2022 ‘the year travel retail showed its true resilience’, says APTRA’s Sunil Tuli

By Faye Bartle |

Sunil Tuli, President, APTRA

Sunil Tuli, President of Asia Pacific Travel Retail Association (APTRA) & CEO of King Power Group (Hong Kong).

Sunil Tuli, President of Asia Pacific Travel Retail Association (APTRA) & CEO of King Power Group (Hong Kong) is reflecting on 2022 in a commentary released today, in which he highlights a year of industry resilience in the region ‘despite the array of economic headwinds’.

The industry expert has delivered a rallying call to stakeholders ahead of the new year, championing a ‘stronger together’ approach and citing ‘long-term powerful momentum building, driven by the rise of the middle class in several key markets’ as a key dynamic emerging over the past 12 months.

Drilling down on the economic headwinds faced, Tuli pointed out how “supply chain disruption, soaring interest rates, labour shortages and the war in Ukraine have driven persistent inflation to new highs and fuelled market volatility”.

As such, he said: “The outlook for 2023 is capricious, especially for a retail industry that relies on tourism, with our consumer base facing intense challenges impacting their confidence and their travel spending.”

Quoting statistics from the recent Organisation for Economic Co-operation and Development (OECD) Economic Outlook report titled Confronting the Crisis, (released November 2022), Tuli reiterated that the OECD predicts global annual GDP growth of 2.2% in 2023.

Five of the top 10 countries in 2023 are in Asia Pacific, outperforming that global figure, with India leading the region’s predictions at 5.7% and Indonesia at 4.7%, ahead of China at 4.6%, according to the report.

“Although extended travel restrictions in APAC have held back regional recovery, there are now encouraging signs of growth in ATV vs 2019 and APTRA remains optimistic that the region will get back on track to lead industry growth and that key Asian nationalities will shape how the industry looks in the future,” said Tuli.

“When exactly that acceleration starts depends, of course, on the scale of covid cases as restrictions in China ease and on the Chinese government’s international travel policy.

“But with Hong Kong’s borders fully open since 14 December and Trip.com reporting an instant flight search surge of over 2000%, there is a clear message of the scale of the pent-up demand coming our way.”

Shaping up for 2023

The big query posed is as follows: “Given the ongoing challenges of supply and staffing, the question is, are we ready?”

“Longer-term, positive and powerful tailwinds are creating a momentum that Travel Retail in APAC needs to shape up for,” stressed Tuli.

“The rise of the middle class in Asia is generating most of the global consumer growth, with the World Data Lab, in October 2021, projecting middle class growth of 6% pa in China and India, dwarfing the 0.5% anticipated growth this decade in the West.

“If the pandemic does turns out to be a relatively short pause in the world’s economic shift in the greater scheme of things, more than one billion Asians – 75% of whom are in India and China – will join the middle class by 2030, even despite the current downward revision of economic growth forecasts.”

In his commentary, he stressed how travel retail must be ready to meet and exceed the evolving expectations of these eager consumers, from ‘welcoming product innovation from suppliers and helping them maximise the brand-building potential of travel retail’ to ‘combining compelling digital engagement and unforgettable in-store retail experience’ and catering to ‘the rise of socially conscious consumers everywhere who are looking to vote with their dollars’.

“So as we welcome 2023 with industry resilience, let’s encourage an intrepid collective mindset in our people, our businesses and our industry as a whole – accepting we will always face ever-changing circumstances and unpredictable turbulence, building our agility to adapt and stabilise business in the face of economic stress and inevitable challenges,” said Tuli.

“An inclusive human-centric approach in how we all contribute to the evolving culture of travel retail will bring many rewards, improving the appeal of our industry to the rich diversity of the workforce across Asia Pacific to help resolve current issues around recruitment and people retention.”

APTRA is holding elections in May 2023, at the end of the current board’s tenure. Applications for board positions are open to new, current and previous members and the process will begin in April.

The APTRA Exchange will return in person in May as part of the TFWA Asia Pacific Conference.

The association will also be hosting specialist webinars, details of which can be expected to be shared in January.

Finally, ‘appropriate research’ designed to help its members understand the intricacies of current consumer trends, will be reinstated once ‘the market fully re-opens’.

Middle East

MEADFA Conference 2024 ‘heading to Abu Dhabi on 17-19 November’

This year’s Middle East & Africa Duty Free Association (MEADFA) Conference will take...

International

DFWC Q1 2024 KPI Monitor indicates rise in duty free impulse purchases

Impulse purchasing within global duty free is on the rise, according to the latest Duty Free...

Asia & Pacific

Avolta details “bold and ambitious” goals to grow its APAC business

With a number of key developments coming to fruition, including its operations at Wuhan Tianhe...

image description

In the Magazine

TRBusiness Magazine is free to access. Read the latest issue now.

E-mail this link to a friend