BW Confidential - Issue #6 - May/June 2011 - (Page 46)

Travel retail Asia & Middle East analysis Growth drivers Asia and the Middle East continue to power ahead in duty free. But which countries and categories are driving growth in the region? by Kevin Rozario case of North Africa or Dubai in the Gulf. In Asia and the Middle East—unlike in the Americas and Europe—the travel-retail market avoided negative growth in 2009, putting both regions in a good position to bounce back strongly last year and this year.“Beauty is performing well in the Middle East,” says Chalhoub Group co-ceo Anthony Chalhoub, whose company is one of the leading beauty distributors in the Middle East, as well as the operator of Kuwait Duty Free. “Perfume sales are still buoyant, while make-up and skincare are improving.” The region’s biggest duty-free operator, Dubai Duty Free (DDF) concurs and its results indicate that skincare is going to be the beauty segment that others will have to keep up with. While perfumes remained the bestselling category for DDF last year, its growth of 16% was outperformed by make-up, up 23.1% by value compared to the same period in 2009, and skincare, which grew by 29.4%. DDF manager purchasing vendor support & research Saba Tahir tells BW Confidential: “Beauty showed growth of 17.9% in 2010 versus 2009 and now contributes 20.2% of all sales at Dubai Duty Free. This year, skincare is growing faster Delhi Duty Free Services & Singapore Changi than make-up and gaining further prominence top-10 beauty brands January 2011 within the cosmetics category.” Rank 1 2 3 4 5 6 7 8 9 10 Delhi Chanel Dior Lancôme YSL Calvin Klein Hugo Boss Davidoff Armani L’Oréal Paris Gucci Singapore Estée Lauder SK-II Chanel Christian Dior Lancôme Clinique Crème De La Mer Clarins Shiseido MAC S ome economists talk about the overheating economies in China and India. However, for the moment companies continue to enjoy growth without too much anxiety over the future, while other countries in Asia and the Middle East are riding the coattails of these two giant markets. For travel retail, this means just one thing: rising numbers of affluent consumers who are looking to travel and spend money—and in these regions, beauty is a priority purchase. However, there have been questions over the impact the current political unrest in North Africa and the Middle East will have on passenger numbers and sales. While there have been passenger declines at airports in Tunisia, Egypt and Bahrain, several European tour operators claim that bookings are recovering swiftly to Red Sea destinations, and Tunisia has launched a new tourism campaign to drive up numbers. In addition, it’s thought that many Gulf airports in the Middle East are unlikely to be much affected as they principally act as transfer hubs; where destinations are affected, consumers are likely to choose alternative nearby destinations, such as Morocco in the exceptional growth, which was not initially anticipated,” says Delhi Duty Free Services ceo Nicholas Goddard Palmer. “We are very competitive in both price and selection against the local domestic market as well as international hubs and destinations. The departure shops are seeing consistent growth while arrivals stores are growing rapidly. Passengers know that they can buy premium brands upon arrival at competitive prices, which is easier for international passengers than buying en-route.” “ Beauty is performing well in the Middle East. Perfume sales are still buoyant, while make-up and skincare are improving Chalhoub Group co-ceo Anthony Chalhoub Sources: Delhi Duty Free Services, Nuance-Watson (Singapore) Progress in India? Further east in India, after years of frustration, the sub-continent may be close to fulfiling its promise as a duty-free beauty market that could explode. New airports, terminals, or terminal revamps at Bangalore, Hyderabad and Mumbai’s Chhatrapati Shivaji International have ensured retail spaces that suit prestige beauty, and consumers are responding. At Delhi Indira Gandhi International, where a new Terminal 3 was inaugurated in July 2010, Delhi Duty Free Services is delighted with its beauty results. “The big brands are seeing However as an emerging beauty channel in a domestic market where high-end beauty products, in the past, have been hard to find, sales here are mostly confined to fragrances. “Although skincare and make-up are growing well, they are bit more specialist and will take time to develop, but initial results are encouraging,” adds Goddard Palmer. Moving into south-east Asia, Singapore Changi continues to offer one of the best airport beauty selections in the region. Like many locations, it is reporting a strong start to 2011. Chillie Por, beauty category manager at Nuance-Watson (Singapore) which manages the perfume and cosmetics concessions comments: “This year kicked off with a robust May-June 2011 - N°6 - BW Confidential ” 46

Table of Contents for the Digital Edition of BW Confidential - Issue #6 - May/June 2011

Cover
Comment
Contents
Update
- Brand & retail news recap
- Digital digest
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
Launches
- The latest in fragrance, skincare & make-up
Interview
- Puig ceo Marc Puig
Insight: Skincare
- Category overview
- Department store initiatives
- Perfumeries
- The latest trends
Wellness
- Discounting in spas
- Spa case studies
Retail
- New store concepts
Travel retail
- Market analysis: Asia & Middle East
- Chinese travelers
Radar
- Four up-and-coming beauty brands
Market watch: China
- Analysis: country overview
- Industry roundtable
- Prestige retailing
- E-commerce
Packaging
- Decoration techniques
Last word
- LPK Beauty vp group creative director Liz Grubow

BW Confidential - Issue #6 - May/June 2011