TFWA ASIA PACIFIC


Evolution must protect the ‘value proposition’, says TFWA


Secondly, global economic


activity strengthened in 2017, with emerging and developing Asian markets forging a strong path as the International Monetary Fund revises its growth forecasts for 2018/2019 to 3.9%.


Delegates attending the recent TFWA Asia Pacific Conference heard that DF&TR sales grew by 8.1% to reach $86.6bn in 2017, according to preliminary figures from Generation Research. Luke Barras-Hill and Andrew Pentol highlight the key talking points from the Marina Bay Sands Expo & Convention Centre (6-10 May).


Above: A seven-strong panel of industry executives debated a number of key issues during the second plenary session of the TFWA Asia Pacific Conference. Source: TFWA


I


n his opening address, TFWA President Erik Juul-Mortensen revealed the ‘powerhouse’ Asia


Pacific region fuelled the industry’s global sales return, with growth of +11.6% year-on-year to $30.6bn. The most lucrative and fastest


growing segment in Asia Pacific, which accounted for a 45% share of global sales, remained perfumes & cosmetics at $14bn and +19.9%, respectively. Growth within wines & spirits


“Our value proposition remains under threat, as is our ability to compete convincingly with m-and e-commerce. Virtually every retail sector with a bricks and mortar component is having to redefine how they are doing business with


consumers – and very quickly.” Erik Juul-Mortensen, President, TFWA


26 TRBUSINESS


followed in second at +12.9% to notch $3.9bn in revenue. Airports took the lion’s share of


sales at $38.3bn (+7.7%), closely followed by other shops at $25.5bn (+9.3bn), while the ferries business grew to $2.2bn (+7.4) and airlines showed modest improvements (+4.2%) to $2.6bn. Juul-Mortensen outlined how


the performance of the industry continues to be influenced by two important factors, beginning with the growth in its potential customer base backed by a rise in global passenger traffic of +8.4% last year, according to Airports Council International (ACI). In the case of Asia, the figures tell an important tale. “For example, Kuala Lumpur


Airport saw its international passengers grow by 14.7% and Narita by 13.6%,” he said. “Singapore Changi, Bangkok, New Delhi, Jakarta and Guangzhou all broke through the 60 million passengers total, and both Shanghai and Hong Kong surpassed 70 million.”


‘Downside geopolitical risks’ However, global geopolitical challenges pose certain downside risks, delegates heard, particularly in light of the current US Trump administration and its attitude towards global trade, the UK’s Brexit debate, and delicate diplomatic relations in Korea and China. Continuing, Juul-Mortensen said


the pressures on the DF&TR industry have never been greater. The airport business model has placed heavy demands on retailers, particularly in Asia Pacific, leading to contract terminations or re-negotiations ‘on less onerous terms’. “Our value proposition remains


under threat, as is our ability to compete convincingly with m-and e-commerce,” he explained. “Virtually every retail sector with


a bricks and mortar component is having to redefine how they are doing business with consumers – and very quickly. “Not surprisingly, airports are


investing massively in technology to provide a constant, relevant stream of communication to these digitally- connected passengers. Integrated POS and CRM systems, i-beacon technology, wayfinding solutions and omni-channel commerce solution providers have made the passenger reachable whenever they are in the vicinity of the airport or duty free shop. We need to ensure we are part of that digital ecosystem.” Taking to the stage next was


Andrew Ford, President, Asia Pacific Travel Retail Association (APTRA). He began by reiterating Juul-


Mortensen’s sentiments that Asia Pacific is forging ahead in


JUNE 2018


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