LEADING ASIA PACIFIC OPERATORS: LAGARDÈRE ASIA PACIFIC
Lagardère TR extends lead in China with new airport partners
Eudes Fabre, CEO, North Asia, Lagardère Travel Retail tells Charlotte Turner that the company will grow its presence in Chinese airports to total 20 by the end of this year, further strengthening its reputation as a leading international duty free & travel retailer in the region.
L
agardère Travel Retail tells TRBusiness it will continue to expand its already enviable
Chinese airport store network with its existing partners this year, but also enter into new territories, remaining focused on duty paid shops. Eudes Fabre, CEO, North Asia, Lagardère Travel Retail tells TRBusiness that the company will open luxury, speciality and food & beverage units at Shanghai Pudong, Beijing Daxing, Zhengzhou and Qingdao this year alone. As is the case for its international
operator rivals, there are regulatory obstacles that prevent Lagardère from managing duty free shops in Mainland China. However, special administrative regions, such as Hong Kong and Macau, are fair game. Present in China since 2003,
Lagardère Travel Retail’s business in the country has evolved in a ‘great and very pragmatic way’, according to Dag Rasmussen, Chairman and CEO who spoke to TRBusiness Senior Editor Andrew Pentol last year. Lagardère, which claims to be the
largest international travel retailer in China, entered the market as a magazine distributor 15 years ago. It now has 250 shops and restaurants and is present in 15 airports and 30 railway stations. Its first contract win came in 2007
at Shanghai Hongqiao International Airport, where it opened eight Relay
stores and one Virgin outlet. In 2012, the retailer made
its first entry into the Chinese fashion business at Xi’an Xianyang International Airport. There, it introduced brands such as Ferragamo, Hugo Boss, Kent & Curwen and Coach. “We now have 70 fashion and
beauty stores, which are our own operations,” said Rasmussen. Four years later, it secured
its first foodservice contracts at Shanghai Hongqiao. But arguably the most significant breakthrough was in 2017/2018 at Hong Kong International Airport (which it classifies as part of the China business) where it secured the liquor and tobacco contract in partnership with China Duty Free Group (CDFG).
Duty paid opportunities In mainland China of course Lagardère is limited to duty paid opportunities, but this does not make the market any less appealing. “The main opportunity is actually
Lagardère Travel Retail fashion stores at Shenzhen Bao'an International Airport.
MAY 2019
linked with the fact we are not allowed to do duty free and that if we want to do something it has to be different,” Rasmussen explained. With around five billion domestic
trips in China in 2017 and domestic tourism revenue amounting to RMB4.57tn ($661bn) [Source: Travel China Guide], the domestic travel retail opportunity is massive. It is also becoming easier for foreign companies to operate in China, providing they can accept the challenges. “The Chinese market is actually
more open and more transparent than people make it out to be,” insists Fabre. “So, actually, to run our business
in China, we don’t need partners even though, you know, we have chosen to work with some on select projects such as China Duty Free Group in Hong Kong.
“So, actually, to run our business in China, we don’t need partners even though, you know, we have chosen to work with some on select projects such as China Duty Free Group in Hong Kong.”
Eudes Fabre, CEO, North Asia, Lagardère Travel Retail
TRBUSINESS 59
Above: Lagardère is operating 87 stores at Wuhan Tianhe International Airport Terminal 3, having celebrated the grand opening of the new retail and foodservice master concession in October 2018.
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