TOP 5 ASIA OPERATORS REPORT: OVERVIEW
Asia sales up 8.1% in H1 to $15bn T
Growing faster than any other region in the first half of 2017, Asia Pacific continues where it left off at the end of 2016 – high single-digit growth at a time when other regions continue to post flat or declining sales. Luke Barras-Hill reports.
ime and time again, Asia Pacific is touted as the ‘engine room’ of global DF&TR
growth and for good reason. Generation figures courtesy of
TFWA revealed Asia Pacific DF&TR sales rose by 9.1% in 2016 to $27.6bn, taking a 43.4% share of global sales. The buoyant numbers come at a time of significant investment in regional airport infrastructure and commercial space. The new Beijing Daxing and Gaungzhou Baiyun Airport T2 are examples of projects set to come online in the next year.
Under pressure However, in the case of the latter – the world’s largest duty free and travel retail market – volatility caused by Beijing’s group tour ban on Chinese travellers due to the THAAD missile crisis, together with rising concession fees, continues to pressure the region. As outlined in this issue’s *Top 5
Asia Operators Report, a number of the leading Asia retailers including powerhouses Lotte Duty Free and the Shilla Duty Free have felt the impact on the ground, notably at Incheon International Airport. Leading the rankings with total
sales of approximately $5.7bn, Lotte Duty Free weathered a challenging 12 months to notch growth at its main Seoul downtown store of $2.8bn (+2.4%), despite overall operating profits dropping substantially. The year-end result follows its
first retail loss in 14 years ($26.1m) during the second quarter of 2017, due predominantly to the THAAD deployment. At Incheon, this resulted in the
recent withdrawal of three of its four concessions at T1. Despite the challenges, Lotte
tells TRBusiness it is still shooting for growth of +12% to break $6bn in total sales this year. Second placed DFS Group
MAY 2018
bounced back well following the loss of its Hong Kong business to The Shilla Duty Free earlier last year. LVMH’s latest Selective Retailing results statement (Q1 2018) at the time TRBusiness went to press revealed ‘particularly’ strong performances at DFS’ Hong Kong and Macau T Galleria locations, as the LVMH division grew organic sales by 9%. In the case of The Shilla Duty Free,
domestic sales surged by 20% in 2017 to hit $3bn, bolstered by higher spending from Korean and Chinese customers, as it reports significant traction from online sales. In the future, Shilla expects online
to eventually account for 50% of total sales. In fact, South Korea’s ambition is to grow its overall sales by 20% this year, which could potentially (dependent on foreign visitor numbers) add up to $2.5bn to the total $10.6bn haul posted by the industry in 2016. Sitting in fourth is Sunrise Duty
Free, although last year’s acquisition of a 51% share of the company by China Duty Free Group creates a vast operating giant, with a presence across all three Beijing and Shanghai airports, plus an extensive network of over 230 border, airport and downtown stores, including the lucrative Haitang Bay Duty Free Shopping Complex on Hainan Island.
CDFG grows Based on figures from the Top 10
Operators Report, CDFG posted estimated sales of $1.45bn in 2016. Sunrise does not appear in the global rankings, but is understood to have generated sales of approximately $1.7bn in 2016. The merger of both entities could create a sizable powerhouse when the Top 10 International Operator rankings are compiled in October. Completing the rankings is Ever
Rich Duty Free, which recently opened its new duty free shop complex on Penghu Island and
The main downtown store accounts for more than 50% of Lotte Duty Free revenue.
operates departure and arrival shops at Taiwan’s main airports. «
South Korea’s ambition is to grow overall sales by 20% this year, which could potentially add up to $2.5bn to the total $10.6bn DF&TR haul posted by the region in 2016.
TRBusiness
Asia
Pacific ranking
1
2 3 4 5
Global ranking
2 4 6
N/A N/A
TOP 5 ASIA OPERATORS Retailer
Lotte Group DFS Group Shilla
Sunrise Ever Rich
DF&TR sales total
$ 5.7bn $ 3.2bn $ 2.6bn $ 1.7bn N/A
*Source: Generation Research; TRBusiness sources; and data taken from the Global Operators Report published in 2017 based on 2016 figures.
TRBUSINESS 39
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