For the travel retail marketplace, Chinese shoppers are still the predominant target customers as they resume overseas trips. We round up key insights from the TFWA Asia Pacific Exhibition and Conference 2023.
Regional rebound
Post-pandemic, the Asia-Pacific region is recovering later but stronger than other parts of the world. ‘Our business is bouncing back, passenger traffic is growing and travellers are shopping again,’ saidTFWApresident Erik Juul-Mortensen. ‘Asia-Pacific has been slower to recover than other regions, but the lifting in January of travel restrictions for outbound Chinese was a major boost. Asian destinations such as Thailand, Japan and [South] Korea are benefiting first, with long-haul travel at scale likely to follow later.’
Owing to the continuing high costs of international travel for Chinese travellers and fewer direct flights, the region’s air hubs such as Singapore and Hong Kong are seeing longer transfer times for passengers, which means more opportunities for duty-free shopping in these locations, said Marina Giuliano, vice-president of brands, retailers and media at aviation consultancyForwardKeys.
Key takeaways
Spirits and beauty brands are investing in updated travel retail activations that create multiple digital touchpoints throughout the traveller journey, harnessing AI to use hyper-personalisation tools
This year’s event highlighted more sustainably produced brand showcases, in tune with consumers’ expectations to re-use, recycle and re-invent their physical spaces
Brand communications are becoming more collaborative, intuitive and designed with technology at the core to encourage an ongoing conversation with travel shoppers
Its data shows that global overseas Chinese travel is set to reach 32% of pre-pandemic levels in Q2, up from just 17% in Q1.
Courvoisier boutique store, Haikou International Shopping Mall, Hainan
Driving digital loyalty
Investing in digital touchpoints and enhancing brand loyalty were key topics covered by travel retailers speaking at the conference – as well as a focus on catering for Gen Z and younger Chinese travellers.
Dufry’s president and CEO Asia-Pacific, Freda Cheung, said that the global travel retailer’s strategic partnership with Alibaba in Asia will leverage growth through technology and reach. ‘Alibaba’s strength is technology and innovation, while Dufry’s strength is our network with more than 1,200 locations and over 5,000 outlets.’
She said the two operators are working together to increase engagement and touchpoints. ‘AI on the back end is critical to tailor the customer journey – we need to do more to customise and personalise the duty-free offer.’
‘We want to turn travel time into valuable time by creating attractive exciting retail environments for travellers and balanced by more digital environments,’ said Marvin von Plato, CEO ofHeinemannAsia-Pacific.
‘As with every opportunity in APAC, we prioritise and then decide to grow per location. Our new stores at Sydney Airport have all been renovated, tailored to a new mix of international travellers with Chinese a major component, for example. Plus, in domestic [travel] there are 27m annual passengers we see as 27m potential touchpoints, and we are looking to expand our brand experiences here.’
‘There is a big shift in Gen Y and Gen Z defining their own travel plans. Younger travellers gravitate to more digital engagement needs; intelligence plus AI will be the differentiator for targeting travellers – now it’s about when they want it, how they want it and make it personalised.’
Freda Cheung, president and CEO Asia-Pacific, Dufry Group
Want to read more? Become a member today!
Get unlimited access to a hive of insights - from microtrends and macro trends to market reports, daily news, research across ten key industry sectors and much more.
