Dufry: No retail pivot due to fewer Chinese travellers

By Luke Barras-hill |

Dufry Group’s Chief Operating Officer for Asia Pacific Pedro Castro has told TRBusiness that the global travel retail giant is not making drastic adaptations to its retail merchandising strategy in the region to account for a lack of Chinese customers travelling overseas.

In an interview carried in the May e-zine as part of the Leading Asia Pacific Operators report, this publication also learns that Dufry’s divisions in Asia Pacific and globally have not witnessed fundamental or structural changes in the shopping behaviours of Chinese shoppers. Rather, shifts in travel patterns that are linked to travel restrictions in place at any one time.

TRBusiness recently reported that APTRA and ACI are working together to try to encourage government organisations to regulate travel health checks and documentation requirements for a more harmonised approach across the region. How does Dufry see the situation currently and do you think the company can help to affect change in this regard?

As a member of the most important industry and travel retail associations – including the two you mentioned – we support their lobbying activities as much as possible, as a joint coordinated response within the industry is important.

Pedro Castro, Chief Operating Officer Asia Pacific, Dufry Group.

How has Dufry adapted to a distinct lack of Chinese passengers over the last two years?

China and Chinese customers are an important customer group because of their affinity to brands and their propensity to shop and to share these experiences. Across our business – including the APAC region – we have not seen fundamental or structural changes in the shopping behaviour of the customers. 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. As such, our business in China (duty paid operations, as well as the business related to Global Duty Free Plaza in Hainan with Hainan Development Holdings) 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.

How has Dufry adapted its portfolio to better serve other nationalities in the absence of Chinese customers?

As already touched on in the response above, the universal drivers for customers within the travel retail sector continue to be exclusivity, novelties, limited editions and unique promotions. These elements are a key part of our retail offer and are relevant for all nationalities. There is therefore no need to ‘adapt our portfolio’ to suit other nationalities, if there are fewer Chinese customers. The only exception to this would be those sought-after brands and local products that are favoured by specific passenger demographics and we have adjusted our ranges to ensure such products are available in  our stores.

I’m sure, like many others in the industry, Dufry welcomed the news that Singapore has opened up and removed testing requirements for those fully vaccinated. What other developments are you encouraged by in the region?

The easing of restrictions in Singapore is indeed welcome news and it has been encouraging to see similar approaches in other countries in the region such as Malaysia, Korea, the Philippines and Thailand. Likewise, restrictions have also been eased for Australia and New Zealand, both of whom are opened their borders to fully vaccinated travellers from mid-April and from the beginning of May, respectively.

The reduction in travel restrictions is clearly a step-by-step process. What we do know from our own research is that people are keen to travel as soon as they are able to do so. The fact that at least some countries in the region are starting to reopen is good news, regardless of whether they are open fully or partially.

To read the full interview in the TRBusiness May e-zine, click here. To read more from Dufry at TFWA Asia Pacific Live, click here.

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