MEDFA Day 2 turns attention to India and China

By Charlotte Turner |

The second day of the MEDFA conference featured a special focus on the importance of Asia with the growth of Indian and Chinese travellers travelling through the Middle East region. Innovative ways to engage customers and new ways to reach customers were also discussed.

 

The first session of the day – moderated by John Sutcliffe, Consultant Director, Aer Rianta International Middle East – ‘Excellence in the air’ brought together a panel of industry executives from their respective fields – inflight retail, airline and supplier – to discuss how together, they can improve the inflight retail experience.

 

The panel comprised; Rami Madi, General Manager, Traveller Ltd General Manager, Traveller LTD; Keith Hunter, Senior Vice President, Qatar Duty Free and Qatar Airways Inflight Duty Free; Stuart McGuire, Chairman, Scorpio Worldwide; Jean-Charles Seite, Vice President Europe Middle East & Africa, Estée Lauder Travel Retail Inc and Selwyn Grimsley, CEO, Tourvest Duty Free.

 

The discussion focused on what each stakeholder is doing – and not doing – to make it as exciting, engaging and innovative as possible for the passengers.

 

The lively morning discussion presented conflicting views of the consistency of inflight retail. It was a clear that there was a bone of contention between McGuire and Sutcliffe relating to consistency of excellence across all airlines.

 

MEDFA

[Above: L to R: Jean-Charles Seite, Vice President Europe Middle East & Africa, Estée Lauder Travel Retail Inc; Selwyn Grimsley, CEO, Tourvest Duty Free and John Sutcliffe, Consultant Director, Aer Rianta International Middle East]

 

UNSATISFACTORY SERVICE

Sutcliffe was adamant that his experience of inflight had largely been unsatisfactory. McGuire responded to Sutcliffe’s comments by saying that you can’t generalise across airlines, as each one has different priorities and for some, inflight retail does not come out on top.

 

David Freeborn MEDFAThe second session ‘Brand news: innovation in duty free & travel retail’ saw three major brands from the beauty, liquor and tobacco sectors showcase examples of innovation in their respective category. They highlighted the impact their initiatives have had, both on the customer experience and on sales as well as discussing the benefits for the respective partners involved.

 

David Francis, General Manager Worldwide Duty Free JTI; David Freeborn, Managing Director, Pernod Ricard Gulf and Stefan Dembinski, L’Oréal Luxe Travel Retail, Europe & Middle East took part in the session.

 

Freeborn made the point early on that the Pernod Ricard probably won’t make too many acquisitions from this point forward and that it is now up to company to now leverage its existing portfolio fueled by innovation and new ideas, which need to deliver significant commercial benefit.

[Above: David Freeborn, Managing Director, Pernod Ricard Gulf]

 

Francis looked at the number of adult smokers as a percentage of the 5bn global departing passengers for 2012 (airports); 500m are adult smokers. He argued succinctly that these passengers cannot simply be ignored and in fact are among the highest value shoppers at the airport.

 

AN INNOVATIVE STATE OF MIND

On the topic of coming up with new and unique ideas, Dembinski took Dubai as an example of a region that has been constantly innovating for more than 50 years. Dembinski said that innovation is about a state of mind and vision. “This enables us to have radars all over the world and to become the leader in the beauty segment,” he said.

 

After a short coffee break and time to mull over the sentiments from earlier speakers, Sean Staunton, Vice President Operations, Dubai Duty Free and Glen Morgan, Managing Director Abu Dhabi, DFS Duty Free discussed challenges to the travel retail industry.

 

Staunton addressed the new Concourse A at Dubai Airport and the challenges that Dubai Duty Free will come up against, although Staunton believes that many of the congestion and capacity issues at the airport will be alleviated by the new space.

 

Morgan said that infrastructure issues were relatively easy to solve with sufficient foreword thinking. For Morgan, the issue was with the quality of staff in the airports. “The Middle East is not entirely honest about its people.  We spend a lot of time on mystery shops, over 140 last month, and what we know is that when everything is going well is, service is fantastic, but when things go badly it can be quite horrific.”

 

MEDFA

[Above: L to R; Deepak Talwar, Chairman, IDFS Trading and Kapil Kaul, CEO, CAPA India]

 

INDIA AND THE INDIAN TRAVELLER

The conference concluded with two, fact-packed sessions split into two parts; ‘India and the Indian traveller’, followed by China and the Chinese traveller’.

 

Kapil Kaul, CEO, CAPA India and Deepak Talwar, Chairman, IDFS Trading delivered their presentations regarding ‘India and the Indian traveller’.

 

This session focused on the opportunities ahead and looked at the behaviour of the Chinese and Indian passengers when travelling.

 

Kaul, CAPA India. Highlighted the growth potential for Indian aviation revealing that Indian national departures increased by 12.6% per annum in 2012 and that India has the 6th highest number of domestic airline seats and by far the lowest per capita ratio amongst major markets – the market is therefore far from saturated.

 

He said: “Growth ahead will dwarf recent experience. The international traffic forecast for 2021 is 96m  [up from the current 37m – Ed] per year.” The key to success lies in careful long-term investment and planning avoiding mounting losses from Indian carriers; between  FY06 to FY12 accumulated losses reached US$8bn.

 

Talwar made it clear in his presentation that Indians are “incredible shopaholics”.  He revealed that there are 1.75m Indians in Dubai alone, which contribute to growth in the Middle East. “The Middle East duty free will continue to grow and expand along with the Indian footprint. The top factor that influences destination selection for Indians is shopping…Total outbound spending will cross the US$28bn mark in 2020.”

 

Alexander Glos MEDFACHINA AND THE CHINESE TRAVELLER

In part two of the final session, Bernard Creed, Vice President Finance, Dubai Duty Free; Catharina Eklöf, Vice President Global Merchant Development, MasterCard; and Alexander Glos, CEO, I2I turned their attention to China and the Chinese traveller.

[Right: Alexander Glos, CEO, I2I]

 

Glos revealed some illuminating figures such as 1.1bn Chinese have a mobile phone; 700m of which can access the internet. He said growth is driven by conditions n China – not internationally and factors such as segmentation, diversity and seasonality all have to be considered when targeting the Chinese passenger.

 

Both Eklöf and Glos talked about targeting Chinese travellers before they left China, by using travel agencies and tour operators and agreed that China will be the biggest source of sales growth to businesses over the next ten years.

 

Creed talked about DDF’s experience with Chinese travellers, stating that business travellers from China are double that of  global business travellers. He said that fairly recent new regulations meant that Chinese groups now allowed to travel to the Middle East, which has had a significant impact on sales.

 

“Engagement and communication is a big focus for DDF with the Chinese passengers,” said Creed. During the seven major Chinese festivals, he added that Chinese staff at Dubai Duty Free have been dressed in traditional Chinese attire and Mandarin translations have been made available on many product counters.

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