Hainan ‘one cog’ in China engine, says Lanthier

By Andrew Pentol |

Lagardère Travel Retail opened a large-scale downtown duty free store on Hainan island in partnership with Hainan Tourism Investment Development Co on 30 December 2020.

Lagardère Travel Retail is backing the rest of the Asia Pacific region to follow China and return to traffic and sales growth once the sanitary situation is under control.

Speaking as part of the Leading Asia Pacific Operators Report in the TRBusiness June e-zine, Séverine Lanthier, who now holds the dual role of Chief Strategy and Development Officer and Regional COO Asia, acknowledges the fast rebound in China driven by the strong recovery of the Chinese domestic market.

She also highlights the rapid development and burgeoning sales growth on Hainan island in particular, while emphasising the significant restrictions in Hong Kong, Japan and Singapore.

She said: “The region has huge growth potential underpinned by booming middle classes and strengthening intra-regional traffic. We already have a leading position in China that we are reinforcing and are also pursuing selective opportunities to capitalise on this potential and grow our Asia footprint.”

As with most DF&TR stakeholders, the coronavirus (Covid-19) pandemic has triggered conversations about the need to re-think business models and change the dynamics within the ecosystem to share risks more equally. “In Asia, the operator has a very central role,” Lanthier emphasised. “We’re being widely recognised for the differentiating support we offer landlords and brands.

SUPPORTING LANDLORDS AND BRANDS

“This revolves around building brands’ images, recruiting new customers and creating the ultimate bricks-and-mortar retail experience to offset the competition of digital and capture shoppers’ attention across all three business lines in which we operate.”

Lagardère Travel Retail runs a 134sq m Burberry fashion store at Shenzhen Bao’an International Airport Terminal 3.

Last year, Lagardère Travel Retail’s revenue fell by 56.2% in Asia Pacific and by 31.9% in the first quarter of 2021. Asked by TRBusiness how she expects the rest of the year to pan out Lanthier remarked: “It is impossible to make forecasts while the situation remains so uncertain and key markets such as Singapore, Hong Kong and Japan are still closed.

“However, we have strong revenue expectations for China in 2021, where we are making significant investments and will pass the 500-store mark by the end of the year.”

Speaking of China, Lagardère Travel Retail is among the retailers making an impression on Hainan Island, where it opened a large-scale downtown duty free store in Sanya on 30 December 2020.

Séverine Lanthier, Chief Strategy and Development Officer and Regional COO Asia.

Spanning 30,000sq m, the complex was opened in partnership with Chinese state-owned enterprise Hainan Tourism Investment Development Co. Product categories include perfumes & cosmetics, fashion & accessories, watches & jewellery and wines & spirits.

While Lanthier views Hainan as a definite success story, she still believes its operations on the island are just one cog in the much bigger growth engine that is China, where the retailer runs more than 400 stores at 26 airports.

The retailer is also present at Beijing Daxing International Airport where it runs a Jimmy Choo store.

“The potential to recruit new customers [in Hainan] is huge,” she commented. “The island is attracting growing numbers of Chinese first-time travellers who are hungry for international brands at competitive prices and we anticipate that the cake will continue getting bigger.

Lanthier says that while all categories are performing very well in the Hainan store, there remains untapped potential in perfumes & cosmetics.

“We can bridge the gap by introducing some of the many niche brands that are yet to make their Hainan debut,” she asserted.

STRONG ONLINE SALE MOMENTUM

In terms of the company’s Mainland China operations, sales grew by 18.2% in 2020 off the back of a surge in domestic traffic and strong online sales momentum. This continued into the first quarter of 2021, resulting in the firm’s China revenues lifting by 37.1%.

“The efforts of the Chinese team to manage the crisis and mitigate against its impact have been remarkable,” observed Lanthier. “Our good performance is testament to this. China is proving to be such a resilient market.

Maximising the potential of its stores in Japan at locations such as Fukuoka International Airport will be a priority for Lagardère once things normalise.

“As soon as travellers feel reassured about their safety they fly and shop again. Even domestic business travel has returned. The size of the country, its demographics and consumer spending habits make it quite a unique example. China is definitely lifting our overall performance in the region.”

In terms of the Asia Pacific region as a whole, strong local partnerships underpin the firm’s corporate social responsibility and digital strategies, according to Lanthier.

“We are working very closely with our partners to advance agendas and make progress across these two topics,” she says. “In China, we have built a very large customer database and loyalty programmes which total nearly two million members. Offering these valued customers a 360-degree digital journey is key to servicing them.”

Click here to read the full interview with Séverine Lanthier in the TRBusiness June e-zine.

An interior shot of Lagardère’s first store at Tokyo station which was inaugurated in August 2020.

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