented range of products ideal for travel and adventure. This year the brand plans to increase the number of products for women to further boost its consumer base. “In Japan, 90% of luxury consumers are ladies, so it’s difficult to keep up the business with only products for men,” says Global Business Development Director, Yusuke Kimura.

A result of its largely Japanese consumer base, Huntingworld’s main business in duty free comes from Asia as well as the US, where the brand was established. “Even though 90% of sales come from Japanese customers, the market in Japan is shrinking, so we decided to expand our duty free business to China and Southeast Asia,” explains Kimura.

In China Hunting World focuses more on the male consumer, since 40% of luxury consumers in China are male. To cater to this specific consumer, Hunting World introduced its Sportabout Collection, which features designs inspired by traveling, sports and adventure.

“The main difference from our merchandise in the past is that this collection is really focused on our Chinese customers,” says Kimura. As a result, designs from the collection include sim card holders, as Chinese consumers change sim cards when traveling from Hong Kong and Taiwan. Kimura also notes that a number of the designs feature a large number of credit card slots, which he says is something Chinese consumers look for when purchasing bags.

Geared towards male consumers in their 20s and 30s—the age group in China with the most disposable income—the Sportabout 50

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

Collection also features PVC, a fabric that resembles leather. “Other than leather, the only other fabric Chinese consumers will accept is PVC,” says Kimura. “That’s why we use it. PVC looks like leather, but it can be offered at a more affordable price.”

Aside from this latest collection, Kimura says Hunting World’s Classic Collection “Battue” has always been the brand’s bestseller.

“The philosophy of this brand is adventure and conservation,” says Kimura. “All of the designs in the collection feature vegetabletanned leather, which eliminates the use of chemicals and is better for the environment,” he says.

In addition, the self-proclaimed nature-loving brand donates US$1 per bag purchased from the Classic Collection to the Borneo Conservation Trust (BCT), which helps prevent environmental degradation of Borneo Island, the native habitat of Bornean pygmy elephants. Donations are used to purchase land with the objective of recovering natural corridors for the animals to migrate freely, as currently the land is being increasingly occupied by oil palm plantations. Hunting World has been supporting BCT since 2008.

Presently Hunting World doesn’t have any major developments in the pipeline, mainly because the brand is preparing for an important event in 2015. “We’re deliberately not doing anything right now because 2015 is our 50th anniversary, so we’re busy preparing,” says Kimura. However; in terms of news, he shares that Hunting World’s belts and wallets will be listed on Air China, Hainan Airlines and China Southern Airlines beginning in April.

With Japan already established as the brand’s main consumer base, Hunting World will continue to develop its duty free presence in several Southeast Asia countries. In addition, the brand might begin developing its presence in the European domestic market as a means of entering the duty free market in the Middle East. “We haven’t opened a boutique in Europe yet, but we are distributing through high-end multi-brand stores in Italy,” says Kimura. “In doing this, we may gain the interest of retailers, which will help us build the brand domestically, after which we can enter duty free in the Middle East.”

With its 50th anniversary ahead and plans to enter new markets, Hunting World has a lot to look forward to in the years to come. c

LeSportsac

Beyond the

The “Abbey Carry-On” featuring one of the brand’s new techniques— “Jamboree”

bag

With almost 40 years behind it, LeSportsac is on top of its game when it comes to the bag and luggage category

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ith its 40th anniversary less than a year away, LeSportsac has good reason to start the celebrations early. First launched back in 1974, the selfproclaimed quintessential American-lifestyle brand of casual nylon bags, known for its lightweight fabric and variety of colors and prints, entered the travel retail market 15 years ago and has over the years maintained a strong presence thanks to key partnerships with airlines and airports.

"Japan Airlines is our best performing airline," says Sales Director Masaru Watanabe. "We have a long history with them." LeSportsac also recently teamed up with Cathay Pacific, adding to the brand’s airline partners, which includes Korean Airlines, Eva Airlines and China Airlines, among others.

As for airports, Watanabe says the brand is divided territory by territory. "In Asia, airport-wise, we have more than 100 point of sale (POS) locations, we have POS’ in Japan, Korea and China to name a few."

Although LeSportsac is based in the US, the brand's largest region is currently Asia. "Roughly speaking, including local markets, 40% of our sales come from the US and 50% comes from Asia," says Watanabe. "We are an American brand based in New York with shops on Madison Avenue and in Soho, so we are very strong in the US, but in time we really developed our Asia business, and now we are very strong in Asia."

LeSportsac’s Spring 2013 Collection adds two new techniques to the brand’s already existing—and successful—Classic collection: “Print Blocking” and “The Jamboree.” The Print Blocking technique involves alternating the “Pop Hearts,” “Sweet Time” and “Swan Song” patterns on LeSportsac’s classic bags. The Jamboree technique involves a more subtle approach to the same trend by exhibiting different flower patterns on the same print. A “Flirty Flower” pattern, which is covered in sequins, is also used.

In terms of new patterns, the Spring 2013 collection will debut LeSportsac’s new “Windowpane” print, offered in black and taupe. Continuing the brand’s use of a “debossedon-patent” technique, where patent nylon fabric is decorated with an indented design, the new collection also launches bright “Raspberry” and casual “Driftwood” colors. Also new in the pattern department are “Mademoiselle” and “Trapeze,” the latter featuring flower cut-outs.

The new collection introduces ten new lifestyle bags, including the iPad Crossbody bag, which is easy to wear over the shoulder; the Abbey Weekender; the Crossbody Wallet for evening The “Scarf Tote,” wear; the “2 Strap Pixie”; the “Boom- featuring the “Scarves print” from LeSportsac’s box Bag”; and lastly, the “Shore Bag” for Classics Collection vacation getaways.

The “Everygirl Tote” from the Disney It’s a Small

Watanabe says the Classic World by LeSportsac collection, featuring the collection is the brand's “Well Wishes” print bestselling product group, because it offers basics which can be custom designed by the consumer. "Every month we develop seven to eight prints and our customers can select the design and the style combination," says Watanabe.

"We have a catalog that the customer can select the design from— pick the style, pick the print.”

The catalog features small pouches, travel cosmetic pouches, shoulder bags, handbags, tote bags, and backpacks.

"This kind of collection is good for travel retail—it covers all consumers’ needs," says Watanabe. "We concentrate heavily on this collection as most of our sales come from here—more than 70%. Almost 80% come from the Classics." Since the Classic collection is already well known and very popular, LeSportsac uses the industry's exhibitions as a platform for displaying something new and different.

Also doing well for the brand is the Disney It’s a Small World collection by LeSportsac, which was released in Fall 2012 and pays homage to the Disney theme park of the same name. "The collection is available onboard and it's doing very well," says Watanabe.

Disney artist Mary Blair created collages using various media forms to capture her interpretation of Holland, artistically depicted in the collection that consists of a total of 12 styles, including totes, weekenders, book bags and tech items. The collection includes five "seasonal deliveries," each inspired by a different country. Each delivery will have a signature tote and colorful print that echoes the architectural works of the Disney theme park.

As for airport advertising, LeSportsac has a distributor for each airport. "Sometimes we propose—or they propose—an opportunity to have an advertisement," says Watanabe. "We discuss promotions with each distributor." Regarding airport news, the brand recently opened a 30-square-meter pop-up shop in Taipei’s Taoyuan International Airport.

With 2014 and the brand's 40th anniversary on the horizon, Watanabe says LeSportsac is planning something very special in travel retail, but preferred not to reveal exactly what it c involves just yet. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Aigner

New again

Building on its history in travel retail, Aigner’s new releases merge traditional and modern

L

eather lifestyle brand Aigner is well positioned in travel retail markets, having had an unusually longstanding presence in the channel. “We’ve been here for 30 years,” says CEO Sibylle Schön. “For that time period it was very unusual.

I have a lot of customers, especially in Asia, who have been with us for 28 years.”

Originally founded in Munich in 1965, Aigner quickly gained traction in leather wear, and made its first forays into travel retail in its home turf of Germany, as well as in Asia. “We have a healthy business in duty free,” Schön says. “We’ve increased 15%. We do a healthy airline business as well—we’re covered on almost every airline worldwide.”

Aigner does a lot of work in Asia and the Middle East. Sales in Dubai are doing extremely well. “The Middle East is important and will become more and more important,” Schön says. She describes Aigner as extremely well known in this market. “We’re a luxury and high quality brand. One point that’s very important is that we’re a German brand and we are authentic. We do a lot of made in Italy. There’s a certain trust in our name and product and this reputation lasts with people.”

Bestsellers include the Icon bag line. Schön also singles out the successful Piccolina collection for its “nylon leather” construction.

“You can’t make a bag so light with just leather,” she says. “Travelers don’t have a lot of time, they just pick it up—grab and go.” At US$100-$250 the pricing provides a good entry point for the travel retail consumer.

Aigner’s Spring/Summer 2013 collection takes its design cues from the French royal court of the 18th century, with “baroque elements interpreted in a modern way.” Aigner Chief Designer Christian Beck has also incorporated the vibrant graffiti and street art found in global capitals of fashion, merging modern ideas with floral patterns and ornamental feminine details. The collection incorporates top-quality leather and workmanship along with leading edge design.

According to the press release announcing the collection, “the new models for the summer convey individuality and sophistication.

Throughout the collection Aigner draws inspiration for metal detailing from the equestrian world, according to its brand symbol, the horseshoe, which is a symbol of good luck. The expression of form is clear and significant.” Edges have been emphasized, while complementing softer styles. Short-handle bags are one of the collection’s main notes. In addition to the “Marie” bag, named for Marie Antoinette, the “Daphne” shopper takes its name from one of the current icons of fashion and culture, Daphne Guinness.

Aigner remains a closely held family business. “We belong to a family in Munich—the company is on the stock exchange, but 95% is held by a single stockholder,” Schön says.

The company follows a philosophy that Schön describes as similar to other familyowned luxury brands. “We fulfill a niche c demand.”

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Sibylle Schön, CEO, Aigner

Aigner’s Spring/ Summer 2013 collection takes its design cues from the French royal court of the 18th century

Bestsellers include the Piccolina collection which is known for its “nylon leather” construction

Finest Swiss Praline Creations Since 1887, Chocolat Frey has been creating tempting chocolate dreams and pralines to the highest standards. The No. 1 chocolate manufacturer in Switzerland follows a recipe for success based on tradition, innovation and a passion for perfection. Real premium chocolate, 100% Swiss-made!

Confectionery News

Asian contenders

Royals in e at acadamia Paton’s M vored milk chocol -fla Cointreau

Leading confectioners vie for more of the Asian market BY HIBAH NOOR

Paton’s pushes for

a bigger presence

A

ustralian confectioner Paton’s is riding the momentum of a series of recent and new launches in Asian travel retail. In addition to Paton’s Salted Macadamia Royals, Paton’s Salted Almond Royals and Paton’s Cointreau Royals, the brand is also launching the newly revamped Suncoast Gold roasted and flavored premium macadamia range, especially the 75g range in Abalone and Wasabi flavors.

It’s all part of a concerted effort to expand the Paton’s footprint in the attractive Asian market, says Stuart Redman, Head of Marketing and Innovation. “Paton’s sees China as a continually developing marketplace, with many opportunities to help grow our customers’ travel retail business using both confectionery and snacking products.” China also remains a key market for the premium quality Paton’s Australian Macadamia product range.

The new Paton’s Cointreau Royals features none other than French liqueur brand Cointreau, one of the most famous liqueur brands in the world. The new product was released into the global travel retail channel in August. The confections consist of Paton’s toffee-coated whole macadamia nuts dipped in milk chocolate flavored with Cointreau. They are offered in a premium 170g gift box.

The Cointreau Royals launch followed the successful debut in May 2012 of Paton’s Salted Milk Macadamia Royals and Paton’s Salted Milk Almond Royals, also offered in a 170g form factor. The brand’s Royals collection also has two new formats: a large 330g Paton’s Macadamia Royals in Milk Chocolate containing 30 pieces for premium gifting and a two-piece flow-wrapped 22g Macadamia Royals in milk or dark chocolate.

Anthon Berg’s brand universe store at Copenhagen Airport

Salted Royals sees a sprinkle of salt added to the toffee in which the nut is encased before it is dipped in chocolate

Redman says global travel retail has become increasingly competitive as major chocolate brands seek to make up for depressed domestic markets in Europe and North America. “With significant pricing promotional activity and new offers, especially for travel retail, the traditional ‘souvenir’ gift is under more pressure than before,” he says.

Anthon Berg

presses ‘play’ in Asia

G

enerosity may be its own reward, but confectioner Anthon Berg has proved that it can bring some definite market payback as well. The brand’s “Generosity” campaign, which encourages confectionery consumers to buy for gifting, has garnered worldwide attention with a unique initiative in Copenhagen Denmark, where a pop-up store selling Anthon Berg chocolates accepted only acts of generosity as payment.

“We’ve done consumer testing in Asia and the concept has tested extremely positive,” says Travel Retail Director Tomas Bruun. “The brand opens up to a brand new way of doing promotions, and we have the whole setup ready to go and The “shaken and stirred” line extension are ready to strike when our customers of the Chocolate give us the opportunity.”

Cocktails is now in liquid form and features Asia represents a great opportunity, a new cocktail, “The Bruun says, especially in the context of Kicking Mojito”

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Enjoy the Chocolate Side of Life

www.Lateltin.com

Confectionery News

softening markets elsewhere. Anthon Berg’s strategy is to grow the region as a whole. Elements of the strategy include plans to develop the domestic side, taking advantage of the price positioning and travel exclusives that differentiate the travel retail offering.

Upcoming for Anthon Berg are two new travel retail products.

One is a “shaken and stirred” extension to the Chocolate Cocktails chocolate bottled liqueur line called “The Kicking Mojito.” This new entrant, which features a liquid rather than creamy filling, is accompanied by the Strawberry Daiquiri, the Margarita and the Cosmopolitan, all of which are now in liquid form. All are launched

in three sizes, tailored to formal gifting, intimate gifting, self-indulgence and hostess/host gifting purchases.

Anthon Berg is also extending its Sweet Moments line with “Sweet Moments Milk Chocolate.” The launch reflects the results of market research that shows consumers retain a strong preference for milk chocolate, with vanilla the favorite accompanying flavor.

Quickness of response is probably Anthon Berg’s strongest suit.

“In travel retail as well as domestically, we’re ready to ‘press play’ whenever and wherever the opportunity is present,” Bruun says.

Butlers

accents innovation

T

he Asian presence of Butlers Chocolates continues to grow, says Sales Director Karl Marnane. “We have only really moved into the Butler’s new deluxe sharing pack, featuring twist wrap chocolates in an array of flavors Asian market since 2010 and we have seen excellent growth during this time,” he notes. “We’re bar and a 300g dark chocolate whiskey truffles sharing pack. currently listed in 12 airports around Asia, where we are finding that New product development centers on the sharing segment, Marthere is an increasing demand for high quality premium chocolate nane says. Building on the success of its travel retail confectionery range, the brand has just introduced a set of six deluxe sharing packs, and confectionery. As such our listings are growing steadily.”

New product development is the core growth strategy for But- each featuring twist wrap chocolates. The varieties are milk chocolers in all of the markets it serves, and the company has a number late honeycomb crisp, milk chocolate caramels and hazelnut praof new products underway for travel retail. For Asia, this includes a lines, milk chocolate salt caramels, dark chocolate mint fondants, special box celebrating Chinese New Year along with other premilk chocolate mango truffles and white mixed berry chocolates. mium gift and sharing packs. Marnane singles out the redevelop- “This launch will be supported by HPP in certain locations,” Marment of Butlers Chocolates with the Jameson Whiskey range, which nane says. “In addition, we’re looking forward to introducing our includes milk chocolate whiskey truffles, a new 100g dark chocolate extended Jameson Whiskey range to the Asian market.”

Godiva garners Asian growth

B

elgian chocolatier Godiva plans to continue the rollout of its travel retail store concept worldwide, says CS Lam, Travel Retail Regional Director Asia Pacific. Lam, who is speaking at the TFWA Conference in Beijing in March, describes the new design direction as “a contemporary interpretation of the brand, marrying European luxury with the rich Belgian heritage of Godiva.”

Godiva already has nine new branded boutiques in Asia and will open a Godiva Café later in the year. The brand’s travel retail business in Asia has shown double digit year-over-year growth, Lam says, noting in particular the performance turned in by Korea, Hong Kong and Thailand in 2012. “Together with our rapid domestic development in the region, especially in China, Godiva continues to reinforce its leadership position in premium confectionery through product innovation, new shop/fixture design and innovative trade marketing programs,” Lam says.

Lam notes that while retail buying trends vary from region to region, one notable trend has been the strong move toward product segmentation. “Retailers don't just buy confectionery as a single product category,” Lam says. “They split the product into segments such as premium, informal gifting, children's, snacking and sharing, etc. The allocation space in the shop depends on the individual product 56

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

segment and its success, for example sales revenue per square foot.”

Lam says the new “Chocolats Exotiques” and new core truffle range are standout travel retail exclusives. Godiva strives to stay ahead of the curve with new collections and limited exclusive offerings such as seasonal collections centered on celebrations such as Valentine’s Day, Mother’s Day and Christmas. In Asia, Godiva is also focusing on Chinese New Year.

This year Godiva has a number of new initiatives in the works, and Lam says the new Chocolats Exotiques collection, created by Chef Chocolatier Patrick Peeters, reflects the trend of pairing food with selected fruits and Asian spices. “The result is a unique taste and texture that you will only find on the dessert plate of a top restaurant,” Lam says. Also, the Truffes Collection will be revisited with a modern twist, featuring new-design gift boxes that reflect the c collection’s luxury positioning.

Godiva’s new Chocolats Exotiques collection featuring double layered chocolates that combine a fruity ganache with a crunchy texture

Catering to Asian travelers

Tradition meets

innovation

The combination of high-end tequila, coffee and chocolate flavors makes Patrón XO Cafe Dark Cocoa accessible to virtually anyone while still providing something distinctly new for discerning palates

From new variants of tried and true favorites to spirits that haven't traditionally been popular in Asia, suppliers are pulling out all the stops to catch travelers' eyes

A

“

sia Pacific is our fastest growing market,” says Patrón spokesperon Greg Cohen. And while tequila hasn't traditionally been seen as a popular spirit to market to Asians, Patrón is breaking stereotypes, largely as a result of some new releases and a reputation for producing ultra-premium, sophisticated spirits.

Patrón's most recent innovation is a chocolate and coffee liqueur called Patrón XO Cafe Dark Cocoa. The product is a line extension of the highly popular Patrón XO Cafe. Both are noted for their uniquely dry—as opposed to sweet—taste, due in large part to the high quality Patrón Silver tequila used in their production.

Patrón XO Cafe Dark Cocoa goes one step further than its predecessor by introducing an extraordinary chocolate flavor to the light essence of coffee that has already proven popular with consumers around the world. This combination of highend tequila, coffee and chocolate flavors makes the variant accessible to virtually anyone while still providing something distinctly new for discerning palates.

“Our duty free business in Asia Pacific was up significantly in 2012, led by 104% growth from Patrón XO Cafe,” says Cohen, and although Patrón XO Cafe Dark Cocoa is still relatively new on the market, the company is expecting a similarly strong performance.

Of course, Patrón is much more than a one-trick pony and Cohen tells us that there is a lot of potential for the company's entire portfolio of ultra-premium spirits in Asia. For example, despite Asia often being considered a brown spirits market, cocktail culture has been steadily gaining pace in major metropolitan areas and Patrónowned Ultimat Vodka saw sales increase a hefty 63.4% last year. Furthermore, Cohen says that Patrón's tequila lineup continues to do well in the region, largely as a result of the focus on quality and tradition associated with its production.

“People in Asia are increasingly recognizing that a high-end tequila like Patrón is an ultra-premium, sophisticated luxury spirit,” he says.

And speaking of luxury spirits, Camus has a reputation for producing some of the world's best-loved cognacs. Family Legacy, the latest addition to the Camus family, is a fitting marker of what this cognac brand has become since its inception in 1863.

Cyril Camus, President of Camus, tends to agree that a combination of tradition and innovation is the best way to reach consumers: “A great cognac is born of a father, a grandfather and a great-grandfather who were able to pass on an ancient culture of the art of distillation and aging whilst adding a touch of the contemporary,” he says.

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Patrón Silver, the spirit that started a revolution in the way the industry views tequila

Just like every Camus' cellar master in the past, the current cellar master selected five crus—Grande Champagne, Petite Champagne, Bons Bois, Fins Bois and the famous Borderies—and delicately combined them into eight blends aged in French oak barrels to produce a subtle union and attain the perfect degree of 40.8% vol.

The most remarkable feature of Family Legacy, says the company, is the way it “methodically, patiently and subtly adheres to the ancestral rules of perfect blending—a legacy of past expertise recorded in the cellar master’s 'cahier de coupe' for posterity since the 19th century.

“Since time immemorial we have followed the recommendations of Edmond and Gaston Camus, which suggest aging in fine-grained, pale-colored barrels to attain the required degree of perfection,” says the company.

Family Legacy is described as an amber cognac with sparkling hints of gold, with a velvety, complex aroma of tangerine, violet and oak fading into smooth labdanum (Mediterranean flower), notes reminiscent of haute couture perfume.

Rich and generous on the palate, it builds on hints of crème brûlée Important for Asian gifting sensibilities, Camus' Family Legacy is contained within a refined decanter adorned with a crystal stopper and nestled in a soft touch case

Brugal 1888 rum is attracting very favorable reviews in Asia following its launch in the summer

From July to September, Brugal was featured in a highly successful tasting promotion at the Tasa Meng departures shop in Terminal 2 at Taiwan Taoyuan International Airport

to create wonderful length from dried fruit notes and a lingering, balanced finish. Important for Asian gifting sensibilities, the cognac is contained within a refined decanter adorned with a Crystal stopper. Nestled in a soft touch case with contemporary styling, Family Legacy is fits perfectly with Camus' mantra of offering consumers “the finer things in life.”

Something completely new As mentioned, cocktail culture is growing in many parts of Asia and Canadian gin Ungava sees a lot of possibilities in the region's travel retail market. “Ungava gin has a unique look and taste, which is ideal for duty free, whether it is a gift for a loved one or a selfpurchase,” says Richard Bush, Marketing Manager for Ungava.

A clear indication that distributor Camus believes Ungava is perfectly suited to the region is the fact that the brand was introduced last year at the TFWA AP exhibition in Singapore. Indeed, while it's something completely new on the scene, the familiar theme of tradition is still very much a part of Ungava's story.

With total respect for the environment and Inuit traditions, the rare plants and berries that impart Ungava gin’s unique bouquet are picked and selected by hand.

Using only 100% natural ingredients, the gin is infused with Nordic Juniper, Wild Rose Hips, Cloudberry, Crowberry, Arctic Blend and Labrador Tea, ensuring that Ungava Canadian premium gin has both a distinctive color and a fresh, floral and spicy flavor.

To peak the interest of consumers even more, Ungava has developed a very special edition that also pays tribute to Inuit tradition. In selected airports In selected airports travelers will soon be able to find Ungava gin nestled in a limited edition faux fur bag.

travelers will soon be able to find Ungava nestled in a limited edition faux fur bag.

“We were so excited when we walked along the Croisette in Cannes back in October, because all of the winter collections from the big designers seem to feature faux fur,” explains Bush. “We've already started to ship these to some of our customers. It will be available in the coming weeks in Singapore Changi, Panama, Uruguay and in the US at International Shoppes Terminal 1 store at JFK, among others.”

Only 5,000 units are available, making this truly a collector's edition. The bottles come with a neck hanger leaflet which tells all about Ungava— its unique botanicals, where they come from and how to serve the gin. Notably, the leaflet also features a number of cocktail recipes so that travelers can dazzle friends with high-end drink creations when they arrive home.

Although rum is another spirit that has traditionally been niche in Asia, Brugal 1888 is attracting very favorable reviews in the region following its launch in the summer. In fact, the premium rum was awarded a Gold Medal in the inaugural Cathay Pacific Hong Kong International Wine & Spirit Competition just months after its launch in Asian markets.

“Brugal 1888 is being accepted readily in Asian markets and it is proving to be a key to open new doors,” says Irene Serrano, Brugal's International Brand Manager. “This award is the recognition of its high quality and it will help to increase awareness of Brugal within the industry.”

The award-winning Brugal 1888 rum was unveiled in Hong Kong and Macau in June by Jassil Villanueva, Master Blender and a member of the fifth generation of the Brugal family. From July until September, Brugal was then featured in a highly successful tasting promotion at the Tasa Meng departures shop in Terminal 2 at Taiwan Taoyuan International Airport. Importantly, the initiative was intended to introduce consumers who might normally choose fine cognac or malt whisky to the refined taste of Brugal 1888.

“The launch of Brugal in Taiwan duty free has been very successful,” says Claren Wong, Regional Marketing Manager for Brugal brandowner The Edrington Group. “The tasting activity encouraged people to try Brugal 1888.”

While Wong notes the obstacles that a rum brand faces when entering the Asian market, it's clear that The Edrington Group believes the region is rife with consumers who are ready to try something new: “The challenge we face in Asia is that the majority of Asian consumers drink whisky or cognac,” Wong says.

“The rum category is still in its infancy in Asia so education is required to help consumers to understand the category. We will continue the investment in brand activation with education and tasting activity to support c the brand growth.” www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

59

Diageo GTME

Positioned for growth BY

The Gold Route is the second release in the Johnnie Walker Explorers' Club Collection and will be launched this year

RYAN WHITE

Diageo focuses on innovation across Asia Pacific duty free to ensure Johnnie Walker maintains its leading position as the Scotch of choice for Asian travelers

The release of John Walker & Sons Odyssey marks the 80th anniversary of one of Sir Alexander Walker’s most remarkable innovations—a whisky decanter that could move to match the motion of the sea

D

iageo, the maker of Johnnie Walker, the world’s leading blended Scotch whisky, has an impressive history of bringing exciting new products to market.

From Baileys Original Irish Cream to the more recently launched Johnnie Walker Double Black, innovation forms a crucial part of Diageo’s growth strategy.

Innovation catches the imagination of consumers and ensures that brands are well positioned for continued growth, says the company. Just like its flagship Johnnie Walker brand, Diageo embodies a pioneering and progressive spirit, constantly evolving to meet the changing needs of shoppers in travel retail.

Targeting Chinese travelers In September last year Diageo launched a spectacular new, award-winning blend specifically designed to meet the needs of the emerging Chinese luxury traveler. Inspired by the vision and entrepreneurial spirit of 60

ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

Sir Alexander Walker, John Walker & Sons Odyssey marked the 80th anniversary of one of Sir Alexander’s most remarkable innovations—a whisky decanter that could move to match the motion of the sea. Today, this extraordinary decanter and unique blend have been re-envisioned as John Walker & Sons Odyssey.

Steve White, Marketing & Innovation Director of Diageo’s Global Travel and Middle East business, said: “This exciting new innovation demonstrates our commitment to meeting the unique needs and evolving tastes of the luxury consumer in travel retail in China and beyond.”

This exquisite Blended Scotch Whisky has already won plaudits within the industry, both for its packaging as well as for the exceptional quality of the triple malt. The luxurious decanter and nautically inspired packaging was awarded the highly regarded Prix du Jury from Formes de Luxe at the Monaco Luxe Pack, beating all forms of luxury design in any category. John Walker & Sons Odyssey was also recognized in July with a gold medal at the prestigious International Wine and

Spirits Competition (IWSC). This honor places John Walker & Sons Odyssey in the company of some of the finest and most established whiskies in the world—an amazing achievement for such a new spirit.

“John Walker & Sons Odyssey is a true celebration of life’s great journeys. In addition to paying tribute to Sir Alexander, it also honors the game changers who have inspired a generation, setting new standards and becoming role models within their communities and creating positive change in the world around them,” White added.

To launch this exclusive product, John Walker & Sons hosted a series of iconic events aboard the luxury yacht, John Walker & Sons Voyager, which journeyed across Asia and the Middle East, immersing consumers and customers in the brand’s world of quality craftsmanship, heritage and modern innovation.

In October, Asia travel retail customers were treated to an ultimate on board luxury event in the dramatic setting of Hong Kong harbor. The highlight of the event included a tasting of the award winning triple malt.

“John Walker & Sons Voyager is designed

Johnnie Walker Blue Label The Casks Edition is crafted from some of Diageo’s rarest casks—each noted for their intensity and depth of flavor

Steve White, Diageo’s Marketing & Innovation Director, explains Johnnie Walker Explorers’ Club Collection at the launch in Cannes last year

The Spice Road is an evocative expression of the spices, colors and fruits that the Johnnie Walker agents would have discovered on their routes around Asia

to be the ultimate luxury experience for premium spirit connoisseurs in this region, if not the world,” says White. “We took the opportunity of its visit to Hong Kong to create a unique event for our Asia Travel Retail customers and demonstrate our commitment to working with them to further premiumize the travel retail channel in Asia.”

Focusing on premiumization Diageo’s sharp focus on premiumization saw the launch in May last year of the successful Johnnie Walker Blue Label The Casks Edition, a bold limited edition release of the company’s iconic blend. Crafted from some of Diageo’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 is a tribute to the perfect harmony of the oak casks used in the blending of Johnnie Walker Blue Label. The product was launched as a duty free exclusive, offering differentiation for

shoppers in the global travel environment.

Building on these successes, at TFWA World Exhibition in Cannes last October, Diageo revealed their largest ever investment in the travel retail channel with the launch of the Johnnie Walker Explorers’ Club Collection, which brings to life the brand’s unparalleled links with exploration and travel.

This major new global branding and marketing initiative is exclusive to the travel retail channel. The concept is based on the spirit of the “Travellers’ Room,” established

by Alexander Walker in the City of London in the 1890s. This was located close to the shipping houses and docks from which its agents journeyed the world and gathered to exchange stories from their travels, offering inspiration to the company’s master blenders.

The first whisky in the collection is Johnnie Walker Explorers’ Club Collection – The Spice Road, an evocative expression of the spices, colors and fruits that the Johnnie

Walker agents would have discovered in the thriving markets on their routes around Asia.

It is now available in duty free stores globally at a recommended retail selling price of US$43.

Master Blender of Johnnie Walker Jim Beveridge commented: “We specially selected whiskies to create a bold blend of intriguing complexity inspired by the richness of this part of the world. There is a spicy zestiness on the nose balanced by fresh citrus. The smooth, rich and honeyed flavors on the palate, warmed by cloves, ginger and vanilla sweetness, give way to a smoldering finish of the Johnnie Walker smoke signature.”

The packaging around the iconic square bottle—a shape originally designed to reduce breakages during shipping—has taken similar cues, with a rich color palette and embossed pattern reminiscent of decorative Asian paneling. Two more variants will launch over the next six months.

The Johnnie Walker Explorers’ Club will see the Johnnie Walker and John Walker & Sons Blended Scotch Whiskies displayed in new high-visibility globe-shaped wall bays in travel retail outlets as well as experiential pop-up clubs in selected leading airports and will be supported by striking advertising and activations.

The new initiative will fully differentiate the Johnnie Walker travel retail offering from its domestic offering by bringing to life the brand’s unparalleled links with exploration and travel, which saw it journey from a small shop in Scotland in 1820 to the four corners of the world.

Johnnie Walker Explorers’ Club Collection demonstrates Diageo’s key strategic focus on differentiation to deliver truly different offerings which capture the imagination of travelers and make travel retail one of the most exciting retail environments for consumers.

Says White: “The creation of the Johnnie Walker Explorers’ Club Collection and its unique collection of exclusive blends signifies our commitment to our highly valued travel retail customers.

“Building on our travel heritage and spirit of adventure, we have created three variants in our first Johnnie Walker Explorers’ Club Collection,” he continues. “The Trade Routes Series – The Spice Road, soon to be followed in 2013 with The Gold Route and The Royal Route—is a celebration of global travel and of travelers past and present and will only be c available through travel retail.”

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Gulf Beverages A Whyte & Mackay Special pack that consists of two bottles of the popular whisky plus a 35 cl flask; promotional flexibility is one of Gulf Beverages key draws for supplier partners

Jura’s 30 Year Old “Camas an Staca” (Standing Stone) whisky

The

power of

partnership

Gulf Beverages and Whyte & Mackay enter into strategic distribution partnership

G

ulf Beverages has announced that it has entered into a strategic partnership with Whyte & Mackay to distribute its brands across the Gulf and India.

“It’s really a logistical partnership,” explains Leon Ashford, Director of Business Development. “Whyte & Mackay’s brands are already present at major travel retailers in the Gulf and India, so it will be a question of managing existing relationships as well as expanding the footprint of the brands in these regions.”

Brands involved in the deal include Whyte & Mackay Special, Jura, The Dalmore, Mackinlay’s Shakleton, as well as a vodka brand owned by Whyte & Mackay. Of course, Gulf Beverages has carved out a reputation for being a premiere distributor able to successfully navigate the notoriously complicated Indian market, but we asked Ashford to explain the benefits that Gulf Beverages can provide to a brandowner like Whyte & Mackay.

“As we’ll be taking over the logistics, this opens up a new world of possibilities for the brands,” he explains. “For the operators it means shorter lead times and smaller, more frequent supplies so that there’s less working capital tied up.”

For specialized brands like The Dalmore or Jura—currently the fastest growing single malts in the duty free industry—it’s clear how the above could be advantageous. For a brand like Whyte & Mackay whisky, though, there are also clear benefits. Ashford tells us that promotional flexibility is a big selling point. Gulf Beverages will be releasing an India arrivals pack of Whyte & Mackay Special that consists of two 75 cl bottles plus a 50 cl GWP. “We’ve also got some twin packs prepared for the Gulf as well,” Ashford tells us. “Our model allows a brandowner such as Whyte & Mackay to run promotions straight across the Gulf and India, lending consistency to the brand image through a coordinated approach across an expansive section of the travel retail landscape.”

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The Dalmore 12 Year Old

The brands to compete It’s clear that whisky fans who purchase in travel retail are looking for something apart from the norm and Whyte & Mackay certainly delivers. Perhaps the most talked about news of late from The Dalmore is the release of The Constellation Collection, which consists of 21 individual expressions that have spent their lives finessing in the finest casks from around the world before being bottled at natural cask strength and at natural color.

Prices range from £20,000 (US$31,300) for a bottle of the Vintage 1964 to £2,000 (US$3,100) for a bottle of Vintage 1992. The entire collection will sell for £158,000 (US$247,000).

Given the RSPs, it’s clear that high-end retailers in India and the Gulf will be the focus for this particular collection.

For the more budget-conscious whisky drinker, Ashford points out that Whyte & Mackay recently launched Mackinlay's "The Journey," a recreation of the century-old Mackinlay's blended scotch created for Ernest Shackleton's epic adventure of 1907.

Following the huge success of its original recreation, Whyte & Mackay has launched this follow up. The move was prompted by a request from the Antarctic Heritage Trust, the charity, which found the whisky, to find ways to raise much needed funds for the conservation of the expedition bases on the Antarctic.

The latest release of Jura is perfect for those looking for something priced in between The Journey and The Dalmore Vintage 1992.

Called the Standing Stone, or “Camas an Staca” in Gaelic, the new expression takes its name from the largest of Jura's eight standing stones.

Meticulously detailed, the bottle is in-filled with copper wax with a matching metal plaque. Jura Camas an Staca is available at a RSP of £350 (US$560) per 70cl.

“Were very happy to be working with Whyte & Mackay,” concludes Ashford. “They’ve got such great brands, and it’s always nice to have this type of critical mass when entering markets such as India. c It helps the operators, the brands and Gulf Beverages."

THE MINIS

Berry Brothers & Rudd

The Malt Master determines when The Glenrothes vintages are ready for release; pictured here is former Malt Master John Ramsay, now retired

Heritage counts: this has been the London home of Berry Brothers & Rudd since 1698

Learning

curve T

BBR approaches Asian markets at different stages of development

he Asian markets present a number of different challenges for Berry Brothers & Rudd Spirits in terms of market sophistication, but the one thing that ties the region together is the amazing potential for market growth over the longer term.

“In Asia travel retail we’ve experienced solid growth over the past two years,” says Regional Sales Director for Asia Johnny Roberts. “We’re beginning in Singapore and Hong Kong, and Mainland China is very early for us yet. In Mainland China the level of sophistication just isn’t there yet to appreciate craft spirits, but the market is definitely a very exciting prospect for us for the future.”

Indeed, Roberts describes the last three years as a “steep learning curve”—and that includes the customer learning that will need to continue so that Berry Brothers & Rudd can really hit its stride. With its primary and best-known fine spirit being the Speyside Single Malt Scotch Whisky The Glenrothes, telling the story is key.

“If you’re a well known brand name you can put your brand on the bottle and sell it pretty well anywhere,” Roberts says. “But if you’re a boutique spirits company like us you need to explain the product so people understand the quality of what’s in the bottle. For us it’s the quality of the liquid—and our heritage, being family owned for over 300 years, our history as suppliers to the British Royal Family. These things enable the Asia customer to understand us better and have confidence in the liquids we supply.”

Communicating the story and building that trust takes different forms for Berry Brothers & Rudd. Roberts points to the brand introduction that is displayed in English and Chinese on wall bays in outlets in China.

The brand also finds that “miniature” GWP 64

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BY

HIBAH NOOR

promotions play well in Asia, where gift-giving is an important element of local cultures.

But with a unique product like The Glenrothes, Roberts has found that there’s no substitute for tastings, so Berry Brothers & Rudd focuses in this area. Although tastings are definitely more labor-intensive than the more standard kinds of promotions, they’re excellent at winning customer loyalty, and represent an unparalleled opportunity to communicate what makes The Glenrothes unique directly to the customer.

The Chinese market, while still very new, has already demonstrated a strong preference for ultra-premium products, and the vintage approach used in making The Glenrothes makes it unique. New vintages are released at the decision of the Malt Master, who has full discretion to release a vintage when he judges it’s at its absolute peak of perfection, not according to a conventional schedule of multi-year intervals. Berry Brothers & Rudd has introduced 17 Vintages of The Glenrothes in total, with 11 of them now sold out.

Other brands do also release vintages, but not, Roberts says, to the same degree.

During The Glenrothes’ first years in Asian markets, tastings have been hugely successful. “It was important to get ‘liquids on lips’ because we hadn’t really done anything in travel retail before,” Roberts says.

With The Glenrothes, conversion through tastings is very high. “You can actually educate people and really communicate the difference between your brand and others,” Roberts says. “People are willing to buy at full value when they’ve tasted the product and have come to believe in the brand.”

The single malt category is a large and well established one in Taiwan and Japan, it’s growing in Southeast Asian markets and it’s completely new in Mainland China. Hong

Regional Sales Director for Asia Johnny Roberts samples a vintage

Kong and Singapore have picked up in recent years, Roberts adds.

Berry Brothers & Rudd is involved in new product development now, but Roberts said it was too early to offer more details. In the meantime, he says, they will continue to develop exclusive offerings for both the duty free and domestic channels. The company has offices in Japan, Singapore and Hong Kong, where Roberts is based—an office that houses a company devoted primarily to fine wine distribution.

“The heritage, provenance and tradition of Berry Brothers & Rudd really resonate with the consumer here in Asia,” Roberts says. “There’s a real aspirational side to Berry Brothers & Rudd—something people like to be associated with. This is a positive for us in the Asian context. It really works very strongly for us in this part of the world.” c

experience

THE WORLD'S FINEST WINES AND SPIRITS DESTINATION Experience the new Le Clos flagship store in Terminal 3, Concourse A at Dubai International. The uniquely designed store features a decommissioned whisky still, interactive experiences, tasting area and personalised bottle engraving. Our highly knowledgeable team who speak over 20 languages will guide you through the Le Clos range, which includes rare and sought after wines from stunning vintages to iconic New World wines and spirits steeped in tradition. Whether you’re a connoisseur or enthusiast, discovering Le Clos will be the perfect start to your journey.

BUY BEFORE YOU FLY. COLLECT ON ARRIVAL. Find the new flagship Le Clos located near gate A1 and the original store adjacent to gate B8 in Terminal 3, Dubai International.

Also available in Emirates First Class Lounges.

Le Clos is open 24 hours a day Tel. +971 4 220 3633 • Email customerservices@leclos.net • Web www.leclos.net

Liquor News

Launched late last year, the Incheon Crystal Stag continues the £1 million (US$1.57 million) investment by William Grant & Sons in Glenfiddich

Lucky eighth Glenfiddich Crystal Stag in place at Seoul Incheon

The eighth Glenfiddich Crystal Stag Gondola was unveiled at Seoul Incheon airport with Lotte by premium spirits brand William Grant & Sons (WGS).

Launched late last year, the Crystal Stag continues the £1 million (US$1.57 million) investment by William Grant & Sons in Glenfiddich, bringing to life the pioneering spirit of the brand.

“It’s very apt that this is the eighth Glenfiddich Crystal Stag Gondola—as the number is seen as particularly lucky in Asia and closely associated with wealth,” says WGS Director of Travel Retail Asia Pacific Scott Hamilton. “We certainly look forward to seeing increased sales growth for the brand following the installation, as we have in other parts of the world where the Glenfiddich Crystal Stag has been placed.”

The installation has been carried out in conjunction with William Grant’s local agent Samsung and Lotte. “It’s been an absolute pleasure working with Samsung and Lotte as our partners to see the Stag in such a dominant position within the airport,” continues Hamilton. “It is clearly attracting the immediate attention of consumers as they move through the travel retail environment.”

“As interest in single malt whisky is growing among Korean customers, I’m delighted to have the Crystal stag gondola placed with such excellent visibility in IIA Lotte DFS,” adds Byung Rok Choi, Managing Director Incheon Airport Shop. “I expect much more growth in Glenfiddich sales as a result of this stunning crystal gondola promotion in the future.”

Rémy Cointreau continues to pique the interest of consumers in Asia duty free

Asia Duty Free recently had the opportunity to speak with Matthew Hodges, Marketing and Business Development Director for Rémy Cointreau GTR. He tells us that as usual, Rémy Cointreau is constantly innovating and exhibited a number of new launches at the industry’s most recent exhibition, TFWA WE. A limited edition Rémy Martin bottle with a pop culture theme that will appeal to the younger Cognac drinker made its debut at TFWA WE, and the most recent upmarket treatment of Cointreau, called Mabille, was showcased at the show as well. Additionally, Russian Standard continued making waves in duty free with a new design for Russian Standard Gold. Finally, champagne fans found 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

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Teese made appearances in various parts of Asia in autumn of 2012 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 is soon to 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 Diamant, the travel retail exclusive Premier Cru collection and of course Louis XIII, the pinnacle of the collection.”

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

The home of Avondale’s Samsara—the wine is made from Shiraz grapes from organically grown vines that range from 10 to 15 years of age

Korean Air lists Diverse Flavours’ Avondale Samsara in its Skyshop Diverse Flavours has announced that Korean Air has listed the Avon- Green Awards held in London. So it is a great fit with Korean Air’s dale Samsara 2006 as part of its in-flight duty free sales program in premium wine portfolio.”

Samsara is made from Shiraz grapes from organically grown the Skyshop.

Anthony Budd, Managing Director of Diverse Flavours, com- vines that range from 10 to 15 years of age. They provide low yields mented: “We are very pleased to continue to supply great South African of four to eight tins of healthy, balanced fruit. wines to Korean Air. The Avondale Samsara is a tremendous wine Samsara’s character is described as offering notes of soft wood, that has been awarded 90 Robert Parker points by Wine Advocate white pepper, wild berries and fynbos upon nosing. In the mouth, Sammagazine. Last year the Winery was also awarded the sought after sara is full, rounded and undeniably grape-tasting with hints of mulAmorim Environmental Award at the prestigious Drinks Business berry and plum, clove and cinnamon.

Bacardi mixes fresh new look and taste for RTS cocktails

Bacardi Global Travel Retail has introduced a fresh new look and taste for its collection of Bacardí Ready To Serve Classic Cocktails, currently being rolled out across global travel retail.

“Since their launch two years ago, Bacardí Ready To Serve Classic Cocktails have pioneered an entirely new category in global travel retail,” says Pedro Santos, Marketing Manager for Bacardí rum. “Bacardí is the number one brand in the category and we are building on this success by maximizing convenience and value and continuing to invest in delivering a quality cocktail for travelers whenever and wherever they please.”

Presented in a new-look bottle which reinforces the authenticity of Bacardí rum and the cocktails it creates, the natural flavors

and ingredients used to create each of the Ready To Serve Classic Cocktails—the Bacardí Mojito, Bacardí Piña Colada and Bacardí Strawberry Daiquirí—are now of an even higher quality, giving them a taste closer than ever to the original hand-made cocktails.

As the world’s favorite rum and the world’s most awarded spirit, Bacardí has established a reputation for constantly innovating and building on its already exceptional levels of quality. Bacardí continues to revolutionize the category just as it did in 1862 with the creation of the world’s first premium, light-bodied rum. Bacardí rum went on to inspire early cocktail pioneers to create a new genre of cocktail recipes, including the Original Bacardí Daiquirí and the Authentic Bacardí Mojito.

Just like the hand-made cocktails, each of the Bacardí Ready To Serve Classic Cocktails has Bacardí Superior rum at its heart.

The natural flavors and ingredients then added to each recipe include carefully measured quantities of real lime juice and cane sugar to create the Bacardí Mojito, limes and natural strawberry flavor to create the Bacardí Strawberry Daiquirí and real coconut water to create the fresh, creamy taste of the Bacardí Piña Colada.

“As well as delivering a quality cocktail with maximum convenience and value, the Classic Cocktails range has a new look which will drive footfall,” says Pedro Santos. “When the entire range is showcased on a prominent gondola, which highlights its convenience benefits, it can act as a real magnet for holiday travelers.”

Prowood offers two exquisite spirits from France and Armenia California-based Prowood Wine & Spirits’ (PWS) offering is steeped in the mystique and luxury of premium spirits. The brands are led by the aromatic and spicy but delicate Arman Cognac from France and an Armenian brandy called Kilikia, made from finest grapes grown in the Ararat Region.

PWS is billing Arman Cognac, available in both the XO and VSOP expressions, as the jewel in its portfolio, with 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 PWS is billing Arman Cognac as the jewel in its portfolio—Arman Extra Old Cognac is a blend of a hundred rare and selected eaux-de-vie from the premier growing areas of France

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 as strong yet delicate, at the same time leaving a definite hint of toasted wood and a 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.”

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Liquor News

Martell and Chivas Regal launch luxury walkthrough boutique at KLIA

Inniskillin plans to expand the Sparkling Icewine portfolio with this 2012 vintage by creating a limited release Cabernet Franc Sparkling Icewine

Inniskillin welcomes subzero temperatures for Icewine harvest 2012

After months of watching the weather, Inniskillin Wines recently announced that the annual Icewine harvest went into full swing in Niagara-on-the-Lake in January. Inniskillin, renowned as the global leader in Icewine, waited patiently on stand-by for the perfect weather conditions to pick the 2012 harvest of grapes, which will be pressed in the extreme cold to extract their coveted nectar.

Fluctuating temperatures kept the team closely watching the weather predictions. Inniskillin’s vineyard manager Gerald Klose and winemaker Bruce Nicholson anxiously watched the weather and subsequent drop in temperature. The naturally frozen grapes of Cabernet Franc and Riesling were harvested first from the Woerthle Vineyard.

Following that, the Vidal grapes were harvested from the Brae Burn Vineyard, home winery at the Inniskillin Winery.

“Nicholson looks for the critical balance between the natural sugars and the natural acidities. He is anxious to try the first freshly pressed juice for an indication of what is to come for this vintage,” said Inniskillin in a release to the media.

Inniskillin plans to expand the Sparkling Icewine portfolio with this 2012 vintage by creating a limited release Cabernet Franc Sparkling Icewine. Currently Nicholson produces a Vidal Sparkling Icewine which has been highly awarded and much sought after.

According to Inniskillin, Nicholson is relieved to get started on this new vintage after a highly successful year of prestigious awards dominated by his Icewines.

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Operator DFZ has opened a new retail store showcasing two of Pernod Ricard’s most prestigious brands— Martell and Chivas Regal— in the arrivals area of Kuala Lumpur International Airport.

“We are proud to extend The Chivas Brothers’ Blend space features vibrant our retail presence in KLIA, 3D merchandising units in a bar-style format which one of our key markets in plays on depth and contrasting perspectives Asia, and have the opportunity to showcase and share exclusive Martell and Chivas Regal experiences with travelers,” says Sandrine Tesniere, Senior Brand Manager, Pernod Ricard Asia Duty Free. “Both are iconic and prestigious brands in our portfolio and we are using the new space to stage spectacular displays and product exclusivities underlining their ultra-premium credentials and standing within travel retail.”

In the new retail space, Martell Cognac unveiled for the first time in Asia Duty Free its Martell Trunk, a spectacular masterpiece designed by French luxury brand Pinel & Pinel. It is a collector’s item featuring the entire range of Martell Cognacs capturing the essence of Martell, its history and its heritage.

The trunk also contains 28 montres (small 20 cl cylindrical flacons)— or seven examples of four remarkable, unique blends. Each one is a tailored composition that reproduces an aromatic picture of one of the four cognac terroirs: Borderies, Grande Champagne, Petite Champagne and Fins Bois.

Alongside the Martell Trunk the brand will also present its limited editions, such as Millesime 1968, which is only available in selected travel retail markets worldwide. The Martell Trunk will be presented in the new retail space for three months, after which travelers will be offered a new sensory experience in the form of a unique cognac discovery.

In terms of Chivas Regal, this is the first time the brand has opened a large retail space using its new stylish and modern visual identity. It features vibrant 3D merchandising units in a bar-style format which plays on depth and contrasting perspectives to bring to life the brand’s personality and style.

The retail space will celebrate the launch of The Chivas Brothers’ Blend, a permanent addition to the portfolio and the first product launch for the brand since Chivas Regal 25 Year Old in 2007. This travel retail exclusive whisky pays a contemporary tribute to the brand’s rich history, James and John Chivas, and their legendary blending skills. A thoroughly modern whisky that is ultra smooth and perfect for sharing, this unique 12 year old blend uses a carefully selected range of malt whiskies, including high proportions of Strathisla and Longmorn malts, to recreate the extra smooth taste that made Chivas Regal’s whiskies famous.

The complete Chivas Regal range will also be available in store.

In the new retail space, Martell Cognac unveiled for the first time in Asia Duty Free its Martell Trunk, a spectacular masterpiece designed

by French luxury brand Pinel & Pinel

«YEAR OF THE SNAKE» Limited Edition 2013

www.davidoff.com

Smoking seriously harms you and others around you

British American Tobacco Global Travel Retail Asia Pacific

New products,

new opportunities

British American Tobacco Global Travel Retail Asia Pacific plans new launches to cater to adult smokers in Asia travel retail

BY RYAN WHITE

B

ritish American Tobacco Global Travel Retail Asia Pacific (British American Tobacco GTRAP) has announced that it plans to showcase two super-premium product offerings in Asia Pacific this year, Dunhill Gran Cru and State Express 555 Platinum.

Dunhill Gran Cru Special Reserve Uganda Taste contains 61% Virginia, Burley and delicate Maryland tobaccos acquired from the Nile Valley in Uganda during 2010, which proved to be a special year for the tobacco leaves. This harvest was reserved and carefully laid down, allowing layer upon layer of tobacco to mingle and mature, balancing and perfecting the flavor.

Justinus Nurman, Head of Global Travel Retail Asia Pacific at British American Tobacco GTRAP, tells us that after 18 months of aging, the leaves were complimented with the finest Maryland and Oriental tobaccos.

“The resulting sensation has a deeper, toasted experience with hints of spice and cedar

wood,” he says.

The concentration for Nurman and British American Tobacco GTRAP is to maintain a given brand's identity while at the same time making sure new ideas are regularly being brought to the table. The above offering is a good example of this. By giving consumers a new way to think about the Dunhill brand, British American Tobacco is effectively enhancing the smoking experience.

We asked Nurman how much of a concentration China is for British American Tobacco Global Travel Retail Asia Pacific, 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 limited edition products,” he explains. “As such, it's important for us to have a strong presence throughout Asia Pacific at the airports where the Chinese are traveling.”

“We see a growth market for travel retail proven by the increasing number of travelers through major airports and their increasing spending power.”

Justinus Nurman, Head of Global Travel Retail Asia Pacific at British American Tobacco GTRAP

Steeped in tradition As mentioned, British American Tobacco is currently planning the launch of State Express 555 Platinum, and the brand in general certainly possesses its share of history. In 1896 Sir Albert Levy undertook a 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, With the new range of State Express 555 premium tobacco blends, British American Tobacco seeks to draw inspiration from Sir Albert Levy's legacy of quality and authenticity

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Dunhill Gran Cru Special Reserve Uganda Taste contains 61% Virginia, Burley and Maryland tobaccos acquired from the Nile Valley in Uganda during 2010, which proved to be a special year for the tobacco leaves

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 continued to be made by hand until early 1930, long after most cigarettes had switched to machine manufacturing.

With the new range of State Express 555 premium tobacco blends, British American Tobacco now seeks to draw inspiration from Levy's legacy 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.

Nurman concluded by telling Asia Duty Free that British American Tobacco GTRAP is present in all duty free channels in the region and sees opportunities for 2013: “We see a growth market for travel retail proven by the increasing number of travelers through major airports and their increasing spending power,” he said. “In travel retail environments, Asian adult consumers pay special attention to products which are of limited edition, exclusive for travel retail and suitable for gifting purposes. British American Tobacco continues to work hand in hand with our customers to leverage on c those unique qualities.

Limited editions are a great way of capturing adult smokers’ imaginations in travel retail; pictured is the limited Lucky Strike Luggage Edition

Selección Petit Robustos from Habanos is presented in an elegant travel retail case

Tobacco News Habanos launches Selección Petit Robustos for travel retail

Habanos recently announced that it has introduced Selección Petit Robustos, presented in an elegant travel retail case—of which just 5,000 have been produced—that will surely become a valuable and special gift appreciated by Habanos enthusiasts. The limited edition will be available at selected duty free and travel retail points of sales in the next couple of weeks, the company says.

The beautiful case contains 10 Petit Robustos (50 ring gauge x 102mm in the length), a vitola widely accepted by Cuban cigar lovers. This

selection includes five of the most prestigious Habanos brands: Cohiba, Montecristo, Romeo y Julieta, Partagás and H. Upmann.

The possibility of enjoying each brand's particular blend in a comparable format makes this Petit Robustos Selection an attractive choice for those who want to enjoy a wide sample of the Habanos most prestigious flavors in just 20 minutes,” says the company. “All these Habanos have been made with filler and binder leaves from the Vuelta Abajo (D.O.P) zone in Pinar del Rio, Cuba.”

Davidoff releases Year of the Snake edition 2013 is represented in the Chinese calendar by the sign of the snake. To mark the occasion, Davidoff has created the new "Year of the Snake" edition of cigars with three fine limited edition accessories.

In the Chinese calendar, the sixth of the twelve Chinese signs of the zodiac is characterized as wise and graceful. The Snake is the quintessential symbol for intelligence and profundity. Integrating these characteristics into an aroma represents a challenge for the Davidoff Master Blender: namely, to combine particularly old tobaccos to successfully create three layers of flavor— from floral nuances reminiscent of honey, to caramel and finally to peppery notes of wood or nut, whilst also providing a captivating quality. Highly aromatic, with light-medium strength and Cuban thickThis soughtness, the cigar develops a charming after release from Davidoff is creaminess due to the Ecuadorian limited to only binder. Notably, the release is limited to 4,500 pieces only 4,500 pieces.

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Imperial Tobacco celebrates a rich tradition

Imperial Tobacco has launched a new limited edition for Chinese New Year 2013: Davidoff Snake Edition. The Davidoff Snake Edition was launched into airport shops in the Middle East, India, Asia, Indochina, selected airport shops in the Americas and Europe, as well as selected ship chandelling operators from December 12 through the peak traveling season of Chinese New Year 2013.

Containing cigarettes of renowned quality from the Davidoff Premium Line Classic, Gold and Supreme variants, both packs and cartons are intricately embossed with snake skin textures.

To enhance visibility and relevance of the edition, the brushed steel bands of the brand are replaced with gold hot foil.

Curve designs on the cartons and packs also form an infinity pattern when jointly merchandised on shelves bringing the “Snake” concept alive.

“Chinese travelers continue to look for their brands in unique packaging designs within travel retail and even more so during this period of high gifting propensity,” says Nigel Ng, Brand Marketing Davidoff – Global Duty Free.

“Not only is this edition highly relevant to our Chinese shoppers, travelers of other nationalities are also offered a unique purchase opportunity, allowing the brand to form part of their travel experiences.”

Djarum

Djarum gives smoking

Djarum was the first to internationally market brown and black paper kretek

a creative edge Over 60 years in the making, the company sits at the forefront of the industry with innovations in cigarette making

T

he clove cigarette, commonly called kretek, was developed in the late 19th century in the city of Kudus, Central Java. It was here that a man named H. Jamahri rubbed on his chest an ointment made of clove oil that provided temporary relief from recurring chest pains. Soothed by its warm yet refreshing sensation, Jamahri proceeded to blend a pinch of clove cuttings with tobacco so he could also feel the clove work in his chest when smoking the blend. And as legend has it, Jamahri’s chest pains disappeared and word of the mixture quickly spread throughout Kudus.

Named kretek after the crackling sound of the cloves, Jamahri's mixture grew to be the backbone of his hometown’s economy and put Kudus on the map as the capital of kretek.

Fostering the tradition of kretek making, Oei Wie Gwan established Djarum’s first workshop in 1951 in Kudus. With only 70 pairs of skillful hands and just enough handrolling equipment, Oei oversaw the selection and blending of cloves and tobacco. To ensure consistent quality, it was not uncommon to find Oei on the shop floor personally supervising each worker.

After Oei’s passing in 1963, his sons Bambang and Budi Hartono took over the company.

Gaining devotees After the introduction of machine-rolling technology in 1970, Djarum’s growth catapulted. Today, Djarum is made of 86,000 employees and the factory in Kudus has a production capacity of 60 billion sticks per annum.

In Indonesia, kretek dominates the cigarette market at 92%; the remaining is made of white cigarettes. Kretek also has a significant contribution to cigarette sales in neighboring countries, such as Malaysia and Brunei Darussalam.

Today, the Djarum blend of kretek is available in South East Asia, Japan, Europe, North, Central and South America, the Middle East, South Africa and Australia.

Winning blends Djarum pioneered the production of low-tar, low-nicotine kretek with its Djarum Lights brand, which was especially created for the North American market. Djarum also pioneered the art of kretek cigarillos with its Djarum Cigarillos brand. Presently available in five continents, Djarum was the first to internationally market brown and black paper kretek as well as produce vanilla- and cherry-flavored kretek blends. Today, Djarum menthol, Djarum

Djarum was also the first to produce vanilla- and cherryflavored kretek blends

vanilla and Djarum cherry are enjoyed by consumers in some European countries. In addition, Djarum invented an advanced clove processing technology known as Superfine Clove.

At home, Djarum Super is recognized as being among the most premium priced filtered kretek. Djarum Super is currently the brand most preferred by young kretek consumers in Indonesia. In Europe, Djarum Black and Djarum Special are the two most popular kretek brands.

A kretek legacy As the most recognized kretek brand to come out of Kudus, Djarum actively donates to the preservation and cultivation of the kretek museum located in the brand's hometown.

Environment has also been a main concern of Djarum. One of its successes was mountain Muria reforestation in Kudus, Central Java.

Once a barren land, Mountain Muria now has 30,000 trees. Other achievements include a plantation of 80,000 mango trees in Kudus.

Since 1984, Djarum has granted scholarships to 5,000 students.

Recipients from provinces throughout Indonesia are provided with funding to attend either private or public institutions in Indonesia.

Since 1968, Djarum has become an active member of the sports community and funded the making of Indonesia’s future badminton world champions. PB Djarum, the Djarum badminton club in Kudus, is recognized as one of the strongest and most respected clubs in the country. Djarum’s successes have been consistent, the most significant occurring at the 1992 Barcelona Olympics—the winners of the gold, silver and bronze medals in the c men’s singles were trained by PB Djarum as youths. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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New & Notable CONFECTIONERY Chupa Chups Smurfs Markers Company: Perfetti van Melle Global Travel Retail Description: A travel pack containing eight markers, seven lollipops and one Smurf coloring book which will be hitting duty free shops in April 2013

LIQUOR Tequilera Corralejo Añejo 99,000 Hours Aged Company: Tequilera Corralejo Description: Tequila Corralejo Añejo 99,000 Hours is double distilled in column and copper stills. Aged for 18 months in American oak

Mini Assorted Milk & Dark Chocolates 250g Company: Bonardo Travel Retail Description : Confectionary house Villars presents a new selection of mini assorted milk and dark chocolates. Available in four natural recipes including: Swiss Milk, Caramel Milk, Praline Milk and Dark 72 % chocolate

Nestle Adventure Mix 474g Company: Nestle International Travel Retail Description: Go on a confectionery adventure with the new Nestle Adventure Mix. A fun product with a jungle design, designed to have strong shelf appeal with its bold and colorful design, the mix includes an assortment of Smarties, Milkbar, Animal Bar and Lion products

ACCESSORIES

Pro Woman keyring Company: Troika Description: Breast cancer theme keyring includes four charms: pink ribbon, flower, heart (made with Swarovski Elements) and Venus symbol, available in cast metal/enamel and shiny chrome plated

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ASIA DUTY FREE & TRAVEL RETAILING MARCH 2013

Age of Discovery Red Wine Cask Finish Company: William Grant & Sons Description: Glenfiddich released the Age of Discovery Red Wine Cask Finish, an adventurous whisky bursting with flavor and inspired by Charles Darwin’s legendary voyage. Left for at least 19 years to mature, this whisky has been finished in casks which previously housed the full bodied red wines produced in South America and is available exclusively in Global Travel Retail

Lip Smackers Company: Scorpio Worldwide Description: Inspired by Coca Cola, Fanta and Sprite, the scented Lip Smackers are available in exclusive Travel Retail gifting tins of three or six units Hot Diamonds Jewelry Range Company: Scorpio Worldwide Description: Hot Diamonds features traditional and fashionable jewelry that combines sterling silver and diamonds

Perfection has a darker side.

An extraordinary blend of Patr贸n tequila and the pure, natural essence of the finest coffee.

simply perfect. patronspirits.com

The perfect way to enjoy Patr贸n is responsibly. 漏 2011 Patr贸n Spirits International AG, Schaffhausen, Switzerland. 35% Alc./Vol.

LIKE FATHER, LIKE SON.

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