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Tag: duty free

  • Shinsegae support for handcraft market

    Shinsegae support for handcraft market

    Shinsegae Duty Free has launched Han Soo, an open space where visitors can experience and buy Korean traditional handcrafted items, at Mesa Building mall in Seoul’s shopping district of Myeongdong.

    The 1016 sqm store displays products made by dozens of artisans, including 15 government-certified craftspeople.Works span from simple pottery to furniture, including traditional items integrated with modern elements.

    shinsegae-duty-free-han-soo-2

    Officials expect Han Soo to become an important venue for foreigners wanting to experience Korean traditions and goods. It will offer not only the craftworks, but also introduce the raw materials used to produce them. There will also be special exhibitions.

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  • China Duty Free Group appoints Lee Charn Cheng as COO

    China Duty Free Group appoints Lee Charn Cheng as COO

    China Duty Free Group (CDFG) has announced the appointment of Lee Charn Cheng (CC Lee) as Chief Operating Officer.

    A seasoned retail professional with a wealth of travel-retail experience, Lee spent 26 years with DFS Group, serving as managing director of Singapore and subsequently  managing director for Australia before leaving to join Valiram Group as Country Manager for Singapore. His most recent position was CEO for Lagardère Travel Retail responsible for Singapore and Malaysia and overseeing business developments in Hong Kong.

    Lee commented: “My last five years with Lagardère Travel Retail has been exciting as we see significant business growth. I thank my bosses Dag and Emmanuel for their support. I look forward to the exciting challenge of assisting CDFG in realising its vision and global ambition. CDFG has a great team and I am highly confident of building on their strengths.”

    A CDFG statement said Lee’s broad retail background and portfolio was a strong asset and would bring CDFG to the next level as a top global retailer offering a broad new exciting spectrum of retail experience to customers.

  • Shilla Duty Free opens 25,000sq m Phuket store

    Shilla Duty Free opens 25,000sq m Phuket store

    The Shilla Duty Free conducted a soft opening of its new downtown store in Phuket, Thailand at the weekend, which has allowed it to take the next step in its ‘diverse global expansion strategy’, it says.

    As reported, the store was slated to open originally in August, but the South Korean TR operator was actually able to officially add the Kathu district store to its growing international store network on 19 November. The retailer first opened a store outside Thailand in 2012 with its Changi Airport concession in Singapore. Since then Shilla has opened in Macau also.

    This time Shilla has partnered with two local companies (Gems Gallery and The Mall) to operate the store under a ‘GMS Duty Free’ joint venture first agreed in 2013. However the store fascia with carry ‘The Shilla Duty Free’ company name.

    Shilla says it is in charge of ‘general operation of the store including MD and store operation’.

    TWO-STOREY 25,000SQ M STORE

    “Gems Gallery, sole market leader of Phuket’s jewellery market, and The Mall, operator of top-of-the-class department stores and shopping malls in Thailand, are in charge of sourcing of Thailand local goods and marketing,” reveals Shilla.

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  • Incheon negotiates e-commerce law for T2 tender

    Incheon negotiates e-commerce law for T2 tender

    Kim Bum Ho, Deputy Executive Director of IIAC’s Commercial Marketing Group, said this morning that although Incheon Airport has planned to issue its T2 tender on schedule [in the first week of December], there could be a delay if the debate surrounding a change in e-commerce regulation – among a few other issues – continues.

    Operators at South Korea’s Incheon International Airport (ICN) are currently not permitted to offer online duty free shopping due to regulation that stipulates that downtown DF operators alone command this privilege.

    But Kim is all too aware of the increasing importance of e-commerce in South Korea, confirming that online sales growth continues to soar. “In South Korea the increased rate of online duty free shopping is now almost 50%-60% year-on-year…it’s so huge.”

    Kim says that many local residents now prefer to only shop online. “So if you go to the downtown duty free store at this hour (evening in South Korea) you will only see Chinese people; no Koreans, no local people. Local people like to shop online. It’s such a big trend.”

    In order to attract the most competitive bids (and retailers), Kim is trying to get the current e-commerce regulation for airport duty free operators changed…but it’s not been easy.

    A-large-jewellery-and-watches-counter-at-Incheon-International-Airport
    A large jewellery and watches counter at Incheon

    “The duty free sales do not match the passenger growth rate unfortunately, but we think at this moment the duty free business has increased by 15% compared to last year,” says Kim.

    “We are now talking…it is one of the issues we need to talk with the government about…So we are trying to [eliminate] the barriers to have e-commerce for airport duty free operators. I do think we can solve the problem for T2 operators…We have officially asked the Korean Customs office to permit the e-commerce business for airport duty free operators.”

    Kim reveals that IIAC should find out if this is possible in two weeks time. In fact, he plans to write this into the terms of the T2 tender, if negotiations with the Korean Customs Service (KCS) go to plan.

    TERMINAL 2 TERMS

    “I think it will be determined in two weeks. It’s one of the conditions for the bidding. So yes we are planning to open the tender in early December, but we have to negotiate with the Korean Government Customs office before it opens…if it is takes longer we’ll need more weeks before we open. Anyway, our target date is early in December.”

    Kim confirms that most local Korean operators such as Lotte, Shilla, Shinsegae, Hanwha and Doosan are interested in the Terminal 2 tender. Regarding the international operators he admits that two have already approached him, but he cannot reveal the company names at this stage.

    T2 TO OPEN IN LATE 2017

    Of course once the results have been announced, the retailers can begin to fit out the stores ready to commence trading in late 2017 when the new $5bn terminal opens.

    “T2 will be opened late in 2017,” confirms Kim. “We spent almost $5bn on constructing it. It’s a totally new and unique place…we have centralised the duty free shops more…and it will be a more market and customer-oriented place. We can provide a good business environment.”

    This year Incheon Airport says it has witnessed a very healthy increase in passengers of around 19%, however unfortunately duty free sales have not kept pace, as Kim concedes.

    “The duty free sales do not match the passenger growth rate unfortunately, but we think at this moment the duty free business has increased by 15% compared to last year.”

    Of course, Kim says that it’s difficult to make a direct comparison with last year, as the airport and the whole country suffered from the impact of MERS.

    “It’s not best to compare directly with last year, but when we compare with two years ago (2014) we had about 10% increase in duty free sales.”

    Incheon-International-Airport
    This year Incheon Airport says it has witnessed a very healthy increase in passengers of around 19%.

    $2BN SALES TARGET STILL IN SIGHT

    Kim also strongly believes that the airport can still achieve the $2bn sales total it predicted earlier this year. “We can hit $2bn again. Last year in 2015, we couldn’t because of the MERS…but this year in 2016 I think we can hit $2bn again.”

    As the world’s biggest duty free market, many are interested to see what sort of sales South Korea can register in 2016. As reported, duty free sales rose +36% to $7.9bn in the first nine months of this year.

    Kim gave us his updated forecast this morning: “I think the duty free business can hit about $9bn or $10bn in South Korea this year, so there is amazing growth actually.”

    However, Kim also admits that for the last few months – maybe even as early as April this year – the growth in the number of Chinese inbound visitors has decreased, for which Kim says ‘there are many reasons’.

    CHINESE INBOUND GROWTH SLOWS

    One of these could be the new luxury goods import tax introduced by the Chinese Government earlier this year in a bid to protect home-grown businesses. Of course political tension could also be a factor.

    [There were earlier concerns that the South Korean Government’s plan to plug into the US’ Terminal High-Altitude Air Defence (THAAD) system by the end of 2017 might cause a drop off in Chinese visitors, considering Beijing’s stiff opposition to the deployment].

    LOTTE WILL BID AGGRESIVELY

    “Duty free operators, including Lotte and Shilla are worrying about the Chinese changes…they spend less and they visit less.”

    Kim believes this is more of a problem for the downtown duty free business and maintains that ‘the airport business is very stable compared to the downtown business’.

    “Incheon is the gateway to South Korea and almost all the Chinese visitors have to come through Incheon Airport. It’s the national gateway…so it’s very stable, though their spending per passenger is now decreasing.”

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  • China approves 16 duty free arrivals shops

    China approves 16 duty free arrivals shops

    China’s Ministry of Finance has approved applications to open 16 duty free arrival shops in 10 international airports and at six land border crossing points, introducing limited competition to the nation’s growing duty free market for the first time.

    Four state-backed enterprises with existing duty free retail operations have qualified to bid for the 16 arrival shop licenses that are due to be awarded during the next six months.

    The four companies are: China Duty Free Group (CDFG), China National Service Corporation For Chinese Personnel Working Abroad (CNSC), Shenzhen Duty Free and Zhuhai Duty Free.

    “There is departure, arrival and downtown duty free shopping in China, now arrival shopping will be open to limited competition,” commented a source at one of the operating companies selected to bid for the licenses.

    CDFG AND CNSC HEAD TO HEAD…

    “The four companies are qualified to bid for all the duty free arrival shops. Probably Shenzhen Duty Free and Zhuhai Duty Free are not interested in operating nationally, but will bid for local arrival border shops, so the airport competition will be between CDFG and CNSC as they are the only two national operating companies.”

    The 10 airports approved to open duty free arrival shops include some of China’s top ten airports. The list does not include Beijing Capital International Airport, Shanghai Pudong International Airport and Shanghai Hongqiao International Airport, however, as these already offer duty free arrival shopping services under a special government dispensation issued in 2008 to assist in the preparation of tourist facilities for the Beijing 2012 Olympic Games.

    New airports selected to open duty free arrival shops are believed to include: Chengdu Shuangliu International Airport, Chongqing Jiangbei International Airport, Dalian Zhoushiuzi International Airport, Guangzhou Baiyun International Airport and Tianjin Binhai International Airport.

    Ministry of Finance regulations permit the arrival shops to sell perfume and cosmetics, liquor and tobacco, confectionery, fashion items, accessories and watches.

    MOSTLY L&T AND P&C

    “Airport authorities rely on duty free operators to arrange the merchandise categories,” the source remarked. “The airports will want to sell mostly liquor and tobacco, and perfume and cosmetics. Airports care more about the sales volumes as that’s where their revenue comes from.”

    The largest arrival shop application approved is understood to be Chongqing Airport’s plan to open a 500sq m arrival store while the smallest arrival outlet approved is Tianjin Airport’s 50sq m arrival shop.

    Most airports have applied to open one arrival shop, though several with sufficient arrival halls have received permission to open two arrival stores.

    Under Ministry of Finance regulations each of the 16 duty free arrival shop operator licenses awarded will be for 10 years. All the licenses are required to be tendered and awarded within six months of the date of the arrival shop application being approved.

    TENDERS UNDER PREPARATION

    While results of all the tenders will be registered with the Finance Ministry, China’s General Administration of Customs will be the controlling authority regarding arrival shop retail operations. Selected airport owners and land border crossing authorities are just starting to prepare their arrival shop tender specifications.

    The various licenses are expected to be awarded in March and April 2017 as all 16 applications were approved at the beginning of November.

    Constructing the arrival shops is expected to take about six months after each license is awarded. Consequently most of the new arrival shops are likely to begin trading around September and October 2017.

    SHENZHEN AND ZHUHAI FOR LAND BORDER SHOPS?

    Meanwhile, competition is likely to be fierce between CDFG and local operators Shenzhen Duty Free and Zhuhai Duty Free to win the land border arrival shop licenses as all the locations are busy crossing points.

    Five of the six land border arrival shop licenses are for crossings on Guangdong Province’s southern border – four of these are for crossing points on the Shenzhen-Hong Kong border and one on the Zhuhai-Macau border where Shenzhen Duty Free and Zhuhai Duty Free operate departure duty free shops.

    The other land border arrival shop license is for Heihe in northern China on the border with Russia where CDFG operates a large departure duty free shop.

    The opening of border arrival shops in southern Guangdong also could have important implications for retailers in Hong Kong and Macau who will soon be competing with China’s new arrival border shops for mainland tourists’ custom.

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  • GMR Hyderabad Duty Free launches its first ever ‘Duty Free Utsav’

    GMR Hyderabad Duty Free launches its first ever ‘Duty Free Utsav’

    Hyderabad Duty Free (HDF) has launched its first ever “Duty Free Utsav” as it joins the festive celebrations at Hyderabad Airport.  In continuation with the enthusiastic response from customers to its previous promotions, HDF has come up with its ‘Duty Free UTSAV’ celebrations, which is one of the biggest mega promotions done by Duty Free stores in the region.  The biggest attraction for the passengers during this offer season is the chance to win Nissan Terrano SUV on display at the arrivals store.

    During this Utsav, customers can avail discounts of up to 15% on various products, along with gifts and attractive offers on their purchases at Hyderabad Duty Free outlets. Further, Hyderabad Duty Free is also issuing special discount coupons that can be collected at the Departures store and redeemed at the Arrivals store to avail an additional discount of up to 15%.

    Another key feature of Hyderabad Duty Free Utsav is the surprise Dollar offs being given to the passengers of select flights on their arrival.  This surprise voucher can be redeemed with purchases above a certain threshold at Hyderabad Duty Free arrivals store.  

    Speaking on the occasion, Mr. SGK Kishore, Chairman-Hyderabad Duty Free Retail said, “The brand ‘Hyderabad Duty Free’ is growing stronger by the day and we owe this to the patronage to our valued customers. The thought process behind coming-up with the ‘Duty Free Utsav’ is to reach out to our customers and strengthen our position as one of the best travel retail destinations. Towards this, we have also undertaken several new initiatives such as coming out with customized offerings, tie-up with Telugu NRI Associations, improve our price competitiveness, Store upgradation etc.  I am happy to see our customers are shopping with us more and making the most of these unique benefits”

    With its range of product offerings at highly competitive prices along with the improved store ambience, Hyderabad Duty Free is now providing a whole new shopping experience and fast emerging as a preferred shopping destination for duty free shoppers in the region. 

  • Labuan duty-free shops not ready

    Labuan duty-free shops not ready

    Shops that applied for the Customs Kedai Bebas Cukai (Duty-free Shop) licence to enable them to continue being engaged in the sale of duty-free cigarettes, liquor and beer, have not been successful in obtaining approval.

    An observation of the premises operated by the applicants showed that the applicants had failed to meet the main requirements needed before a licence could be issued.

    The three main requirements are: 1. A desk at the premises for a Customs official to be stationed to monitor the daily sales of the items. 2. A computer 3. Internet connection

    Failure to comply with these requirement will result in the application for licence not being approved.

    This was stated in a circular issued by Customs officer Hjh Mirani Hj Majidi who signed on behalf of the Labuan Customs Department Director. The circular was issued to all applicants.

    Labuan Chinese Chamber of Commerce (LCCC) Chairman Datuk Wong Kii Yii (pic) said it is obvious that the market is not ready for the implementation of the new system to monitor sales at the point of sale.

    He suggested that under the circumstances, it was best the new rules be deferred until such time when the applicants were ready to invest in the fittings and space as required by the department.

    Wong said in the meantime the department could beef up its enforcement at well-known spots on the island where contraband cargoes were loaded into small boats.

    “This will cost less money for the department than basing an official in all the duty-free shops which could be about 20.

    This is a simple solution. We support the Government and public,” said Wong. The new Customs rules on retail sales of cigarettes, liquor and beer should have been effective from yesterday (Nov 1).

    A random survey showed most of the shops were selling the items as before. Some, however, took them off their shelves for fear.

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  • These could be the world’s fanciest duty-free stores

    These could be the world’s fanciest duty-free stores

    Airport travelers shuffling between security checks and their boarding gate often grab duty-free perfume or a cut-price bottle of spirits before an international flight.

    But that’s far from the reality of some passengers at Singapore’s Changi Airport, who in some cases shell out more than $100,000 dollars for a bottle of their favorite tipple before hopping onto a flight.

    High-end duty-free retailer DFS opened its new concept stores – complete with whiskey, wine, cigar and tobacco rooms, bartenders, complementary tastings and even virtual reality installations – in Changi’s Terminals 2 and 3 with precisely these customers in mind.

    “We drew inspiration from stylish restaurants and bars around the world when we created this space,” Wilcy Wong, DFS’s vice president of store operations in Singapore.

    He said there would be no hard sell when it came to the pricey products.

    “These days a lot of the customers are very knowledgeable themselves, so to be able to engage them and teach them something new is important,” Wong said.

    Not that the hard sell would be necessary; as well as knowledgeable, many customers are big spenders.

    DFS Wine & Spirits store at Singapore's Changi Airport
    DFS Wine & Spirits store at Singapore’s Changi Airport

    DFS staff recounted that one traveler recently bought a bottle of Glenfiddich 50-year-old single malt whisky priced at 43,910 Singapore dollars ($31,611) on a whim after passing the store. And that paled in comparison to the most expensive bottle ever sold at Changi, for S$250,000 ($180,000).

    Hong Kong-based DFS Group, which is majority owned by LVMH, has outlets at 17 major international airports, mostly in Asia, but has also staked flags in New York and San Francisco.

    The global travel retail market is estimated to grow to $85 billion by 2020, according to the Fung Business Intelligence Center, and Asia-Pacific is the largest single sector of the market, accounting for 39 percent, followed by Europe at 32 percent.

    This forecast growth is in contrast to the fall in retail mall traffic, particularly in the U.S., which has slumped as consumer spending lags and online shopping grows in popularity.

    Singapore’s Changi Airport, repeatedly ranked the best in the world by the influential Skytrax annual survey, hosts 55 million passengers a year, all of whom are classified as traveling internationally because Singapore is a city-state, and thus are free to buy duty-free items.

    DFS declined to provide any change in sales or foot traffic since opening of the new stores in Changi, but the concept has been praised by the retail and travel industry, winning “Best Shopping Experience” this year by Singapore’s Tourism Board, and Singapore’s Retailers Associations “Best Retail Concept of the Year”.

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  • Asian duty-free market buoyant

    Asian duty-free market buoyant

    The Asian duty-free market is growing at five times the global growth rate.

    New data released by the travel retail trade association TFWA (Tax Free World Association) shows that sales in the first quarter of 2016 rose by 5 per cent in Asia-Pacific. Global growth was just under 1 per cent.

    The TFWA is optimistic that the duty-free sector “faces a bright future” at a time when other sectors of the international retail market are struggling.

    Global duty-free sales are estimated at US$62 billion according to duty free and travel retail specialist Generation Research. The market has been growing steadily for the past six years, and while it suffered a decline in 2015, the figures for the first quarter of 2016 show the business is back on its upward trajectory.

    The fragrance and cosmetics category is the main driver of growth globally and its sales were up 7.8 per cent in the first quarter, while sales of wines and spirits were up by 4 per cent. Sales on board ferries grew by 6.5 per cent, while airport sales remained stable.

    TFWA president Erik Juul-Mortensen said the figures allowed the sector to be cautiously optimistic and tips further growth from the booming air travel market.

    The trade association Airports Council International predicts passenger numbers worldwide will more than double from 2015, when the number of air travellers reached 7.2 billion, to just over 19 billion in 2035 – a compound annual growth of 5 per cent.

    The World Tourism Organisation’s says international tourist arrivals were up 4 per cent in 2015 to reach a record of 1.2 billion, 50 million more than in 2014. The latest figures for the first half of this year show that tourism got off to a strong start in 2016, with international arrivals up 4 per cent compared with the same period last year.

    “This can only be good news for our industry, and all the indicators would suggest that we have plenty to be upbeat about,” said Juul-Mortensen. “This is a great sector to be in, and with growth rates that have been, in many years, the envy of many high street retailers, duty free and travel retail presents a wealth of opportunities.”

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  • Surge in Chinese tourist arrivals continues to boost South Korean duty free

    Surge in Chinese tourist arrivals continues to boost South Korean duty free

    Chinese visitor numbers to South Korea in August climbed by +70.2% year-on-year to 873,771, according to the Korea Tourism Organization. The figures are distorted by the 2015 MERS health crisis which ravaged inbound tourism in 2015, prompting a -32.3% year-on-year fall in arrivals last August. A better base comparison is the +15.2% growth in August 2016 over the same month in 2014, when Chinese arrivals reached 757,683.

    Chinese visitors are critical to South Korea’s travel retail sector (the world’s largest), representing 52.5% of total arrivals in the month.

    For the first eight months of 2016 Chinese arrivals rose by +48.8% year-on-year to 5,608,046.

    The importance of group tourists to the travel retail channel is underlined by the breakdown of Chinese visitor numbers (see table below) with 4,839,309 group travellers arriving in South Korea over the first eight months. Group tourists accounted for 86% of Chinese arrivals. Others (principally free independent travellers) represented just 731,731 arrivals, a 13% share, with business travellers and officials making up the balance.

    Attracting the FIT market is an increasingly important battleground in the fight between retailers to attract big-name luxury brands.

    However, arrivals by ‘others’ fell -7.0% year-on-year in the first eight months, while Chinese group tourist numbers surged +64.1%.

    Japanese arrivals grew -51.7% to 225,456 in August, a 14% share.

    The first eight months of 2016 saw a +23.5% rise in Japanese visitor numbers to 1,451,565, a 12.6% share.

    Korean departures increased by +12.5% in August to 2,064,241; and for the first eight months by +16.8% to 14,780,387.

    Visitor arrivals by gender for August; Source: Korea Tourism Organization

    Visitor arrivals by gender for August; Source: Korea Tourism Organization

    Accumulative visitor arrivals by gender for first eight months; Source: Korea Tourism Organization

    Accumulative visitor arrivals by gender for first eight months; Source: Korea Tourism Organization

    Visitor arrivals by purpose and nationality for August; Source: Korea Tourism Organization

    Visitor arrivals by purpose and nationality for August; Source: Korea Tourism Organization

    Accumulative visitor arrivals by purpose and nationality for first eight months; Source: Korea Tourism Organization

    Accumulative visitor arrivals by purpose and nationality for first eight months; Source: Korea Tourism Organization

    Outbound departures of Korean nationals by gender for the first eight months of 2016; Source: Korea Tourism Organization

    Outbound departures of Korean nationals by gender for the first eight months of 2016; Source: Korea Tourism Organization

    Outbound departures of Korean nationals by age for the first eight months of 2016; Source: Korea Tourism Organization

    Outbound departures of Korean nationals by age for the first eight months of 2016; Source: Korea Tourism Organization

  • DFS launches exclusive Burberry collection

    DFS launches exclusive Burberry collection

    Luxury travel retailer DFS Group has launched an exclusive Burberry collection which will be available only in DFS and T Galleria by DFS stores.

    The 22-piece BurberryxDFS collection was inspired by key elements from Burberry’s groundbreaking first straight-to-consumer runway show, referencing the brand’s unique British heritage. It comprises womenswear, menswear and accessories as well as a style of Burberry’s newest bag, The Bridle.

    The Bridle in wine and black with gold studs“When designing our new September collection, we were inspired by Virginia Woolf’s classic tale ‘Orlando’ and the spirit of Nancy Lancaster’s interior and garden designs, and we wanted the collection for DFS to reflect those elements,” said Christopher Bailey, Burberry chief creative.

    The Banner in mahogany red and black with gold studs

    The Burberry collection was revealed on the runway during London Fashion Week, where both womenswear and menswear collections were presented together for the first time for Burberry’s inaugural straight-to-consumer show.

    The Blouson jacket with studs in black

    “Seasonless, immediate, and personal, the new format has been designed with a global audience in mind. This move, announced in February, significantly shortens the traditional gap between the runway show and retail availability of Burberry’s collection.,” said a spokesman.

    The Halton wallet in mahogany red and camel with gold studs

    Giant Check scarf with studs in camelIn addition to The Bridle, highlights from the BurberryxDFS collection include exclusive styles of the Sandringham and Kensington trench coats.

    The Sandringham studded collar trench in honeyThe BurberryxDFS collection will be available in 23 DFS and T Galleria by DFS stores across 13 countries beginning September 21. Prices range from HK$1300 – HK$20,000 (US$168 – $2600).

    dfs-burberry

     

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  • Seoul tops airport retail rankings

    Seoul tops airport retail rankings

    Seoul’s Incheon Airport not only tops the Asia-Pacific rankings for retail spending – it has the highest turnover of any airport in the world.

    Which is remarkable given it ranks 10th in the region by passenger numbers, according to Airports Council International data, with 49,281,220 people passing through in 2015, compared to more than 90 million in Beijing and 55 million in Singapore.

    Asian airports dominate the world top 100 airport retail rankings measuring shopper spending, according to data collected by Swedish company Generation Research for 2015. While the tables lists the world’s top 100 and Asia-Pacific’s top 50, it does not provide any actual figures for spending. Sales from around the world were converted into US dollar value.

    In the global airport retail rankings, Incheon leads Dubai Airport, with Singapore Changi third.

    In the Asia rankings, published below, Singapore leads Bangkok – something of a surprise third-place getter given it is generally regarded as an expensive airport for ‘duty-free’ goods, and Pudong, Shanghai in fourth. Hong Kong makes it only fifth on the table, despite its huge passenger throughput and broad retail offer.

    Tokyo Narita, Beijing Capital, Taipei Taoyuan, Cheju and Osaka Kansai complete the top 10.

    On the global rankings, those Asian airports take fifth, sixth, seventh, eighth, 10th, 12th and 14th places.

    London Heathrow takes fourth place, Paris de Gaulle ninth, and Frankfurt 13th.

    Asia’s Top 50 list:

    Top 50 airport location Asia

    The Global Top 100 list:

    Top 100 airport location 2015 -1

  • Airport Authority Hong Kong creates new tender structure for anchor concessions

    Airport Authority Hong Kong creates new tender structure for anchor concessions

    Airport Authority Hong Kong (AAHK) will restructure its core category airside retail concessions in advance of a series of major tenders beginning late October or early November, The Moodie Davitt Report can reveal.

    There are currently three anchor concessions – liquor & tobacco, airside general merchandise, and perfumes & cosmetics, all held by DFS.

    As detailed by The Moodie Davitt Report in July, AAHK pledged earlier this year to refine the category and contract mix, promising “significant changes” to the concession structure to drive spending and improve the consumer experience at Hong Kong International Airport (HKIA).

    Since July, AAHK has been talking to potential retailers and conducting intensive consumer research with its passengers regarding the anchor licences. As a result, it has fine-tuned the contract packages.

    LIQUOR & TOBACCO AND PERFUMES & COSMETICS EXTENDED – BUT NO AIRSIDE GENERAL MERCHANDISE CONCESSION

    The core liquor & tobacco and perfumes & cosmetics concessions will be continued – but with important refinements. To spice up the traditional liquor & tobacco offering, AAHK plans to allow the new concessionaire flexibility to include other products. These include liquor & tobacco-related accessories, such as wineglasses and decanters, as well as upmarket gourmet items, for example fine teas and coffees. That concept proved highly popular with passengers during AAHK’s qualitative surveys.

    HKIA L and T

    The liquor & tobacco concession will be increased substantially both in terms of space and range, with the addition of liquor-related accessories and gourmet items

    To make the perfumes & cosmetics offer more attractive, AAHK plans to create a beauty and accessories “one-stop shopping destination”. That will involve combining perfumes & cosmetics with fashion accessories – the latter including sunglasses, fashion watches, small leathergoods, handbags and others. Those categories are currently sold through the airside general merchandise concession.

    HK P & C

    The perfumes & cosmetics concession will be extended to become a “beauty and accessories one-stop shopping destination”

    AAHK believes that the high penetration rate driven by beauty products can enhance the cross-selling potential of the two categories combined. Consumer feedback also strongly suggested that the categories are complementary.

    Critically, AAHK has decided to discontinue the airside general merchandise concession. The authority believes that given the airport’s extremely strong line-up of speciality stores and mono-brand boutiques, there is no need for the airside general merchandise concession. Instead it will allocate the best-selling general merchandise categories to the other packages.

    DEDICATED CONFECTIONERY CONCESSION

    In another key change, AAHK has opted to create a dedicated confectionery licence. Confectionery is a high-demand item at HKIA and the authority believes this justifies a separate concession covering multiple units across the terminal.

    hkia conf

    Confectionery, a big in-demand category, will enjoy its own dedicated concession

    The distribution and location of the stores will also see some important changes. For example, AAHK plans to remove the current small gate store units near the boarding gates. Because of the size constraints, the liquor & tobacco and perfumes & cosmetics assortments in them is limited. The units will be turned over to other retail purposes, deemed as better serving passengers’ needs.

    Simultaneously AAHK will increase the retail space in the East Hall – the shopping epicentre of the airport. Liquor & tobacco space there will increase by around +40%, while the addition of the fashion accessory categories will result in a huge +70% increase in the area dedicated to the extended beauty concession. More importantly, AAHK hopes that the additional floor space will allow the chosen retailers to introduce a wider product assortment.

    MORE DIVERSITY OF PRODUCTS; GREATER CONSUMER ENGAGEMENT

    In its consumer surveys, AAHK was told by many passengers that besides the big, upmarket European and US beauty brands they also wanted to see more variety – including the upcoming Korean and Japanese skincare names, most of them mid-price to premium price-points. In liquor & tobacco, consumers told AAHK they wanted to see more new and rare products.

    With the enhanced store sizes, AAHK will be asking its retailers to create greater customer engagement (for example, more wine tastings), which it deems as increasingly important to bricks and mortar stores. The enhanced space will also encourage greater flexibility, experimentation, rarity and excitement, it believes.

    TIME-LINE COUNTDOWN

    AAHK will begin the tender process with the liquor & tobacco and perfumes & cosmetics bids in late October or early November, with results being announced in March or April next year. Confectionery will be tendered in late 2016 or early 2017.

    The targeted changeover of concessions is set for the fourth quarter of 2017.

    NOTE TO AIRPORT OPERATORS: The Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport revenues, simply e-mail Martin Moodie at Martin@MoodieDavittReport.com.

    We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately.

    Similarly The Moodie Davitt Report is the only international business intelligence service and industry media to cover all airport consumer services, revenue generating and otherwise. We embrace all airport non-aeronautical revenues, including property, passenger lounges, car parking, hotels, hospital and other medical facilities, the Internet, advertising and related revenue streams.

  • GMR Hyderabad Duty Free Ties up with American Telugu Association

    GMR Hyderabad Duty Free Ties up with American Telugu Association

    Hyderabad Duty Free (HDF), a 100% subsidiary of GMR Hyderabad International Airport Ltd. (GHIAL), has announced a unique promotional scheme for American Telugu Association (ATA) under its ‘customer connect’ program to reach out to the Telugu diaspora residing in the US. This exclusive scheme for ATA members was formally announced by Mr.Hanmanth Reddy, founder of American Telugu Association in presence of Honorable Deputy Chief Minister of Telangana State, Mr. Mohammed Mahmood Ali; Dr Ausaf Sayeed, Counsul General of India at Chicago; Mr. Iftekhar Shareef, President of Telangana Association of North America among many more dignitaries, during the American Telugu Association Meet organized at Naperville, Chicago in the US state of Illinois.

    Under this program, ATA members can now enjoy exclusive offers at Hyderabad Duty Free stores at the arrivals and departures of GMR Hyderabad International Airport.  This connect program will also include periodic communication on Duty Free products, and round the year events and promotional activities happening at Hyderabad Duty Free.  The members will also receive quarterly magazines of Hyderabad Duty Free which covers interesting happenings in the city and region in addition to Duty Free updates.

    Under this unique promotional offer, the members of American Telugu Association will enjoy an additional top-up discount of up to 15% over and above the regular discounts & offers running in the store.  At the Arrivals store, ATA members will get additional flat discount of 10% and 15% on every purchase above $100 and $250 respectively. At the Departures store, the members will get an additional flat discount of 7.5% and 10% on the purchase above $50 and $100 respectively. 

    This discount will be applicable on the entire range of products available at Hyderabad Duty Free, making this one of the most unique schemes for any Duty Free in the world.  Furthermore, in-line with the objective to establish a connect with the Telugu diaspora, the program has a unique feature where these discounts will also be available to travelling family members (spouse and children) along with the main member. 

    With this unique promotional offer, Hyderabad Duty free will be offering lowest ever prices which would be give an overall benefit of up to 25-30% (considering the periodic regular offers) to ATA members.  To avail this attractive benefit, ATA members will have to present the valid ATA membership card or copy at the billing counter. 

    Speaking on this occasion, Mr. SGK Kishore, Chairman, Hyderabad Duty Free, said, “Hyderabad Duty Free represents the city of Hyderabad and entire Region.  With a wide range of international products along with attractive offers and gifts running round the year in our stores, we offer compelling value proposition to our valued customers and passengers travelling through the Hyderabad International Airport. We have recently started our initiative to further strengthen our relationship with key customer segments under the ‘Mana Hyderabad…Mana Duty Free” program.  Our association with the members of American Telugu Association is a major initiation in this regard through which we would like the ATA members to make ‘Hyderabad Duty Free’ as their preferred shopping destination while travelling.”

    Also speaking during this event, Mr. Hanmanth Reddy, Founder and former President ATA, said, “We are delighted that Hyderabad Duty Free has gone extra mile to initiate a promotional scheme dedicated to ATA members. I must appreciate and thank HDF for this initiative. I’m sure that every member of ATA will appreciate this gesture and shop at Hyderabad Duty Free to avail the benefit.” 

    American Telugu Association (ATA) is a not-for-profit organization which was started in early part of 1990 focussing Telugu origin people in the USA. The main purpose of the organization is to assist and promote literary, cultural, educational, religious, social, economic, health and community activities of the people of Telugu origin as well as to promote exchange programs for students, scientists, and professionals of Telugu origin between the United States of America, Canada and India and other countries.

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  • Lotte forecasts $5bn for 2016 after first-half surge

    Lotte forecasts $5bn for 2016 after first-half surge

    South Korean duty free and travel retailer, Lotte Duty Free Group, is targeting a +20% increase in total duty free revenue to reach just over $5bn in 2016 after first half growth of +25%. Driving the big increase have been high-spending Chinese visitors shopping in its stores.

    First half sales reached almost $3bn, a senior Lotte Duty Free source said on condition of anonymity. The sales boost comes at a time when the company was preparing to close its Lotte World Tower store in June after failing to renew the shop’s licence.

    “Chinese tourist numbers are very strong (and) we are forecasting a +20% increase in total revenue for 2016. Sales have increased a lot (so far) this year because in 2015 we had the MERS epidemic problem,” the source said. “Last year, our total revenue in South Korea was $4.2bn.”

    Lotte-World-Tower-hero-P&C

    Chinese travellers continue to boost sales.

    Sales in the second half of 2016 also got off to a good start with July revenue climbing +45% as the summer peak season got underway, the source noted.

    To cope with the closure of the Lotte World Tower store the company has expanded its Sogong downtown flagship unit in central Seoul. The shop has been expanded to occupy four floors in the Lotte Sogong department store building – adding floor 12 to floors nine to 11.

    The duty free shop took over the 12th floor in February which has been converted to the new perfume and cosmetics space and opening in June. It replaces the food court that was previously there.

    BEAUTY GETS ITS OWN FLOOR

    Moving beauty to the 12th floor from the 9th floor has increased the total duty free beauty area by around +35% to 3,500 sq m. In addition, Lotte will use about one third of its 11th floor retail area to display mid-priced South Korean cosmetics brands which are also popular with Chinese visitors.

    Space for the South Korean cosmetics brands zone on the 11th floor is being created by moving some fashion brands from this level to the ninth floor area where perfume and cosmetics were located previously. The ninth floor area is being developed as an open display fashion floor and Lotte plans to bring in a number of new South Korean and international fashion brands as well for the first time.

    The group has taken over the Seoul Gimpo Airport beauty and general merchandise licence, previously operated by Shilla Duty Free, which was recently retendered by Korea Airports Corporation (KAC).Meanwhile, responding quickly to the loss of its Lotte World Tower store licence, Lotte has recently acquired two new airport duty free licenses, emphasising the company’s intention to retain its leading position in  Korea’s DF&TR market.

    SME operator City Plus was awarded the Gimpo liquor, tobacco and general merchandise licence, that was previously operated by Lotte, after KAC reserved the concession for SME bidders only.

    Elsewhere, Lotte Duty Free has also taken over the Gimhae Airport perfume and cosmetics licence in Busan, after Shinsegae Duty Free decided to give up after losing money and it was retendered.

    FIGHTING ON FOR LOTTE WORLD

    Meanwhile, Lotte is aiming to reopen its Lotte World Tower store and has set its sights on winning one of four new duty free licenses for downtown shops in Seoul that Korea Customs Service is due to tender towards the end of 2016.

    “The 7th floor is being used for the Lotte Internet duty free centre and the customer lounge. As the government recently issued new duty free licenses, we will do our best to acquire a licence to repay the love our customers have shown to us. Thank you.”Following the World Tower closure: Lotte posted the following announcement on its website: “We express our deep thanks to our customers for shopping at Lotte World Tower. Due to the expiry of our duty free shop licence, Lotte World Tower store was closed on 26 June, 2016.

    Of the four new downtown duty free shop licenses that KCS will award, three are for large conglomerates and one for SME operators. In addition to Lotte, Shilla Duty Free and Shinsegae Duty Free may make bids even though both companies have already opened new downtown stores in Seoul this year.

    Newcomer Hyundae Department Store is another likely bidder, as is WalkerHill Duty Free which had to close its newly-rebuilt downtown store after losing its licence. It is keen to re-open its now empty shop.

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