The TFWA Asia Pacific Hainan Special Edition event set an optimistic tone for the future of global duty free and travel retail, with leaders from across the business confirming their commitment to work collaboratively to expedite the industry’s recovery from the pandemic.
In his opening address, TFWA President Jaya Singh stated that the figures around the decline in international travel did not make for comfortable reading, and, for example, new data from Paxsmart reveals that international departure passenger numbers fell from 473bn in 2019 to 84bn in 2020. However, we should not lose sight of the longer-term picture and there is substantial pent-up demand for travel.
The phenomenal growth of Hainan was big theme, with the province seeing duty free turnover grow by an astonishing 356% in the first quarter of this year. Shenzhen Duty Free Group CEO You Jiangwei said Hainan would be a ‘beacon rising’ from the pandemic, and would become a venue for international tourism, particularly from East and South East Asian countries.
Peter Mohn and Clara Susset of m1nd-set presented their study on the characteristics of duty free shoppers in Hainan. The data revealed some eye-opening figures – for example, 98% of visitors to Hainan did some form of shopping, which Mohn said was the “highest numbers he has seen” in his 25 years analysing the duty free and travel retail market.
The data also revealed some unique characteristics of Hainan duty free shoppers. These consumers were primarily focused on self-consumption, with 67% buying duty free gifts for themselves. They were also more open to buying new duty free products, with 68% purchasing new brands during their visit. However, the majority of Hainan shoppers (85%) also value the importance of brand reputation when choosing duty free products.
The virtual conference saw senior figures from across the industry explore other pressing themes, including the regulatory changes required to kick-start recovery, the importance of digitalisation, the prospects for the luxury market and the shifting behaviour of the post-COVID consumer were other topics that were discussed in detail.
China Duty Free Group CEO Charles Chen highlighted the importance of updating digital capabilities in order to capture the attention of Generation Z Chinese shoppers, who are primarily purchasing exclusive, luxury duty free goods online.
Benjamin Vuchot of DFS Group agreed that digitalisation and ‘e-tail’ propositions would help meet the passenger needs of the next generation of travellers. He added these should be used to enhance the unique physical experiences travel retailers can provide, which would present “an amazing opportunity” to cater to these customers with the right offer.
Continuing the subject of consumer purchasing habits and product ranges, Julian Diaz of Dufry Group said his company has seen increasing demand for local, sustainable and novelty and exclusive products among domestic passengers, but added these trends may change once international travellers return in greater numbers. Max Heinemann of Gebr Heinemann stated that rationalisation of product ranges was part of retailers’ “survival mode” in the current circumstances. However, he said future ranges would need to offer a greater variety of exclusive and authentic goods that cater to each individual customer, not just core luxury shoppers.
The speakers also called for more flexibility and sustainability in business models and a wider sharing of data in order to protect the industry in the short and long term. Dag Rasmussen CEO of Lagardère Travel Retail urged businesses to get out of the “20th century”
