In this guest column, Luke Maga, a Board Member for the Asia Pacific Travel Retail Association (APTRA) and Distell Global Travel Retail’s Managing Director, discusses why the trade association is launching the Alcohol Advisory Group.
With the vast majority of international travel in Asia Pacific still out of operation, the COVID-19 pandemic is continuing to impact travel retail sales.
However, it is encouraging to see opportunities opening up in some areas, such as Singapore where since 1 September the government has created green corridors with several countries, reducing or removing the stay-at-home quarantine requirements. This means travel between Singapore and Brunei and New Zealand is now exempt from quarantine, for example. Meanwhile, the quarantine period has been reduced from 14 to seven days for travel with selected other countries (currently Mainland China, Macau, Taiwan, Malaysia, Vietnam and all of Australia except Victoria).
We expect to see more governments in the region follow Singapore’s progressive lead, with The Ministry of Foreign Affairs saying that the arrangements will help restore connectivity and support economic recovery.
There are other reasons to feel optimistic too, such as the positive traction in Hainan where the government recently increased the annual duty free personal allowance from RMB30,000 (US$4,440) to RMB100,000 (US$14,800). This has driven significant sales as consumers enthusiastically take advantage of the duty free opportunity and the chance to enjoy the freedom of shopping again.
Both of these examples show the value of securing government appreciation of the importance of aviation and travel retail in terms of economic recovery. This is a key mission for us at APTRA. in late 2019, the Economic Impact of Duty Free and Travel Retail in Asia Pacific (commissioned by APTRA in collaboration with the Duty Free World Council) report highlighted the significance of the industry in Asia Pacific, showing that the sector provides over 300,000 jobs and contributes over US$15bn to GDP in the region.
In another positive, travel retail in Asia Pacific is moving more confidently into the digital space. Although it’s still early days, we are seeing an increase in retailers pivoting to embrace the digital opportunity, engaging and selling to shoppers for home delivery via platforms including WeChat.
Spirits are a focus of Changi Airport Group’s current shopping campaign on iShopChangi with weekly discounts and promotions, boosted by livestream sessions hosted by influencers and celebrities. Similarly, the KrisShop ecommerce platform has helped Singapore Airlines continue to earn retail revenues even when much of its fleet is grounded.
This is all good evolution for our industry, as we learn to embrace digital as a friend rather than see it as the enemy. We are building our understanding of how it can add so much more to engagement with travellers long before they reach the airport, and then drive them into stores store with pre-promotion of launches, exclusives and events.
When international travel restarts at scale, APTRA is confident that consumers across the Asia Pacific region will resume their passion for duty free shopping as an essential part of their overall travel experience. We also hope to see revenge shopping behaviour that many luxury retail environments in domestic markets have witnessed since local travel restrictions were lifted, such as Hainan and other downtown duty free destinations.
In the meantime, I am leading a new initiative from APTRA with the launch of a new Alcohol Advisory Group designed to bring spirits companies and retailers together to share learnings and successes as part of a collective drive to build and strengthen future resilience for the industry.
An APTRA Exchange session, entitled The Trinity Through a Crisis, will take place in the Knowledge Hub at the Moodie Davitt Virtual Travel Retail Expo. Click here to register
