INFLIGHT: AIRASIA
marketplace Ourshop went on to strike a series of important agreements with the likes of Eraman Duty Free, Guardian, Regent Asia, Plaza Bali Duty & Tax Free, Lagardère Travel Retail in Australia and Lotte Duty Free in Indonesia. Ourshop also established partnerships with most retailers across Malaysia. As revealed by TRBusiness, Ourshop
took over AirAsia’s inflight buying team late last year in a move that assimilated the airline’s onboard buying and operations team based in Kuala Lumpur as part of a new reporting structure. At the time, the integration
signalled AirAsia’s desire to maximise synergies between Ourshop and parent
AirAsia.com and AirAsia Shop now benefits from the best of both worlds: the marketing and inventory capabilities of
AirAsia.com – powered by the airline’s 100 million-plus passenger base – twinned with the logistics muscle of Teleport. Teleport’s foray into last-mile
delivery, which in turn benefits from AirAsia’s 150-plus destinations across its route network and enviable cargo slots, is helping to scale up AirAsia Shop and offer goods to consumers at lower delivery costs. This is important during a
tumultuous time that requires agility from retailers. For Lam, the majority of her division’s shopping revenue is currently accrued from ecommerce. While that might change slightly
when flights resume, Lam believes there exists a real chance to exploit customers’ propensity to shop from what in many cases might be three to four travel trips per year, to a 365-day opportunity. “Conversion of passengers on
the aeroplane is a pain point a lot of travel retailers are facing, but if we’re opening up to a much bigger audience together with the right targeting and personalisation with Air Asia’s data, we remove the barrier for them to shop,” Lam explains. “With the vision of Air Asia Shop,
we are not just limited to duty free. We are actually looking at cross-border overseas products, so things with unique, local backgrounds such as designers from Thailand and face masks from Korea that may not be accessible without a big
OCTOBER 2020
logistics cost.” As such, AirAsia Shops plans to
select merchants that offer lucrative opportunities to supply new products to destinations such as peninsular Malaysia and Thailand. Lam mentions Malaysian pewter manufacturer Royal Selangor, as just one example, with plans to bring more merchants onboard from October.
Focus on domestic flights While AirAsia Shop enjoys access to a (ordinarily) sizeable passenger base, including millions of AirAsia Big loyalty members keen to ‘earn and burn’ points, traditional fulfilment options for international flights remain under pressure. To assuage some of this pressure,
AirAsia has tried to deliver as large a shopping assortment as possible on its domestic flights, explains Lam. Of course, more tightly regulated
export sales such as liquor continue to be handicapped by the dearth in international flights, but where sales are permitted in local markets AirAsia is capitalising on the sales opportunity. “We will maximise wherever we
can to offer those products to them, so they can pre-book to get them delivered onboard and can pick them up at the airport. Those options are still available,” says Lam. “How quickly we can scale them back to where we were before will be highly dependent on flight schedules. “The other side of the story is how we quickly scale up the home delivery
“The other side of the story is how we quickly scale up the home delivery portion as now the fulfilment will not be limited to people travelling but to a much broader addressable market.”
Rose Lam,
AirAsia.com
portion as now the fulfilment will not be limited to people travelling, but to a much broader addressable market. The longer-term picture is how we make that fulfilment option a bigger chunk of the business than just duty free which is limited to international flights.” Certainly, the appetite to shop for
AirAsia customers does not appear to be waning. An internal survey carried out in August among a crop of the carrier’s members revealed that 86% indicated intent to purchase travel retail items in the near future. “Everyone has a craving for
travelling and shopping when conditions allow,” concludes Lam. “Hopefully that will bring a bit of positive sentiment and confidence to the industry.” AirAsia Shop plans to rollout to
Thailand by the end of the year and is studying Indonesia or the Philippines in the near future. «
Above: AirAsia is experiencing increasing domestic travel demand to destinations such as Langkawi. Source: AirAsia
AirAsia Shop launched in August at KL Sentral, Kuala Lumpur. L-R: Rose Lam, Group Head of Ancillary Commercial,
AirAsia.com; Karen Chan, CEO,
AirAsia.com; Tony Fernandes, CEO AirAsia Group; and Pete Chareonwongsak, CEO, Teleport.
TRBUSINESS 47
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