TOP 5 ASIA OPERATORS REPORT: OVERVIEW


Asia remains an engine of growth


According to Generation Research, Asia Pacific DF&TR sales reached $25.3bn, +2.3% yoy in 2015, making it the only region to register any growth in a very challenging year. The region’s continued growth over the first nine months of 2016 (+11.5%) only confirms that this part of the world is still the driving force of our industry, as Charlotte Turner reports.


E


ncouragingly, in the first quarter of 2016 the Asia Pacific region was able to more than


double its 2015 DF&TR annual growth rate to +5% year-on-year, and for the first nine months of last year sales increased by an even greater +11.5%. This is according to Generation


Research figures which were shared by TFWA President Erik Juul-Mortensen at March’s China’s Century Conference in Guangzhou. The driving force behind Asia


Pacific’s growth and indeed the rest of the world remains South Korea. However, in 2015, operators in the


world’s biggest duty free and travel retail market navigated a challenging year as the highly publicised MERS outbreak heavily impacted sales. Fortunately the market appeared to rebound strongly in 2016. Last year, the country’s leading


retailer, Lotte Duty Free registered record-breaking sales of $5.7bn in South Korea alone following a near- disastrous year in 2015 as a result of MERS, which saw many tourists holiday elsewhere. Despite this, South Korea still registered $8.14bn in DF&TR sales


MAY 2017


in 2015 and last year it was able to recoup its losses (and then some) as this figure grew by a colossal +30.9% to $10.6bn. Although Lotte’s sales rebounded


strongly in 2016, last year will also be remembered as a tumultuous one for the company which was embroiled in a massive corruption scandal, which eventually led to the arrest of former South Korean President, Park Geun- hye (as Doug Newhouse reports on p49).


DFS’ momentum improves Although second-placed DFS Group was not too directly affected by the MERS outbreak in 2015 or mired by any headline-grabbing scandals, it did continue to face a challenging trading environment in Asia; notably in Hong Kong and Macau. This continued into 2016. Parent company LVMH mentioned


that DFS was ‘under pressure’ in Asia in its financials statements over the course of 2016. However, in its most recent


disclosure (Q1 2017), LVMH revealed that, ‘momentum at DFS in Asia improved, while the T Gallerias – opened in Cambodia and Italy in 2016


– continued their development’. Comments made to TRBusiness by


DFS CEO Philippe Schaus recently, chimed with the LVMH statement: “We clearly see a strong rebound downtown in Hong Kong and downtown in Macau. “In Macau it’s clearly driven by


the once again growing casino industry. The market is stabilising and the customer has evolved. We’re now serving a more fashion-conscious customer.


Above: Lotte triumphantly reopened its World Tower store this year.


Shilla says it will introduce 100 new brands to HKIA.


South Korea still registered $8.14bn in DF&TR sales in 2015 and last year it was able to recoup its losses (and then some) as this figure grew by a colossal +30.9% to $10.6bn.


TRBusiness TRBUSINESS 45


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