Bluebell Group strengthens China presence through the full acquisition of Star Brands Travel Retail

CHINA. Bluebell Group, Asia’s leading brand operator and distributor, announced today it has further strengthened its China operations by completing the full acquisition of Star Brands Travel Retail, a travel retail operator in China’s key Hainan duty free hub.

The deal establishes Star Brands Travel Retail’s longstanding partner, Bluebell Group, as the sole owner.

The new entity, part of Bluebell China, offers global brands already present or looking to enter the Hainan travel retail market a wide range of brand operation and management services.

The Bluebell China travel retail team will leverage the Group’s leadership in travel retail and a long history of partnership with global brands, together with the existing brands portfolio initiated by Star Brands Asia, local China expertise and an on the ground team.

Using that leverage, the Bluebell China travel retail team will facilitate local operations and navigation of the travel retail opportunity Hainan represents for brands in China’s local duty free market.

Bluebell China’s services in Hainan include assistance with entry into the island’s major duty free retailers, business planning, retail management and staff training, image and marketing management, digital amplification, and retail store development.

Reinforcing the Bluebell China identity: Samy Redjeb and Rob Robertson with the Star Brands Travel Retail Team during a recent visit to the newly opened cdf Haikou International Duty Free Shopping Complex

Bluebell Greater China Managing Director Samy Redjeb (see full interview below) expressed his delight in consolidating Bluebell Group’s China presence. “We are excited to now be fully operational in China and accelerate the potential of the China travel retail opportunity for our brand partners,” he said.

“Thanks to the great groundwork by the Star Brands Travel Retail team over the past two years, we have a strong versatile local team, two offices and resources on the ground for store construction and visual merchandising project management in partnership with Sina Retail. Our aim now is to expand our promise of retail excellence in the local China travel retail market for the success of our brand partners.”

Star Brands Asia Founder and CEO Rob Robertson added: “The Bluebell Group’s full acquisition of Star Brands Travel Retail is a natural evolution of our long term partnership in China. Over the past two years, the Star Brands Asia team built the travel retail business, Star Brands Travel Retail, through our local expertise and understanding of the Chinese market.

“We have put in place an outstanding team, forged local relationships and developed a diverse portfolio of brands, and will remain involved to support a seamless transition and develop synergies with our Star Brands Asia domestic business.”

Interview – Samy Redjeb on the great Hainan opportunity

On the eve of the announcement of Bluebell Group having completed the full acquisition of Star Brands Travel Retail, Bluebell Greater China Managing Director Samy Redjeb spoke exclusively to The Moodie Davitt Report Chairman Martin Moodie about the significance of the deal.

“A new chapter for Bluebell.” That’s how Bluebell Greater China Managing Director Samy Redjeb describes the full acquisition of Star Brands Travel Retail by Bluebell China. A new chapter, in fact, of a very long-running story. Bluebell has been active in China for some four decades, having introduced Louis Vuitton to the market there, followed by a series of other fashion and luxury brands in ensuing years.

In 2018, Bluebell invested in Star Brands Asia, a company founded by American beauty sector specialist Rob Robertson in 2009 focused on bringing the world’s best niche beauty brands to China. Bluebell stepped up its China local market presence in September 2020 by investing in Shanghai-based Translatio, a company founded in 2003 by Angelo Negro and Jimin Lee. The deal with Translatio created what Bluebell called Asia’s most comprehensive omnichannel distribution network for the luxury sector, with a strong presence across fashion and lifestyle product categories.

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The success of these partnerships and the sustained boom in Hainan’s offshore duty free market led to the two partners creating Star Brands Travel Retail in April 2021, today Bluebell China. The venture was designed to unlock the potential for global brands entering what had become Asia’s and the world’s modern-day travel retail hotspot.

Samy Redjeb, appointed to his current role in August after a stellar 11 years-plus career with Bluebell, says that the long-term importance of the Hainan market warranted the group having a more permanent presence there. Consequently it was decided to fully acquire Star Brands Travel Retail to build in-market strength in both Haikou and Sanya in Hainan province.

“I said, ‘Let’s not try to reinvent the wheel’,” Redjeb recalls. “With an existing team on the ground, we already had local expertise in market. We were representing some good names with brands such as Diptyque, Dr. Ci:Labo and Rémy Cointreau. Plus, we just concluded a contract for Havaianas. Under Bluebell China, we already have  ten brands now and a team of 25 staff in Hainan.”

The category base, though led by beauty, is deliberately diverse, also including fashion, spirits and lifestyle products. In the case of the hugely successful Brazilian flip-flops brand Havaianas, Bluebell China will handle both duty free and duty paid channels in Hainan.

Fact-finding mission: Samy Redjeb, Rob Robertson and the Star Brands Travel Retail (now Bluebell China) team during a recent tour of Hainan 

Earlier this month Redjeb, made his first trip to Hainan, visiting stores in the shopping hotbeds of Sanya and Haikou as well as the Wangfujing operation being developed in Wanning and set to open in early 2023.

“The market opportunity is there,” he says. “I was super impressed by the infrastructure – the hotels, the roads, the airport quality, the retail spaces. I was also excited to see the quality of the duty free players there. CDF, of course but with, say, HTDF I was very impressed by their brand mix and range.”

“Bluebell China will concentrate on Hainan as a first step because I think the opportunity there is immediate. We expect 20 to 30 million visitors in 2023 from the numbers we’ve got. And with the RMB100,000 (US$14,350) annual allowance and the fact that we don’t know when China is really going to open up the border for international travel, Hainan is very important.

“And even when China does open up, we still believe that Hainan will remain a key destination because less than 10 percent of the population hold a passport today to travel outside of China. So Hainan for us is going to remain a very important destination for Chinese travellers. All the infrastructure and all the set-ups are in place. And it’s a shopping paradise for consumers with the RMB100,000 allowances.

“There have been a lot of new store openings during the last two years. Because of the pandemic, no-one outside China could see the new CDF complex, for example in Haikou, or the new development with Hennessy or the Wangfujing development in Wanning. So they need people on the ground. They need our support to monitor the business, to help them to pitch the operators, but also to help in terms of retail operation management, which is a big issue for many brands in Hainan.”

Opening day at the spectacular cdf Haikou International Duty Free Shopping Complex, a powerful statement of confidence in the Hainan market by sector giant China Duty Free Group

Such challenges are hardly surprising given that – incredibly given its scale – the Hainan offshore duty free market is just 11 years old. In several cases – HTDF, GDF Plaza, Times DF, and CNSC – the retail operations have been open for less than two years. Any market so young and yet burgeoning to such an extraordinary extent is likely to experience growing pains, which is where Bluebell China enters the scene.

“For our brand partners, we are their team on the ground,” says Redjeb. “We support them on various aspects of their business. Being on the ground, we are on top of the latest trends as well as regulations, and know where and how they should try to push their brand. So we provide support in areas from the business plan development, for example, market entry, as well as staff recruitment, ongoing training and marketing amplification.”

While the duty free retailers have their own shop floor employees, Bluebell China puts additional sale associates or brand ambassadors in place for its brand partners, something that can make a significant difference in terms of customer engagement and conversion.

“These teams are trained by us so they know about storytelling and service,” Redjeb comments. “We also do a lot of visual merchandising. For example, when the new CDF store opened in Haikou, we helped brands to handle the overall set-up overnight and to merchandise the stores because everything was opening at the same time.”

Bluebell Group is an omni-brand operator, curator and distributor. In 1954, the group pioneered the luxury industry in Asia, and has been introducing many of the world’s leading brands to the region ever since.

Bluebell China is increasingly involved in marketing activation too as brands realise they cannot simply rely on footfall but need to proactively engage with the consumer. With Bacardi, for example, the company does a lot of event work with KOLs and local hotels, arranges mixology demonstrations and tastings. With Havianas – for whom Hainan is seen as an ideal showcase for the wider China market – a similarly proactive and engaging approach is being adopted.

Given its expertise and heritage, Bluebell is never short of opportunities to bring new names to market. So what are the criteria for working with a brand? “First, we look at the size. We cannot pick a brand that is too small,” Redjeb replies. “In duty free it’s hard to get a space or a counter, or even a gondola, even for an international brand. The retailers are becoming pickier, and they have limited space. So we need to have brands that already have some traction in, say, Korea duty free or in Singapore duty free or some level of international presence.

“They also need a strong presence in the domestic China market. If brands are unknown in China domestic, it’s very hard because Hainan is catering to Chinese shoppers only and if the brand does not have local awareness, it is more complicated.”

Samy Redjeb offers high praise to Hainan travel retailers such as  Hainan Tourism Duty Free Shopping Complex

Category-wise, Bluebell China will focus mainly on beauty and fragrances and wines and spirits. Some fashion and accessory brands will be included although they are currently outside the core focus.

“We have a lot to do in beauty and spirits, and fragrance is a category that we want to develop,” Redjeb comments. “I was impressed by the number of niche fragrance brands that are expanding in the Hainan market, including Atelier Cologne, Penhaligon’s, L’Artisan Parfumeur, and Maison Margiela. Bluebell has a very, very strong portfolio of perfume in Japan where we are the biggest perfume distributor. And we also have a strong market in Korea travel retail and domestic. So, again, I think we will find synergies for our other partners in the Hainan market.”

Redjeb says the Hainan development is “super exciting” on a personal level. “It’s a big challenge because we are a leader in Korea duty free so there are high expectations from our shareholders. But the Hainan market is completely different in terms of model and so on. I’m very optimistic about the market, and I’m confident our regional expertise in this sector with our on the ground teams and focus on quality of service puts us in a good position to support brands in Hainan.”

The synergies between Star Brands Asia and Bluebell China offer a strong advantage to brand partners in China, Redjeb says, in that there is no conflict of interest between the local market and duty free. That is not always the case with brands which operate directly in China, where tensions between travel retail and local teams in areas such as pricing and marketing spend often simmer.

With Star Brands Asia and Bluebell China no such dilemma exists. “We share brands like Malin+Goetz and Moroccanoil and we have very strong synergies,” says Redjeb. “In actual fact, we have been working closely with Rob in Hainan since he launched the business there, and some key brand partnerships spawned from that collaboration.”

Asked if he has a final message for the industry, Redjeb says, “They should come and visit Hainan as soon as they can. Get on a flight because there are many locations worth a visit, local knowledge is crucial as well as an understanding of the level of the quality of retail and staff over there.”

Underlining its belief in and commitment to the market, Bluebell China is about to bolster its existing Sanya office with a second base in Haikou, which will be operational in January. The new chapter is truly taking shape.

About the Bluebell Group

Bluebell Group has pioneered building successful brands in Asia since 1954. The group is present in Japan, South Korea, Mainland China, Hong Kong SAR, Taiwan, Macau SAR, Singapore, Malaysia, Cambodia and Australia.

Bluebell Group’s distribution network includes flagship stores, shop-in-shops, counters, its own multi-brand concepts, as well as a highly selective wholesale network, together with both direct e-commerce and marketplaces, covering domestic and travel retail.

The Group operates across multiple product categories, including accessories, footwear, apparel, Fragrance, Beauty, Gourmet, Jewellery, Watches, Eyewear and Tobacco.

A family-owned group, Bluebell Group today has over 3,800 employees, 650 points-of-sale, and US$2 billion in turnover.

About Star Brands Asia

Established in 2009 by Rob Robertson, Star Brands Asia provides comprehensive brand management services to niche and mid-sized beauty brands in need of transformation in China.

The company’s wide capabilities include all aspects of strategic planning and go-to-market restructuring, PR, influencer marketing and full social media management, TP operations on Tmall and other ecommerc platforms, offline retail business expansion and management, logistics, finance, local entity establishment, IP recapture, HR, and more. Star Brands Asia provides brands with a ‘virtual subsidiary’ in China.

Today Star Brands Asia operates 14 brands, has 50 employees and sees retail sales under management growing at +300% in 2022 versus 2021.

COMING SOON: THE NEW WONDERS OF THE TRAVEL RETAIL WORLD

The Moodie Davitt Report is delighted to announce ‘The New Wonders of the Travel Retail World’, a duo of landmark publications dedicated to extraordinary projects that are set to redefine the travel retail world.

One is dedicated to the magnificent cdf Haikou International Duty Free Shopping Complex, which opened on 28 October in Hainan province, China.

The multi-media, bi-lingual publication is a pioneering joint venture between The Moodie Davitt Report and Hainan Hinews Media Co.

For advertising details please contact Irene Revilla at Irene@MoodieDavittReport.com

The other is the Hamad International Airport Expansion in Doha, Qatar, inaugurated on 10 November. This stunning development is anchored by The Orchard, a 10,000sq m indoor tropical garden with a 268-sqm water feature complemented by a luxury-led commercial offer boasting 65 stores and 35 food & beverage outlets.

Food & Beverage The Magazine eZine