Dufry’s The Atrium store at the famous Venetian resort in Macau.

Dufry Group is prioritising Asia in future expansion plans as it looks to add 15,000sq m of new global commercial space to the 30,000sq m opened in 2017.

Speaking exclusively to TRBusiness for the May Asia Pacific edition, CEO Julián Díaz emphasised the projected double-digit increase in Middle East and Asian consumers in the next five to 10 years.

“Regionally it is very important we expand the business in Asia,” he said. “It is still a question mark for us as we have only generated 10% of total business so far in this region when we are generating 42% of total business in the Americas and 26% in Central Europe and the UK,”

The company’s Asian strategy is clear, according to Díaz, but attacking first-tier airports is not preferable as a model.

Dufry CEO Julián Díaz made a keynote address at last month’s Duty Free and Travel Retail Summit of the Americas.

SECOND-TIER CITY STRATEGY

He explained: “I like models where we create sustainable business. Second-tier airports where we can provide value and [explore] alternative channels are probably the best next steps for Dufry to develop the business in this territory.”

In the Americas, the recent decision taken by Brazilian customs authorities to permit land border duty free stores in Brazil has Díaz interested: “There is great value to deliver. Dufry is involved and one of the priorities in the country is to participate in the new market.

“Again, we need to understand the customer’s behaviour and motivation in going to places where you can go without any restriction.”

Staying with Brazil, he highlights the ‘large growth potential’ driven by a trend towards airport privatisation and the potential of raising the arrival’s allowance from $500 to $900.

He commented: “Brazil is still the most interesting emerging market in the world. I think the growth of the economy will facilitate any retail activity, especially travel retail, as we benefit from both sides – retail and travel.

“Obviously, events like the possible opening of duty free shops on Brazil’s border following the approval and gradual increase in inbound allowances are good triggers for increasing and accelerating value.”

On the current Brazilian arrivals allowance, Díaz said: “Currently, we cannot sell anything above $500 and the combination of any product cannot be above $500. This is limiting the possibility to display 60% to 70% of products in-store, which is obviously a tremendous challenge.”

To read the full interview watch out for the TRBusiness May edition, available soon.

Click here to subscribe.