TOP 5 ASIA OPERATORS: DFS GROUP
from the initial 50 to today’s 350. According to Yong, the company’s
retail revenue has quadrupled in five years to RMB1.65bn in 2016 (in the first year of operation the company registered RMB 380m). Yong also claims that the operation has maintained an average annual growth rate of 44%. “For us it’s a great way for us to
bring our expertise and our support to the tourism experience on the beautiful island of Hainan and of course if there would be other opportunities of that type we would be happy to pursue them as well,” says Schaus. “Very often we appear with our
own brand such as the T Galleria or DFS and then sometimes we appear in the background supporting others to do a great job.”
Preserving price corridors Another topic which Schaus covered during his presentation in Guangzhou was the importance of preserving price corridors; something which he has spoken about before on numerous occasions. As price comparing on the Internet
as well as dedicated new airport duty free shopping apps becomes commonplace, there has been a call from some in the DF&TR industry for retailers to be more transparent with their pricing structures. It has even been suggested that competing retailers should have a more open dialogue with each other in an effort to make prices more consistent from location to location. However, Schaus believes that this
could erode the value proposition in the market. “The basis of travel retail remains
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at home, then why would you shop? “If I can buy a bottle of liquor at
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Hong Kong Airport before flying back to Shanghai, but I can also buy it at the arrivals shop in Shanghai at the same price, why would I bother? And now you know that there will be arrivals stores in most of the Chinese cities… “So price corridors are important
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drivers of business for the brands. If they are logical and comprehensive. On the contrary, if it becomes chaotic or uncontrolled and it doesn’t follow logic any more I mean it’s highly likely that the overall travel retail volume will go down, between all the different destinations.”
the value proposition to a large degree. Many people buy for three possible reasons. One is for convenience; you are in the airport and there is nothing to do, so you shop. Secondly you shop because there is a local element to the offer which you will not find at home – something which we are focusing on more and more…and the third one is value and do I get a good deal on this? “And if at a particular time the
value is not there, because the price you are paying at that airport is almost the same as the one you pay
MAY 2017
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Priorities & goals for 2017 Aside from focusing on continuing to preserve the value proposition for its customers, DFS says it continues to adapt its merchandising approach in some locations to suit the diversification of its customer base. “We continue to adapt our offer
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in almost all the categories really… you have seen it with the launch of shoe spaces in the downtown stores; you have seen it with the diversification of the beauty brands in our beauty shops. “You have seen it with the focus
on a new approach to whisky and partially other liquor in the wines & spirits sections of the stores. Another big focus for DFS
is improving its technological processes in terms of its internal merchandising systems, business
wish is that we are not facing a huge humanitarian crisis of any sort this year. I mean this is a very volatile, political environment right now. I hope that we will not have a major humanitarian or political crisis over the next 12 months or beyond that and the world will work towards less crisis and more peace, rather than more crisis and less peace. “So if there’s one big wish I
have it’s really around that and that would overshadow any other wish I have.” «
[On exiting HKIA]: “One of our priorities was to take out a significant loss-making source, so we will have succeeded in that by the end of the year. So that means we will be in a very much better, or actually a very good financial situation starting next year.”
Philippe Schaus, DFS TRBUSINESS 55
May 2017 20
YEARS 1997-2017
TRBusiness Annual South Korea Report
Top Asia Pacific operators drive global growth
DFS CEO Philippe Schaus and Hee-ryong Won, Governor of Jeju shake on a new partnership between DFS and the Jeju Tourist Organisation (JTO).
Hong Seok Ho
intelligence gathering, and drilling into the data captured in its huge customer database. “We want to really get into
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our database of customers and understand what they are looking for and what the trends are.” Of course the company is also
concentrating on its e-commerce solutions and consumer-facing digital platforms. However, DFS Group’s targets,
priorities and goals all hinge on the global socio-political climate, which he openly admits he is concerned about. “Let me be very simple here. My
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