Dufry ‘performing well’ in China as Pedro Castro provides GDF update

By Charlotte Turner |

During the recent TFWA Asia Pacific Live event, held at the iconic Marina Bay Sands convention centre in Singapore last week, Pedro Castro, Chief Operations Officer Asia Pacific, Dufry Group, outlined the global duty free giant’s strategy in Asia Pacific, whilst sharing the company’s developments and results for the region.

 

He highlighted the importance of its partners, Alibaba Group and Hainan Development Holdings Co., Ltd. Holdings (HDF) in pursuing growth opportunities in China and made it clear that Dufry is read to support a ‘rapid return’ once passengers, namely the Chinese, return.

 

Read TRBusiness’ interview with Pedro Castro in the May Asia Pacific special edition, here.

 

Castro reiterated key messages from the company’s comprehensive FY 2021 results call, stressing that the Omicron variant had an undeniable impact to sales, however, he also said that the company had witnessed ‘high elasticity’ of demand once travel resumed.

 

RETURN TO ‘NORMALCY’ BY 2023

Dufry expects a return to ‘normalcy’ between 2023-24, according to Castro.

Castro also highlighted some encouraging customer insights obtained through Dufry’s Customer Perception Tracking, which entails face-to-face store exit interviews in top locations, representing around 40% of FY2021 turnover.

 

Providing an update on the progress of Dufry’s shopping complex at Haikou’s Mova Mall, operated with Hainan Development Holdings Co., Ltd. Holdings (HDF), he said that the Global Duty Free Plaza is now operating 39,000sq m of retail, including 200 brands.

 

Dufry first signed a strategic cooperation agreement with HDH to develop opportunities in Hainan back in January 2021.

Commenting on China in an interview for the May e-zine, Castro, insisted that the company did not have to drastically adapt its retail strategy in the region to account for the lack of Chinese customers travelling overseas.

 

UNIVERSAL DRIVERS 

As TRBusiness also learned from Castro, universal drivers for customers within the travel retail sector continue to be exclusivity, novelties, limited editions and unique promotions, regardless of nationality.

 

“Across our business – including the APAC region – we have not seen fundamental or structural changes in the shopping behaviour of the customers,” Castro told TRBusiness.

Pedro Castro, Chief Operations Officer Asia Pacific, Dufry Group, outlined the global duty free giant’s strategy in Asia Pacific, whilst sharing the company's developments and results for the region.

At the recent TFWA Asia Pacific Live event, Pedro Castro, Chief Operations Officer Asia Pacific, Dufry Group, outlined the global duty free giant’s strategy in Asia Pacific, whilst sharing the company’s developments and results for the region.

“Instead, we have seen changes in travel patterns linked to travel restrictions that are in place at any one time.”

 

In China, therefore, related restrictions on international travel resulted in much of the spending being transferred domestically, confirmed Castro.

 

“As such, the business in China (duty paid operations, along with the GDF Plaza) has been performing well. This trend continues to be influenced by two opposing elements: ongoing travel restrictions often influenced by a ‘zero cases strategy’, alongside the attraction and considerable interest generated by exclusive products, novelties, limited editions and promotions which all remain valid, as these are the elements which make the travel industry unique.”

 

Read the full interview with Dufry’s Pedro Castro in the May Asia Pacific special edition, here.

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