CARE is our custom

CARE is our custom

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The duty free industry has on endless occasions demonstrated its generosity and support for charitable and humanitarian causes.

The typhoon which devastated areas of The Philippines recently killing thousands and leaving millions homeless has seen the international community come together to provide support and relief efforts to victims of the disaster. The duty free industry is no exception. Duty Free Philippines, whose COO Lorenzo ‘Enchong’ Formoso is a board member of APTRA, is calling for donations to help the relief work though its Corporate Social Responsibility Programme Duty Free Philippines CARES. Companies and individuals wishing to make a donation can do so by making a pledge to the DFP CARES Typhoon Haiyan/Yolanda Relief Fund.Details are available here. (One month after the disaster struck the nation, this article gives a graphic and detailed report of the relief work underway and considerable rehabilitation work that will be necessary in the months and years ahead.)

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The WIT (Women in Travel) group have made fundraising for charity one of the organisation’s key goals, carrying out fundraising events raising thousands for worthy causes during the annual TFWA events held both in Singapore and Cannes. This year the group has been raising money for ‘A Drop of Life’, a charity which helps bring drinkable water to villages in remote areas of China. Tina Tam, a member of WIT and General Manager Travel Retail Asia at La Prairie, a member of APTRA, visited the project location in China, where the construction of a dam will bring clean water to over 1000 people. Tina reports that, as in many remote areas where water is scarce, the project will enable children to receive an education rather than having to walk long distances to fetch clean water. Individuals and companies have already shown enormous generosity towards the cause. Anyone else wishing to donate to this cause can do so at this website.

Come spend with us

Come spend with us

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Bank of China’s UnionPay International has extended its banking card services to travellers in markets across South East Asia in a bid to facilitate travel – and spending – in China. As TTG explains in this article, the card has been rolled out already in Singapore, Malaysia and Vietnam and 12 other countries are expected to see the card introduced over the coming months. Inbound tourism to China fell slightly in 2012 according to the China Tourism Academy, a trend which has continued during the first 6 months of 2013. Initiatives such as this are hoped to reverse the trend as China seeks new ways to attract foreign tourists as the Academy’s director explains in this article on China’s”People Daily” English news site.

China’s luxury market evolves

China’s luxury market evolves

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With 2.5% growth in luxury spend in China in 2012 (and a similar trend in 2013) compared to more than 30% growth in Chinese luxury spending in markets such as the UK, one may think the Chinese domestic luxury market has bottomed out. According to Chinese news service Jing Daily, this is far from the case. This article on the evolution of China’s luxury market explains how the market is not in decline, but undergoing a fundamental change, according to a panel of experts on brands and marketing in China. Following the clamp down by the Chinese government on gifting among officials, Chinese consumers have opted for less conspicuous luxury consumption preferring connoisseurship to bling. This doesn’t change the fact that the top selling iPhone 5 in China is the gold plated version.

The younger consumer is entering the luxury market through internet retail, which is driving the growth of digital luxury. The article goes on to discuss how home-grown Chinese brands are likely to fare in the fast growing luxury market.

Duty free sales under threat for NZ bound travellers

Duty free sales under threat for NZ bound travellers

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Anti-tobacco research group ASPIRE2025 is calling for a ban on duty free tobacco sales in New Zealand as part of the country’s bid to become a smoke-free territory by 2025. In a letter published in the New Zealand Medical Association journal, ASPIRE2025’s director, Professor Richard Edwards claims duty free tobacco sales “undermines the impact of high tobacco product taxes in promoting smoking cessation and reducing smoking initiation.” The article suggests that the New Zealand government is losing up to NZ$89 million annually in taxation revenues as a result of duty free tobacco brought into the country from inbound travellers. Read the full story here on NewstalkZB. APTRA is currently holding discussions with members and other stakeholders to help defend the industry’s position in this matter. If duty free tobacco were banned in New Zealand, the business – airports, retailers and other category suppliers – both in New Zealand and elsewhere around the region would be significantly impacted.

In the spotlight: Erik-Juul Mortensen

Erik Juul-Mortensen, President Tax Free World Association

Meet Erik

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Known throughout the duty free & travel retail community as the highly professional and erudite President of TFWA, dedicated to the support and development of the industry, few would guess that Erik was once driven by an altogether different ambition: to become the fastest man on two wheels the world – or at least his native Denmark – has ever seen. Here he describes his career, his involvement in the strategic direction of the industry, his concern about current issues affecting its future, and how in his leisure time he harks back still to those youthful ambitions.

Career

Can you sketch the high points of your career and how you first became involved in the duty free industry?

I have been extremely fortunate in my career and there are simply too many high points to list them all. However among them are my many years in international business in Danisco, Danish Distillers, V&S International Brands initially in domestic markets; my two years in Berlin moving from being a long standing Board member to running the business on a day-today business; V&S Absolut Global Travel Retail in charge of global duty free sales of Absolut Vodka and its other fine brands; and finally my five years in charge of Maxxium Global Travel Retail. Here, with an excellent team we created a real difference, every year outperforming the market with growing market share in global duty free and travel retail for the wonderful basket of brands entrusted to us by Beam Global, Edrington Group, Remy Cointreau and V&S.

Two definite high points have been the brands and the people with whom I have been privileged to work and which provided the best possible platform for success.

My first contact with the duty free industry followed two years in the Royal Danish Air Force of which 15 months as a sergeant in the Air Force Police. I joined the Export Shipping Department of Danisco in Copenhagen and a year or two later I was invited to increase my remit by visiting ships chandlers and smaller ferry route operators in Denmark. As it brought a number of new opportunities – and my first company car – I accepted with pleasure!

It was not until 2003 when I was made president V&S Global Travel Retail in Stockholm that I would focus exclusively on duty free and travel retail.

During my time in duty free I have had the privilege to be on the board of the Danish Duty Free Association and ETRF which actually brought a low point for me. In spite of the immense efforts of ETRF and the national associations, intra-EU duty free was abolished in mid-1999. The battle was lost by one vote against from Denmark and that as a result of an internal political compromise in the Danish coalition government.

Another privilege was to be heavily involved in the creation of TFWA in 1984. None of us involved at that time could have predicted the development of TFWA over the last 30 years. At the time we were seven or eight individuals signing on the dotted line which looking back is quite daunting. I have been involved in TFWA ever since. In addition I am a Board member of ETRC and of MEADFA.

What do you consider to be the role of TFWA in the industry?

The role of TFWA is described in our mission statement which can be summarised as supporting the industry, creating a forum for dynamic development and providing it with high-quality exhibitions, worthwhile conferences and workshops, and in-depth market research.

However, I believe the role of TFWA is wider. Through its work it is instrumental in forging close relationships between suppliers and operators and it plays a vital role in representing the interests of its members and the industry as a whole. As an example, TFWA was behind the initiative to create APTRA and assisted in the initial work such as creating articles of association.

TFWA’s commitment to the duty free and travel retail industry is summarised by its motto – by the trade for the trade – which has been unchanged since its inception and I believe is as valid today as it was then. As a non-profit-making organisation with a membership of over 450 companies, including some of the world’s best-known brands and suppliers of premium goods, TFWA’s products and services are focused purely on delivering value to the industry.

What are the criteria by which you judge the success of TFWA events and have the events this year [TFWA AP, China Conference, TFWA WE, and MEADFA] met those expectations?

My mantra is that the existence of TFWA is only justified as long as we keep fulfilling and exceeding the expectations of our members and the industry at large. Personally, I do believe that our events in 2013 have fully lived up to expectations. However, the real verdict lies with our members and the attendees at our events. We cannot rest on our laurels; we must keep evolving, keep pushing ourselves, and it means that the almost 30 years the Association has existed has been a period of constant development and evolution. We spend considerable time asking opinions of our target groups, and after each event we have a thorough debrief where results are measured and improvements discussed. Sometimes these are just small issues, sometimes quite fundamental.

Industry

What do you perceive to be the key challenges to the duty free & travel retail industry today?

As an industry we are faced with many challenges. Tobacco, Alcohol, Confectionery are the most immediate that come to mind. However, there are challenges that directly affect all product categories such as the current aviation passenger security regime. Also the so-called ‘One Bag’ issue where ETRC is putting a lot of effort into securing a satisfactory solution. The alternative could have a disastrous effect on the industry should it spread outside Europe and to more airlines. Footfall and penetration must be a constant challenge just as competition from the high-street and the web must be recognised.

In addition, we have challenges that come to us from outside, be they war, regional conflicts, health issues, natural disasters or the current global economic downturn, which have a negative effect on the number of people travelling.

How can brand owners and other stakeholders help to address those challenges?

Be part of a trade association to strengthen the associations which are working with all these challenges and thus share the burden with those who are on-board already. We are all in it together and we should all support the industry we are in. Unfortunately, this is not fully the case today.

What do you consider to be the role of APTRA and the other DF&TR associations and how do you foresee their development in the light of the creation of the DFWC?

I believe the role of APTRA is clearly defined in supporting the industry in the very important Asia Pacific region dealing with the challenges known and new. APTRA has a lot on its plate, and I think it is vital that the work continues to be very targeted with clear priorities. We must not be diverted by ’nice to do’ things and keep concentrating on ‘must do’ things.

Personal

Could you tell us a little about your personal life, your leisure activities and your family?

I believe most people are aware by now, although I am sometimes surprised, I am married to Sarah Branquinho, who is Business Relations & External Affairs Director at World Duty Free Group, President of ETRC and UKTRF which, however, does not mean that we only talk shop.

We both love walking, travelling for leisure and reading and now with all children having left the nest we are both hoping there will be more time for all these things. So far it mostly remains a hope! In addition we are both involved in a small charity, The Lotus Flower Trust, where Sarah is chairman and I a Trustee. It is not a big charity, which means that everybody has to take a very active part. In the five years we have existed we have built 21 schools, orphanages or homes in remote villages in India and through this improved the lives of hundreds of children and women. Both Sarah and I have spent considerable time in India working on some of the projects, sometimes under quite difficult circumstances. We are both very passionate about the work the charity does – you only need to see the smiles on the faces of children in their new school or home.

Could you explain the reference to speed on two wheels?

Well, it is correct that in my youth I was a very ambitious bicycle rider first on road and subsequently on track. Cycling was my big passion and although my parents were very supportive of my sport they were concerned about the time spent on a bicycle instead of doing school work. Two to three hours every day was the norm apart from Saturday when you rested and prepared your gear for the race on Sunday. This became too much and I then changed to competion on track. With race days twice a week and much shorter distances, training was much more concentrated and better for studies. An additional advantage was that prizes on track consisted of vouchers which you could exchange for cycling gear and other things. My first ever B&O stereo set was bought with vouchers I won – infinitely better than silver-plated cups! I still have a box full of these somewhere in our attic! Today, when time permits, I cycle for fitness and pleasure.

APTRA KPMG 7 city seminar roadshow concludes

APTRA KPMG 7 city seminar roadshow concludes

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The first APTRA retail roadshow, organized in partnership with KPMG around the Asia Pacific region concluded in Bangkok late last month. The retail seminar roadshow was warmly welcomed by more than 240 participants across the 7 cities. APTRA presented the association’s missions and work and focussed on some of the trends in consumer behaviour and market trends affecting the industry. APTRA also updated members on the Responsible Retail Training Programme focussing on the reasons and objectives of the programme. APTRA’s research partner m1nd-set gave a two part presentation, first providing insights into the segmentation research conducted on behalf of APTRA with samples from the top four segments in Asia. Part 2 provided an overview into the future of the travel retail market through progressions in the air travel market, technology & consumer trends, and a look at Asia Pacific traveller behaviour on purchasing patterns, promotions, price perception, gifting and perceptions of airport retail customer service.

KPMG provided detailed insights into their own Chinese consumer behaviour research on Chinese luxury consumers at home and away, a summary of their report on their Consumer Executive Top of Mind survey, insights into the Asian retail landscape and a look at the online retail landscape and potential.

APTRA would like to extend its sincere appreciation to KPMG for hosting the event at its offices throughout the region. The association would also like to thank Estée Lauder Companies for sponsoring the networking lunch after the Singapore seminar.

Members pledge additional support

Members pledge additional support

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The APTRA board would like to express sincere thanks and appreciation to all those companies which have gone an extra mile in 2013 to support the association’s advocacy work. Earlier this year a total of thirteen liquor companies made special contributions to APTRA to help fund the proactive advocacy missions around responsible retailing. The majority of the major liquor suppliers have collectively funded the Responsible Retail Training Programme which will be rolled out during 2014.
In addition, two tobacco companies have also recognized the need to help the association in its advocacy missions. Conveying to national governments and other institutions the unique nature of the duty free trading environment is key to protecting the interests of all categories. “It is one shopping basket”, says APTRA President Jaya Singh,“If one category is hit by unreasonable regulation,all others suffer.”

Any company wishing to provide further support can do so through voluntary contributions, sponsorship of the research reports which are read by key decision makers in the industry around the region or through sponsorship of the seminars organised by the association. For more details, please contact Michael Barrett: michael@aptra.asia

Tell us what you want…

Tell us what you want…

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As mentioned in the October newsletter, APTRA will invest further into consumer research in 2014. To ensure the association’s research is in line with the needs and expectations of our members, we are giving all members the opportunity to tell us what you think would be of most interest to your company and APTRA members.

To respond to this survey and help shape the future research work please click here.

Thank you in advance for your cooperation.

Generation Asia Pacific Index Update: Asia Pacific nearly doubles global growth rate

Generation Asia Pacific Index Update: Asia Pacific nearly doubles global growth rate

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The latest edition of Generation’s Index Asia Pacific reveals the world’s fastest growing region for duty free sales has achieved growth almost double that of the global rate for the first three quarters of 2013. Spurred on by robust arrivals figures across the region, the duty free sales have grown by almost 13% already. Although less dynamic than the 19.4% growth seen in 2012 across the region, the outlook is rosy for the future. The report highlights the positive forecasts for the growth of travel over the next 10-15 years, projecting a 160% growth of tourism arrivals by 2030 to more than 530 million. The full report and charts are available to members in the members’ only section of the APTRA website. For further detailed information and insights on developments in the sales and market shares of categories, channels, countries, locations, companies and brands in Asia Pacific – please contact info@generation.se. or Malin Eriksson on +46 660 103 20.

Asia Pacific consumer insights report: Chinese travellers

Asia Pacific consumer insights report: Chinese travellers

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In this month’s Asia Pacific Consumer Insights update, m1nd-set reports on the top five Chinese traveller segments, representing 70% of the Chinese travelling consumers. Detailed insights are given for the top two segments, “Inspiration seekers” and “Low-income promotion swayed” as well as an overview of the following three segments : “Emotional high spenders”, “Authentic product seekers” and “Conventional deal seekers”. According to m1nd-set, the Chinese “inspiration seekers” segment are not price sensitive and do not compare prices with high street stores. Two thirds are male and two out of five travelers in this segment travel for business. They have a high shopping frequency, with 3 out of 4 travellers shopping at airports on every trip. “Low-income promotion swayed” travelers are also among the high frequency shoppers, albeit less than the previous segment, and with a similar gender split. Like the “Inspiration seekers” they are not too price sensitive, despite their lower income bracket. Detailed charts illustrating these findings can be found in the members’ only section of the APTRA website.