Lagardère Travel Retail tells TRBusiness that 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, tells TRBusiness that the company will open luxury, specialty and food & beverage units at Shanghai Pudong, Beijing Daxing, Zhengzhou and Qingdao this year alone.

 

The full interview with Eudes Fabre will appear in the May issue of TRBusiness magazine. Subscribe here or pick up a copy at the TFWA Asia Pacific Exhibition & Conference in Singapore.

 

As is the case for its international operator rivals, there are regulatory obstacles which 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 Andrew Pentol for the TFWA China’s Century Conference delegate magazine.

 

EMBRACING THE CHALLENGE

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 (as of December 2018) and 30 railway stations.

 

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 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 5bn 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.

 

OPPORTUNITIES WITH CDFG COULD BE GLOBAL

“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.

 

“We know they have big international ambitions and we see that our skills can definitely complement there’s. Our combined expertise can be leveraged in other markets in Asia of course as a start, but also globally.

 

“They offer a great understanding of the Chinese customer, excellent relationships with all the local suppliers (China and elsewhere in Asia). We brought the execution of exclusive concepts from western liquor brands and added to the collective buying/merchandising power.”

 

Like all new stores, the JV business at HKIA continues to be a work in progress, but so far, Fabre is pleased and feels there is potential to work together on other projects in other territories.

 

The full interview with Eudes Fabre will appear in the May issue of TRBusiness magazine. Subscribe here or pick up a copy at the TFWA Asia Pacific Exhibition & Conference in Singapore.