Asahi Airport Service Co Ltd (AAS) has reported record duty free shop and luxury boutique revenue in Kansai International Airport’s T1 South Wing in the first half of 2015 as Taiwanese and Mainland Chinese customers now number 80%, with remaining sales made mainly to Japanese customers.

 

“Business is very good. Every shop’s business is good in Kansai Airport,” commented Yutaka Kawakami, General Manager of Asahi Airport Service Co Ltd (AAS), speaking exclusively with TRBusiness in Kansai.

 

He said both Chinese and Taiwanese passengers have increased, with Chinese buying mainly watches, tobacco, perfume and cosmetics and ‘especially Shiseido’, while Taiwanese are buying high-priced Japanese sake as well as other products.

 

AAS works closely with Taiwanese tour companies who recommend its shops to passengers.

 

 

Increased flights from China have boosted AAS’s duty free revenue this year as more departing travellers use flight gates in the airport’s South Wing where its shop and boutiques are located. The South Wing handles mainly Chinese and Taiwanese passengers, while the North handles mainly South Koreans.

 

“For us, most of our customers are Taiwanese. We contact Taiwanese tour companies and they recommend many passengers to shop here.”

 

Taiwanese and Mainland Chinese each account for 40% of sales in AAS’s general store, with Japanese accounting for the balance. Seven Star and Mevius cigarettes –plus the new Mevius Summer Limited Edition – are very popular, accounting for almost half of all tobacco total sales, with Japanese taking advantage of the 35% to 40% duty free saving on the domestic price.

 

Kawakami said: “In calendar year 2014 our sales increased by 25%. This year we were at the same level of sales at the end of July. Tobacco accounts for 45% of sales in AAS’s mixed duty free store, followed by perfume and cosmetics with 36% of sales.

 

 

“Our cosmetics sales have grown three-fold from January to July compared with the same period last year, especially Christian Dior which has grown five-fold compared with last year. Everyone likes Dior,” Kawakami remarked. “We started selling Kiehl’s from January this year; it’s made a good start. Chinese customers like Kiehl’s.”

 

AAS also brought in Kiehl’s and changed its front of shop cosmetics display after Chanel left the store at the start of 2015. This followed approval from New Kansai International Airport Corporation (NKIAC) for Chanel to open two self-operated beauty boutiques, Chanel Fragrance & Beauty North and Chanel Fragrance & Beauty South, on the T1 departure shopping concourse.

 

Another successful recent addition to AAS’s beauty collection is a new range of ReFa cosmetic rollers introduced in February where sales levels are running at JP¥3m ($25,000) a month. Kawakami says fragrance sales also are growing – +40% between January and July – but not as fast as cosmetics. Liquor sales have also grown by 250% over the same period, with the category now accounting for 8% of general shop sales.

 

 

“We have brought in new whisky brands and a high priced Japanese sake for Chinese and Taiwanese customers from June. It costs JP¥20,000 ($165) for a 1.8 litre bottle; it’s high class,” said Kawakami. Souvenirs and accessory items, including watches and jewellery, represent another 8% of sales.

 

“Watch sales have grown three-fold compared to 2014. Our Longines’ sales were JP¥15m ($123,157) in July which is very good. Longines flagship conservative models priced at JP¥250,000 to JP¥600,000 ($2,052 to $4,926) are popular,” he said, adding that lower priced fashion watches also are selling well.

 

Meanwhile, sales are also growing strongly in the four luxury brand boutiques that AAS operates in T1. The most recent opening was the 38sq m Ermenegildo Zegna outlet in September 2014 located in the central T1 airside shopping concourse. Kawakami says AAS’s three other boutiques housing Dunhill, Montblanc and Bally have also performed well this year, with each brand returning double-digit sales increases.

 

 

“Our boutique business is good; every duty free business is good this year,” said Kawakami, adding that between January to July boutique sales were up ‘about 20%’, with Bally +30%, Montblanc +100% and Dunhill +50%.

 

Meanwhile, in addition to renovating its duty free general shop to accommodate the recent change in the cosmetics brands display, AAS is also refurbishing its luxury boutiques, having completed the Montblanc boutique last June. Kawakami says that the Dunhill boutique will be renovated in December or January.