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Yesterday’s TFWA Asia Pacific Conference featured a new set-up, which was more interactive and ‘Ted’-like, showcasing how TFWA continues to innovate in its 40th anniversary year. The conference was opened by TFWA President Erik Juul-Mortensen, who shared his insights on the industry’s current state and path forward during times of change. Asia Pacific rapidly regaining momentum T his year is the 40th anniversary of TFWA’s founding, a milestone being celebrated here in Singapore and in Cannes at the end of September. It is also the 26th TFWA Asia Pacific Exhibition & Conference, which has swiftly established itself as a stellar event in its own right, and yesterday Erik Juul-Mortensen shared that this is his last year as TFWA President. “Asia Pacific has powered duty free & travel retail’s growth over the last three decades and is rapidly regaining momentum following the difficult Covid years,” Juul-Mortensen began. “While this region’s dynamic potential is undoubted, the current market presents a more nuanced picture. The rate of post-pandemic recovery varies widely across Asia Pacific. Beyond the passenger numbers, duty free shopper habits in the region are evolving, with a shift from gifting towards buying for self, from planned purchases towards a more impulsive approach, and reduced participation among younger age groups, which should ring alarm bells for us all.” Economic conditions today in China are a concern for many duty free & travel retail professionals, with a troubled property sector, weak consumer confidence and lower GDP growth than in recent years. “The country’s shoppers are understandably cautious when it comes to spending,” Juul-Mortensen explained. “The return to international travel after Covid restrictions has been slow so far. ForwardKeys quotes Chinese outbound flight bookings in Q1 of this year down 32% compared to 2019. By contrast, duty free sales in Hainan rose over 25% last year, but measured against visitor growth of around 60%, that equates to lower spend per head. When analysing the Chinese market overall, I think we need to keep things in perspective. The government’s target of around 5% for GDP growth still beats most other leading economies.” There is, of course, another regional giant whose rapid development will drive duty free & travel retail sales across Asia Pacific and beyond for years to come. Consultancy CAPA India expects outbound international departures by Indian residents to increase from 17.4 million in 2019 to over 50 million in 2030. “The outlook for duty free & travel retail elsewhere in Asia Pacific is positive, too,” said Juul-Mortensen. “ACI World predicts the region’s passenger traffic will be back above 2019 volumes by the end of this year. Longer term, Airbus thinks Asian passenger flows will grow roughly twice as fast as the global average.” While upbeat about duty free & travel retail’s prospects in this region, Juul- Mortensen highlighted two subjects of concern: firstly, the continued lack of reliable, consistent market data, accessible to all and, secondly, sustainability – for which there is, at present, no industry-wide approach. Duty free & travel retail has one of the most transparent, trusted and secure supply chains in the world, and Juul-Mortensen highlighted the campaign and zero-tolerance declaration on illicit trade, counterfeit and IP theft. “Many of our industry’s leading players, such as Avolta, Lagardère Travel Retail and Gebr. Heinemann, along with key players in this region like King Power and Delhi Duty Free, have already joined the campaign, and I urge the rest of the industry to follow suit.” Juul-Mortensen concluded by emphasising that the fundamentals for duty free & travel retail are sound in this, the industry’s biggest region by turnover. TFWA President Erik Juul-Mortensen: “With the mix of passenger nationalities evolving and their preferences changing, we must adapt our offer accordingly, create more engaging activations and harness new technologies to better reach travelling shoppers. As an industry, we must get a tighter grip on our market through data-sharing, and show travellers a more serious, coherent approach to sustainability.” Tuesday 14 May 2024 4 T F W A D A I L Y