Retail in Asia


Bluebell Group strengthens China presence, through the full acquisition of Star Brands Travel Retail

The Bluebell Group, Asia’s leading brand operator and distributor, announced today it further strengthened its China operations by completing the full acquisition of Star Brands Travel Retail, a travel retail operator in China’s Hainan duty-free hub. The deal will establish its longstanding partner, The Bluebell Group, as the sole owner of Star Brands Travel Retail.

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The new entity, part of Bluebell China, offers global brands already present or looking to enter the Hainan travel retail market a wide range of brand operation and management services. Leveraging the Group’s leadership in travel retail and long history of partnership with global brands, together with the existing brands portfolio initiated by Star Brands Asia, local China expertise and on the ground team, the Bluebell China travel retail team will facilitate local operations and navigation of the travel retail opportunity Hainan represents for brands in China’s local duty-free market.

The range of services Bluebell China offers in Hainan include entry into the major duty-free operators on the island, business planning, retail management and staff training, image and marketing management, digital amplification, as well as retail store development.

Bluebell Greater China Managing Director Samy Redjeb (see full interview below) expressed his delight in consolidating Bluebell Group’s China presence: “We are excited to now be fully operational in China and accelerate the potential of the China travel retail opportunity for our brand partners. Thanks to the great groundwork by the Star Brands Travel Retail team over the past two years, we have a strong versatile local team, two offices and resources on the ground for store construction and VM project management in partnership with Sina Retail; our aim now is to expand our promise of retail excellence in the local China travel retail market for the success of our brand partners.”

Rob Robertson, Founder and CEO of Star Brands Asia, added: “The Bluebell Group’s full acquisition of Star Brands Travel Retail is a natural evolution of our long term partnership in China. Over the past two years, the Star Brands Asia team built the travel retail business, Star Brands Travel Retail, through our local expertise and understanding of the Chinese market. We have put in place an outstanding team, forged local relationships and developed a diverse portfolio of brands, and will remain involved to support a seamless transition and develop synergies with our Star Brands Asia domestic business.”

Interview from the Moodie Davitt Report with Samy Redjeb on the great Hainan opportunity

On the eve of the announcement of The Bluebell Group having completed the full acquisition of Star Brands Travel Retail, Bluebell Greater China Managing Director Samy Redjeb spoke to The Moodie Davitt Report Chairman Martin Moodie about the significance of the deal.

“A new chapter for Bluebell.” That’s how Bluebell Greater China Managing Director Samy Redjeb describes the full acquisition of Star Brands Travel Retail by Bluebell China. A new chapter, in fact, of a very long-running story. Bluebell has been active in China for some four decades, having introduced Louis Vuitton to the market there, followed by a series of other fashion and luxury brands in ensuing years.

In 2018, Bluebell invested in Star Brands Asia, a company founded by American beauty sector specialist Rob Robertson in 2009 focused on bringing the world’s best niche beauty brands to China. Bluebell stepped up its China local market presence in September 2020 by investing in Shanghai-based Translatio, a company founded in 2003 by Angelo Negro and Jimin Lee.

The deal with Translatio created what Bluebell called Asia’s most comprehensive omnichannel distribution network for the luxury sector, with a strong presence across fashion and lifestyle product categories.

The success of these partnerships and the sustained boom in Hainan’s offshore duty free market led to the two partners creating Star Brands Travel Retail in April 2021, today Bluebell China. The venture was designed to unlock the potential for global brands entering what had become Asia’s and the world’s modern-day travel retail hotspot.

Samy Redjeb, appointed to his current role in August after a stellar 11 years-plus career with Bluebell, says that the long-term importance of the Hainan market warranted the group having a more permanent presence there. It was then decided to fully acquire Star Brands Travel Retail to build in-market strength in both Haikou and Sanya in Hainan province.

“I said, ‘Let’s not try to reinvent the wheel’,” Redjeb recalls. “With an existing team on the ground, we already had local expertise in market. We were representing some good names with brands such as Diptyque, Dr. Ci:Labo and Rémy Cointreau. Plus, we just concluded a contract for Havaianas. Under Bluebell China, we have already ten brands now, and a team of 25 staff in Hainan.

The category base, though led by beauty, is deliberately diverse, also including fashion, spirits and lifestyle products. In the case of the hugely successful Brazilian flip-flops brand Havaianas, Bluebell China will handle both duty free and duty paid channels in Hainan.

Earlier this month Redjeb, made his first trip to Hainan, visiting stores in the hotbeds of Sanya and Haikou as well as the Wangfujing operation being developed in Wanning and set to open in 2023.

“The market opportunity is there,” he says. “I was super impressed by the infrastructure over there – the hotels, the roads, the airport quality, the retail spaces. I was also excited to see the quality of the duty free players there. CDF, of course but with, say, HTDF I was very impressed by their brand mix and range.”

“Bluebell China will concentrate on Hainan as a first step because I think the opportunity there is immediate. We expect 20 to 30 million visitors in 2023 from the numbers we’ve got. And with the RMB 100,000 (USD 14,350) annual allowance and the fact that we don’t know when China is really going to open up the border for international travel, Hainan is very important.

“And even when China does open up, we still believe that Hainan will remain a key destination because less than 10 percent of the population hold a passport today to travel outside of China. So Hainan for us is going to remain a very important destination for Chinese travellers. All the infrastructure and all the set-ups are in place. And it’s a shopping paradise for consumers with the RMB 100,000 allowances.

“There have been a lot of new store openings during the last two years. Because of the pandemic, no-one outside China could see the new CDF complex, for example in Haikou, or the new development with Hennessy or the Wangfujing development in Wanning. So they need people on the ground. They need our support to monitor the business, to help them to pitch the operators, but also to help in terms of retail operation management, which is a big issue for many brands in Hainan.”

Such challenges are hardly surprising given that – incredibly given its scale – the Hainan offshore duty free market is just 11 years old. In several cases – HTDF, GDF Plaza, Times DF, and CNSC – the retail operations have been open for less than two years. Any market so young and yet burgeoning to such an extraordinary extent is likely to experience growing pains, which is where Bluebell China enters the scene.

“For our brand partners, we are their team on the ground,” says Redjeb. “We support them on various aspects of their business. Being on the ground, we are on top of the latest trends as well as regulations, and know where and how they should try to push their brand. So we provide support in areas from the business plan development, for example, market entry, as well as staff recruitment & ongoing training and marketing amplification.”

While the DFOs have their own shop floor employees, Bluebell China puts additional sale associates or brand ambassadors in place for its brand partners and this can make significant differences in terms of customer engagement and conversion.

“These teams are trained by us so they know about storytelling and service. We also do a lot of visual merchandising. For example, when the new CDF store opened in Haikou, we helped brands to handle the overall set-up overnight and to merchandise the stores because everything was opening at the same time.”

Bluebell China is increasingly involved in marketing activation too as brands realise they cannot simply rely on footfall but need to proactively engage with the consumer. With Bacardi, for example, the company does a lot of event work with KOLs, local hotels, arranges mixology demonstrations and tastings. With Havaianas – for whom Hainan is seen as an ideal showcase for the wider China market – a similarly proactive and engaging approach is being adopted.

Given its expertise and heritage, Bluebell is never short of opportunities to bring new names to market. So what are the criteria for working with a brand? “First, we look at the size. We cannot pick a brand that is too small,” Redjeb replies. “In duty free it’s hard to get a space or a counter, or even a gondola, even for an international brand. The retailers are becoming pickier, and they have limited space. So we need to have brands that already have some traction in, say, Korea duty free or in Singapore duty free or some level of international presence.“

“They also need a strong presence in the domestic China market. If brands are unknown in China domestic, it’s very hard because Hainan is catering to Chinese shoppers only and if the brand does not have local awareness, it is more complicated. “

Category-wise, Bluebell China will focus mainly on beauty and fragrances and wines and spirits. Some fashion and accessory brands will be included although they are currently outside the core focus.

“We have a lot to do in beauty and spirits, and fragrance is a category that we want to develop,” Redjeb comments. “I was impressed by the number of niche fragrance brands that are expanding in the Hainan market, including Atelier Cologne, Penhaligon’s, L’Artisan Parfumeur, and Maison Margiela. Bluebell has a very, very strong portfolio of perfume in Japan where we are the biggest perfume distributor. And we also have a strong market in Korea travel retail and domestic. So, again, I think we will find synergies for our other partners in the Hainan market.”

Redjeb says the Hainan development is “super exciting” on a personal level. “It’s a big challenge because we are a leader in Korea duty free so there are high expectations from our shareholders. But the Hainan market is completely different in terms of model and so on. I’m very optimistic about the market, and I’m confident our regional expertise in this sector with our on the ground teams and focus on quality of service puts us in a good position to support brands on the ground.”

The synergies between Star Brands Asia and Bluebell China offer a strong advantage to brand partners in China, Redjeb says, in that there is no conflict of interest between the local market and duty free. That is not always the case with brands which operate directly in China, where tensions between travel retail and local teams in areas such as pricing and marketing spend often simmer.

With Star Brands Asia and Bluebell China no such dilemma exists. “We share brands likeMalin+Goetzand Moroccanoil and we have very strong synergies,” says Redjeb. “In actual fact, we have been working closely with Rob in Hainan since he launched the business there, and some key brand partnerships spawned from that collaboration.”

Underlining its belief in and commitment to the market, Bluebell China is about to bolster its existing Sanya office with a second base in Haikou, which will be operational in January. The new chapter is truly taking shape.

SEE ALSO: Bluebell Group expands fragrance concept L’Atelier des Parfums to Korea

Asked if he has a final message for the industry, Redjeb says, “They should come and visit Hainan as soon as they can. Get on a flight because there are many locations worth a visit, local knowledge is crucial as well as an understanding of the level of the quality of retail and staff over there.”

Retail in Asia is part of the Bluebell Group.