SINGAPORE. Welcome to our day-by-day coverage of TFWA Asia Pacific Live 2022 in Singapore, which ended on Wednesday. The show made a welcome return as an in-person event after a two-year absence due to the pandemic.
Our rolling coverage featured our choice of the week’s highlights in words and images, from Monday (scroll down) to Wednesday.
THURSDAY 12 MAY
TFWA announced that 677 delegates from 235 companies attended the event at the Marina Bay Sands Expo & Convention Centre over the three days. This included 261 representatives from 43 buyers and landlords, 100 representatives from 56 agents, and 206 delegates from 83 brands, plus other partners and media.
The TFWA One2ONE meetings service saw 411 meetings arranged, alongside the networking lunches and hosted coffee breaks.
WEDNESDAY 11 MAY
The final session of the TFWA Asia Pacific Live Networking Event was titled ‘Digital Transformation in South East Asia’. It featured Meta Business Group Scaled/SMBs Director Dhruv Vohra and Bain & Company Partner Praneeth Yendamuri.
Vohra and Yendamuri discussed the rise of social commerce, cashless payment, last mile fulfilment and the region’s migration from offline to online. The session highlighted key themes from Vohra and Yendamuri’s recent report called ‘Southeast Asia, the home for digital transformation.’ This includes the role that social media has in influencing everything from consumer trends to national elections.
They also discussed how the move from web 2.0 to web 4.0 will impact the way brands engage with consumers. In China, 36% of all purchases are made online; in Southeast Asia this figure is 9%. Vohra predicts that new technologies like AR and VR will transform the ecommerce landscape in Southeast Asia over the next decade.
TUESDAY 10 MAY
A key discussion on day one focused on the changing dynamics in wine & spirits. It explored how new consumer trends can create opportunities for brands and retailers in drinks and beyond, the role of omnichannel and how global brands see travel retail. The panel discussion featured: Brown Forman Global Travel Retail VP Managing Director Aude Bourdier, Duty Free Global Founder & Commercial Director Barry Geoghegan, Distell International Head of Europe & Global Travel Retail Luke Maga and Lotte Duty Free Oceania CEO and Director Stephen Timms. The session was chaired by DFNI Editor Kapila Ireland.
Panellists began by addressing the new consumer and latest trends in the market. Aude Bourdier highlighted the sense of discovery that she said prevails among many travellers today. “The new generation, especially those that travelled abroad, have seen other brands, and are eager to discover and enjoy.”
Barry Geoghegan said: “The experience of COVID changed the dynamic of on-trade versus off-trade. People were making cocktails at home and we see that continue, with the expansion of RTDs in Asia also. We see the evolution of Irish, Japanese and American whiskies, aided by the influences of KOLs. We see gin now as a factor in Asia, which it wasn’t before. Younger people want to buy things they never experienced before. We also have to consider all Asian nationalities, not just focus on China as in the past.”
Luke Maga noted: “We see a lot of experimentation. There is great growth in single malts, we see it in our own spirits and liqueurs.”
Steve Timms said: “We see a push towards localisation and craft. We see growth there, and expectations among travellers who want to see this. There are gins, whiskies and international travellers want to engage with those products, especially at the premium end. We do need to reimagine how we are different. The consumer has been trained to buy online and that’s difficult for duty free. So we need to engage and make travel retail different from before.”
On the return to travel and consumption, Bourdier said: “We have adapted. We see younger consumers who are willing to engage. The fundamentals are still there. They want gifting, self-treat and to treat themselves.
“It’s important to note that we are here for the long term, not the short term and GTR is about the longer term. We will see Asia come back, it may take longer than other markets, but it will come back.”
Luke Maga said that while travel retail is a “shop window to the world” it has been difficult to justify allocating super-premium products to the segment in a period of limited travel, notably when domestic market sales are strong.
“We still champion the channel but it’s becoming more challenging. As a channel and category we must reflect on the lessons of the past two years. Who are the consumers? Have we got the right products and the right staff on the shop floor to engage with the appropriate nationality? There is an educational aspect in talking about mixability of cocktails for example. It’s time to reset, look at the range and assortment.
“That means engaging the retailer, ensuring people cannot just walk past the store. People we see will pick up a local whisky over a bigger brand. It’s about taking a white paper approach, asking how do we get the new consumer in the door?”
Barry Geoghegan added: “For the younger generation we have to make the assortment relevant. I want something special, different, that reinvigorates the assortment and mixes it up a bit more.”
Geoghegan highlighted the complexity of the business now with raw materials in such short supply and as prices change quickly. “Short-term there will be pinches but we hope travel retail will remain key to brands.”
Steve Timms said: “We need to start with a clean sheet of paper. Supply is not easy. Everyone needs to plan well in advance, allowing us to forecast while accounting for supply chains ramping up again. We are reinvigorating people about the excitements of duty free but we cannot disappoint them because if we do, they won’t come back.
On the omnichannel opportunity, Timms said: “It’s about connecting with the consumer before they reach the store to the time when they get back to their home country. If you do that then you’ve achieved an omnichannel strategy.”
Other speakers highlighted the importance of a joined-up approach from the industry Trinity. Luke Maga said: “We are doing work on in-store activity, trying to capture the traveller in a 10km radius before they reach the airport, and drawing them in, via geo-targeting. But that could cost you £40-50,000 for a few weeks of data. That’s before we pull stock from the shelf. It has to evolve. It is our job to help the retailer pull the sale through, understand the customers, ensure we are putting the product though that sells. It needs a joint approach.”
Barry Geoghegan added: “There must be shared investment. It’s crazy not to share information and data; the reality is we need to do it.”
Aude Bourdier said: “It’s the same consumer through the journey so how do we as brand owners ensure the message is holistic?”
In a special session on India, Delhi Duty Free CEO Ashish Chopra offered an encouraging view of the rebound, notably in the past two months as international traffic restrictions fell away.
He said: “We have started the year well. We expect to recover to 95-100% of previous sales levels in 2022. From October to March we did 66% of our pre-pandemic sales. But in the last two months (March and April) we have clicked around 88% of previous sales, with pent-up demand, as traffic reached 70%.”
Chopra highlighted trends in shopping from Delhi Duty Free’s latest financial year (FY22) compared to 2020, Spend per passenger has risen +25%, ATV is up +32% but penetration is down -5%. He said: “Once the blue collar or budget traveller comes back, penetration will be key and that will drive the industry forward. That is what we must focus on. People will not all spend +40% more when we have 100% of travel back. We have made good progress but what we must do is ensure there is something for everyone in the assortment.”
Bangalore International Airport Ltd Assistant Vice President – Commercial Development Pravat Kumar Paikray addressed commercial developments at what he dubbed the ‘new gateway to India’.
As reported, BIAL has been managing RFPs for its core non-aeronautical channels in the new T2 in recent months. This includes a 15-year joint-venture agreement with a duty free partner, the winner of which will be announced shortly.
Paikray said that the dream of a new terminal in a garden – Terminal 2 – is set to become reality in the next six months. “We aim for Bangalore to be a new home for shopping and dining. Tender processes are almost complete.”
The airport will feature numerous firsts for India, with a blend of local and international names. Big F&B names include Wolfgang Puck and UK chef James Martin, alongside brands such as Giraffe, Starbucks, KFC and Subway. First-time entrants to Indian airport F&B include Hard Rock Café, Johnny Rocket’s, Wendy’s and Jamie Oliver’s Pizzeria. There will also be a micro-brewery inside the airport.”
Fashion brand names will include Hugo Boss, Muji To Go, Swarovski, Michael Kors, Armani Exchange, Tumi and Superdry, as well as Hamley’s toy store.
Beam Suntory Managing Director Global Travel Retail Ashish Gandham said that travel retail represents a “premium connection to the global traveller” and a key brand-building opportunity for the brand owner.
He said: “We have shown commitment to the channel over the past two years, with people at the core of what we do. We have retained our teams, we have enhanced collaboration with our partners and continued the innovation agenda while investing in experiences.”
On the Indian opportunity, he said the traveller demographic remains highly valuable. “The shopper is hyper-connected, they grab trends fast and the infrastructure is coming to support that.”
Gandham also highlighted the powerful role of sales staff, especially in the spirits category – people now want to interact more than ever with staff, he said.
“The traveller now has high expectations, whether it is assortment of an elevated in-store experience. Innovation and exclusive will be critical, and we must tailor offers to specific groups and value pools. They want a seamless, digital in-store experience, with an experiential and immersive offer.
“It’s not only about the store but about the Trinity model at work to deliver that experience. That path to purchase must be taken care of, by all parties. We must use data to anticipate trends and adapt the offer, and navigate challenges such as manpower and supply collectively.”
Click here for a detailed story on this session.
Digital Futurist and Innovation Strategist Charlie Ang gave a compelling keynote presentation on the macroeconomic factors that will impact businesses in the 2020s. The key megatrends he highlighted are the fourth industrial revolution, the climate emergency, geopolitical disorder and ageing demographics.
According to Ang, the convergence of these factors is the strategic inflection point that will make or break businesses in the next decade. He also underlined the fourth industrial revolution as having the most impact on consumerism. This revolution refers to the fusion of technology that blurs the lines between physical, digital and biological.
“When compared to previous technology revolutions, the fourth revolution is evolving at an exponential rather than linear pace, disrupting almost every industry in every country,” Ang said. “Technology 4.0 will reshape society.”
Asia Pacific Travel Retail Association (APTRA) President Sunil Tuli expressed his optimism for the rebound of travel in the Asia Pacific region. He said, “International borders are opening to vaccinated travellers, giving us hope that things are headed in the right direction.
“We must never lose sight of the opportunities in this region which remains the engine room of travel retail,” Tuli added.
“We are in a prime position to move recovery forward. According to the World Travel & Tourism Council’s 2022 Economic Impact Report, the Travel & Tourism sector across Asia Pacific is set to rebound significantly, creating almost 77 million new jobs in the next decade.The sector’s contribution towards GDP is forecast to grow at an average annual rate of +8.5% between 2022 and 2032, more than double the +4% growth rate for the region’s overall economy.
“The 2022 report marks a significant positive step forward for our industry which was left reeling by the impact of the pandemic, due to the widespread introduction of unnecessary and hugely damaging travel restrictions…What we have right here in this region is an unmatched opportunity to drive our recovery and revitalise our long-term performance. The way to optimise that recovery is to work together, to share information, strategies and tactics. I can promise you that APTRA will be doing exactly that and will be with you every step of the way.”
TFWA Managing Director John Rimmer officially opened the first session of the TFWA Asia Pacific Live Networking Event 2022 on 10 May. Rimmer gave an overview of the workshops and keynote sessions that will run over the next two days and highlighted the importance of meeting face to face in driving industry recovery.
He was followed by TFWA President Erik Juul-Mortensen who welcomed delegates to to the event. Commenting on the revised format of the TFWA Asia Pacific Live Networking Event, Juul-Mortensen said: “When it became clear in early March that conditions were not yet right for a return to our usual conference and exhibition format, feedback from TFWA members still indicated a strong desire to get together in person. Thanks to the Singaporean authorities’ success in managing the pandemic, the proactive approach of the Singapore Tourism Board and the generosity of our official host Changi Airport Group, a revised event format became feasible, and so here we are.
“As travellers emerge from COVID-19, it’s clear their outlook has changed,” Juul-Mortensen added. “Our priority is to keep pace and even anticipate those new expectations. They will continue to evolve and so must we.”
Juul-Mortensen expressed a positive outlook on industry recovery and stressed that spend per passenger is increasing across the board. “Heathrow’s retail revenue per passenger was up by +5.8% in 2021, Paris Charles de Gaulle’s increased by +13.1%, with the trend extending to other regions. Dufry’s annual results revealed that spend per passenger exceeded 2019 levels location by location,” he added.
He also directly addressed the companies that don’t actively contribute to TFWA’s events, particularly those who rent suites or meeting rooms outside of the exhibition halls.
He said, “I make no apology for calling out companies that seek to profit from TFWA World Exhibition & Conference without contributing to it. I’m talking about those who occupy a table, hotel suite or apartment nearby, instead of taking stand space on the Exhibition floor. We do our utmost to make sure the show works for exhibitors as well as visitors, whose time is more effectively spent if they concentrate all their meetings inside the Palais, so we ask those attending – exhibitors and visitors – to play the game and demonstrate their commitment to the event and the Association.”
MONDAY 9 MAY