In Trends

Travel retail in focus

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Asia travel retail has been the bastion of luxury – but does this need to be reassessed in the era of currency fluctuations, austerity measures and shifting demographics? It’s time to redefine luxe.

Asia Pacific is a region prone to generalizations. A top statistic to come from the excellent TFWA China’s Century Conference last year was that just 4% of Chinese citizens own a passport. The potential is immense.

And with burgeoning middle classes in the likes of Indonesia and Vietnam, there is no shortage of budding shoppers as passenger numbers swell.

How can retailers and brands best harness this spirits sales potential against a backdrop of increasing austerity, currency fluctuations, and the real risk that, in a luxury environment, many prospective customers could be priced out?

SEE ALSO: Asia-Pacific most vibrant market for duty free, travel retail 

First of all it’s about understanding the intricacies of the region, says Vinay Lamba, purchasing director, Heinemann Asia Pacific. “Asia is quite large and consumer behavior in one part differs quite significantly from consumer behavior in other parts”

“In South East Asia, which is where most of our business lies today, borders see much more traction in the entry level spirits, while airports see a much larger offer on premium products”, he added.

With some of the biggest airports in the region offering the most luxurious approach, does this remain compatible with the increasingly price-conscious consumers? said Tim Fulton, liquor buyer at ARI Auckland.

“Ultimately we want to ensure that there is always ‘something for everyone’ including the lower end spirit.”

SEE ALSO: Automated technology to boost airport passenger spending 

“It is a balance, as having too much of one product mix is really problematic, i.e. driving spend down or alienating your customers with product that is priced too high so they just don’t want to shop with you.”

Diageo Global Travel Middle East (GTME) is “committed to setting the standard in luxury retail” but acknowledges that ‘luxury’ can no longer be exclusively about price.”

“We realise the ongoing global volatility is unlikely to change, this is becoming ‘the new norm’, and that we need to work harder than ever to deal with unpredictable movements across categories and geographies going forward, as well as working closely with our retail partners to build this positive value proposition.”

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