Guilhem Souche, Senior Vice President GTR, Coty, with TRBusiness’ Faye Bartle at the 2024 TFWA Asia Pacific Exhibition & Conference in Singapore.

Elevating the ways in which its brands are expressed in travel retail complete with agile, channel specific activations and services is key to Coty further strengthening its presence in the channel and capitalising on emerging opportunities in Asia Pacific (APAC).

TRBusiness met with Guilhem Souche, Senior Vice President Global Travel Retail (GTR), Coty, at the 2024 TFWA Asia Pacific Exhibition & Conference in Singapore in May for the latest on the beauty giant’s strategy for the channel.

Souche summed up the position as it stands: “Overall, in the past year, Coty has significantly improved its position in travel retail. This is mainly driven by fragrances,” he said.

“On top of that, we have also accelerated a lot of our other categories, such as makeup with prestige brands like Burberry and Kylie Cosmetics, which is bringing new customers into the duty free shops.

“We are extending to skincare, with a strong focus on Lancaster. We have elevated the brand journey with product premiumisation, not only in terms of the portfolio and icons, but also with a new expression at the point of sale.

“These agile activations are what we are showing here [at TFWA Singapore] and is what our partners are telling us they want to see.

“The whole channel is accelerating in retailisation. This is something we want to drive and ensure that brands like Burberry, Boss, Chloé and Lancaster are expressed with the latest concepts in travel retail in the region [APAC].

“Our main driver is that we want to be the preferred partner for retailers, airports and travellers. Everything we do is tailored for the channel.”

Creating a sense of travel, place and time is vital to delivering the optimised activations that Souche speaks of.

The Coty Travel Retail Asia Pacific Fly With Me multi-brand fragrance discovery pop-up experience in partnership with Delhi Duty Free at Indira Gandhi International Airport for Diwali in 2023 was highlighted as a case in point.

The creativity extends throughout the portfolio to skincare and suncare, with specific services, with an increasing amount of personalisation and gifting for fragrances.

Travel retail up 20% LFL in Q3 2024

The strategy is bearing fruit with Coty reporting net revenues of US$5,554.1 million in its latest annual report, for FY2023 (to 30 June 2023) – up 5% year-over-year (including a negative FX impact of 5%).

Left: Coty Fly with Me multi-fragrance pup-up for Diwali at the International Departures Hall in T3 of Indira Gandhi International Airport. Right: Gucci The Alchemist’s Garden Where My Heart Beats Eau de Parfum.

GTR trends were “very robust across all regions”, especially so in the Americas and EMEA, with growth of over 30% like-for-like (LFL) in Q4(23) and FY23, supported by the continued recovery of international travel, as well as Coty’s expansion in the channel.

The company has since been experiencing double-digit growth full-year-to-date (FYTD), with strong results for the third quarter of fiscal year 2024 (ended March 31, 2024) released on 6 May.

“Travel retail today is experiencing significant growth at Coty,” said Souche. “In Q3(24), travel retail grew around 20% LFL. So it’s really become one of the key growth engines for the company.”

The Q3(24) results show that net revenues grew 8% on a reported basis and 10% on a LFL basis, with reported and LFL results supported by growth in fragrances, colour cosmetics, skin care and body care.

GTR trends were described once again as “robust in all three regions” (Americas, EMEA and Asia Pacific), fuelling the net revenue growth of roughly 20%, as Souche references above.

“Today I would say we are stronger in Europe, but we also have a very strong position in America, and in Asia we hold significant weight,” he said.

“We see that Asia is growing very fast because Asian consumers are increasingly attracted to fragrances. For us, this represents  great potential for growth and explains why we are expanding quickly in this region.”

China an emerging ‘super’ market for scents

Souche underlines how the diversity of Asia presents both challenges and opportunities for the company.

“We are moving into a travel retail environment in which opportunities across the region are becoming more balanced,” he said.

“In this region you have sub-regions with all very interesting dynamics. We have been talking about the emergence of India for many years, and we see it now, which is very important.”

While stressing that the country is not easy to summarise, he noted that: “The dynamic we’re observing is that consumers have diversified and have personalised needs for  beauty products, ranging from the entry level through to the most sophisticated, similar to what we see in the Middle East.

“Our portfolio spans from brands like Adidas, Davidoff and Calvin Klein to Chloé, Burberry and Boss – this is enabling us to cater to all these customers in India. The market is particularly interesting because it’s growing very fast.”

Coty’s goal is to drive and ensure that brands such as Burberry, Boss, Chloé and Lancaster (pictured) are expressed with the latest concepts in travel retail in APAC.

Souche also highlighted the “ideal mix” of consumers and the developing fragrances sector (including a growing demand for niche fragrances) in Southeast Asia, as well as the Pacific where synergies can be found with the company’s business in the UK and the US.

Exploring further potential for its fragrances, in China in particular, is a key consideration.

“We think that in a very short time, China will become the ‘super’ market outside of France for fragrances,” said Souche.

“Penetration of  fine fragrance is in the 20-25% range among Tier 1 city Gen Z consumers, and China, is already the third-biggest market for niche fragrances after the US and France. So there is still a lot of room to grow.”

Hainan – a discovery hotspot

Coty’s CEO Sue Nabi has defined China as one of the company’s six strategic pillars for growth. Hainan, of course, is an important part of this ecosystem.

“What we see is that there are many people in China who are discovering the brands in Hainan,” said Souche. “Hainan is giving us the opportunity to show these consumers the best of our brands.”

Coty’s retail concepts on the island prioritise bringing to the fore the latest in digitalisation, store design and customer services.

The opening of boutique stores earlier this year for Burberry Beauty and Chloé fragrances in Block C of the CDFG Sanya International Duty Free Shopping Complex are a taste of the acceleration that Coty is experiencing on the island.

Delivering dynamic experiences to travelling consumers

In the airport environment, ensuring activations make an impact is vital to capturing a slice of dwell time.

The first ever BOSS cross-category pop-up store, which launched in partnership with Changi Airport Group and Shilla Duty Free at Changi from 14 May to 23 June, showcased the types of dynamic experiences Coty champions.

With selected products and merchandise making their worldwide debut, limited edition cross-category bundle sets, touch-screen fragrance trial experience and much more – it offered plenty to keep travellers engaged.

Lancaster is a big focus for Coty Travel Retail in Asia.

Makeup, now a significant part of  Burberry, is also earmarked for growth this year.

“We are still completing the offering and bringing new products to customers,” noted Souche. “Plus, we have Kylie Cosmetics which is a big success.”

The brand arrived in Asia through travel retail with the first store at Mumbai International Airport, and it has since expanded in the region including to Australia and Singapore, with the brand’s first store in the island state at Changi.

“In skincare, the big focus for us in Asia is Lancaster, with photoageing and suncare becoming more important,” he added.

Coty recently launched a POS for the brand at Changi, building on its presence in the region including in Malaysia, Thailand and Hainan. The aim is to bring the brand to 14 countries globally by the end of the year.

On the topic of sustainability, the Gucci, The Alchemist’s Garden, Where My Heart Beats Eau de Parfum, which is manufactured using alcohol made from 100% recycled carbon emissions, has also been a key launch for the company.

“This is something we pioneered with our partners LanzaTech, producing the first globally distributed fragrances using this innovative upcycled alcohol in 2022,” said Souche. “But this is the first fragrance we manufactured using 100% carbon captured alcohol.”

Recent renewals and announcements of licenses and agreements – such as with Marni to develop, produce and distribute a line of fragrances and beauty products beyond 2040 – are testament to Coty’s vision.

“It shows how Coty is a good partner for fashion houses,” explained Souche. “We are very happy that we renewed fragrance licenses with key brands we are working with today as it shows there is a long-term trust. The brands we are working with are big and we are a go-to partner for brands that want to enter the beauty world.”

READ MORE: Coty brings Kyle Cosmetics to Changi Airport with Shilla Duty Free

READ MORE: Coty unveils Gucci The Alchemist’s Garden The Heart of Leo Eau de Parfum

READ MORE: Coty TR and Shilla to launch Korea’s first Super Brand Week in new plan