INTERNATIONAL. China Duty Free Group President Charles Chen; DFS Group North America Vice President, Business Development Joe Lyons; and King Power International CEO Aiyawatt Srivaddhanaprabha have been named The Moodie Davitt Report’s People of the Year.
Each year since The Moodie Davitt Report’s founding in 2002 we have honoured individuals whom we feel have made a particularly important impression on the travel retail sector. This year we added our three ‘Positive Disruptors’ of the year, a trio of entrepreneurs who are helping light the digital path forward for travel retail as it adapts to a complex new world of alternative communication, payment and fulfilment platforms.
PEOPLE OF THE YEAR
CHARLES CHEN: What a remarkable year it has been for the much-respected travel retail executive since he was named to the top job in Chinese travel retail, President of China Duty Free Group (CDFG), in late 2016.
Chen has worked for CDFG since 1987 in various leadership positions, winning particular accolades for his role in spearheading the retailer’s astoundingly ambitious and subsequently hugely successful Haitang Bay project, opened in September 2014.
When he assumed the President’s role, Chen pledged to follow a global vision, and to leverage parent company China National Travel Service Group’s resources to take the company to “a new horizon”.
He’s achieved that in double-quick time. Just count the major successes. In 2017 CDFG has triumphed in the Beijing Capital International Airport T2 duty free tender and snapped up 51% of rival Sunrise Duty Free’s Beijing operations (Sunrise retains the Beijing T3 business), with further developments to follow soon).
The company has also secured (and begun) the Hong Kong International Airport liquor/tobacco/gourmet foods concession in partnership with Lagardère Travel Retail, a huge strategic gain. CDFG also snapped up a string of airport arrivals duty free concessions in Mainland China and was recently awarded the departures duty free concession at Guangzhou Baiyun Airport Terminal 2 – China’s third-busiest airport.
Expect more of the same in the future. Downtown shops on the Mainland, and perhaps abroad loom on the immediate agenda. Anyone who heard Chen’s passionate and determined speech at November’s Trinity Forum was left in no doubt about the seriousness of his convictions. One senses this is CDFG’s moment, and Charles Chen is determined to seize it.
JOE LYONS: It would be hard to imagine a more reluctant honouree than Joe Lyons when DFS marked the North America Vice President, Business Development’s 50 years’ service recently. It would be equally hard to think of a more deserving individual to be singled out for outstanding corporate contribution.
Since he arrived in Honolulu to work as Operations Manager for the-then Duty Free Shoppers in 1967, Lyons has been a constant for DFS – and for the travel retail industry. He has played a huge, often behind-the-scenes, role in DFS’s success over those decades. Many of the retailer’s contract retentions down the years have the Joe Lyons stamp writ large on them. The same applies to many of the North American travel retail sector’s most impressive achievements.
Those achievements were poignantly summed up by a long-time colleague, DFS Business Development Manager, North America Bruce Tweitmann, speaking at the 50-year celebration in Los Angeles in November. “Joe is the most generous man I know, sharing his time, his sage advice, and quietly sharing his treasure in supporting many worthy causes for people in need, often in concert with DFS,” he said. “His habit of quietly giving back is part of the historical ethos of DFS itself – and it’s well represented in Joe.
“Joe continues to display an unrelenting passion for DFS, our business and our people. For him this company is literally the living legacy of his life’s work. In sum, Joe Lyons embodies every noble aspect of the DFS promises and beliefs, and it’s impossible to image the organisation without him.”
It is indeed. A man of immense stature over 50 years. And for The Moodie Davitt Report, one of our People of 2017.
Aiyawatt Srivaddhanaprabha: It is not easy stepping into shoes quite as big and impressive as those of King Power Founder Vichai Srivaddhanaprabha – and actually no easier when you are his son. But Aiyawatt Srivaddhanaprabha has done that seamlessly since assuming the role of CEO of Thailand’s dominant travel retailer – and one of the world’s largest – in 2016. Remarkably, he has combined that role with that of Vice Chairman of English Premier League football club Leicester City, where he is entrusted with running the club and staff management.
It has, in fact, been a hugely successful year for King Power, buoyed by resurgent Chinese tourism (Thailand was a major beneficiary of the THAAD-related downtown in Chinese visitors to South Korea). And it concluded in suitably grand style with the recent soft re-opening of the spectacular new-look King Power Rangnam in Bangkok (the Grand Opening is on 18 January, 2018).
In 2016 King Power ranked seventh in The Moodie Davitt Report’s annual Top 25 Travel Retailers league with sales of just over €2 billion, having only broken into the top ten in 2014. That’s a remarkable achievement for a one-country operator and it’s clear that under the young and dynamic leadership of Aiyawatt Srivaddhanaprabha the thirst for growth is not yet sated.
OUR POSITIVE DISRUPTORS OF THE YEAR
STEPHAN UHRENBACHER (FLIO): The self-styled serial entrepreneur launched Flio in August 2015 with the intention of creating “the global airports app”. That’s some mission, given the still-fledgling state of many airports’ digital media approaches in 2015 (and for many, still today) and the fact that numerous airports prefer to have their own app. But those challenges have not deterred the German internet entrepreneur (he founded Qype, which he built into Europe’s largest local review website, selling it to Yelp in 2012); in fact, they seem to have encouraged him.
Today Flio is working directly with numerous airports (including Amsterdam Schiphol, Athens, Hamburg, Bremen, Cologne, Vilnius and Nice Côte d’Azur).). Its partnerships also encompass numerous food & beverage operators and retailers, including SSP, Host International, The Restaurant Group, Marché, Gebr Heinemann, and Eurotrade. And its burgeoning advertising function now boasts several blue-chip clients, not least L’Oréal, The Estée Lauder Companies, Mondelez and Hugo Boss.
Not bad going in just over two years, and there are plenty of positive signs ahead. Flio has just attracted the interest – and investment – of AviAlliance Capital, a leading private industrial airport investor and manager, which has taken a minority stake in return for a “healthy single-digit million Euro” investment.
That financial impetus will help Flio expand beyond the app into aiding airports to monetise their customer-facing digital assets through what has been dubbed the ‘Flio Digital Airport Experience’. Uhrenbacher says: “The reality is that, within the airport space, there is very little in the way of digital assets that you can access – for people looking down (at their phones) instead of up (at the terminal advertisement spaces). The ones where people look up are clearly not personalised, and that’s a big problem.”
Like all good disruptors, Uhrenbacher is challenging legacy models. Like all good disruptors, the ‘establishment’ doesn’t always like what he has to say. But his impressive track record, including the growing support of industry stakeholders, suggests he, and Flio, are here to stay.
[Read our recent interview with Stephan Uhrenbacher here.]
CENK AKERSON (DUTYBUDDY): Like all brilliant ideas, one wonders why others hadn’t thought of it earlier. DutyBuddy is not some IT geek’s brainwave but a meticulously thought-out omni-channel idea, supported by rigorously structured digital and payment technology, that taps into the intriguing notion that every year hundreds of millions of travellers’ allowances go unused.
What if those travellers who didn’t want to buy (but by definition had the allowance/right to purchase) bought for those who couldn’t travel but did want to buy?
Enter Cenk Akerson, a youthful ten-year veteran of French beauty giant L’Oréal (including over three years in travel retail), the brains trust behind DutyBuddy.
Akerson’s premise is beguilingly simple – DutyBuddy will tap into the ‘shopping for others’ market, something he describes as a “blue ocean” for travel retail. “Shopping for others is a huge existing business today but no tool nor action has been put in place to serve this market,” he says.
The mobile application facilitates shopping for friends during international travel, in return for rewards. Its primary (though not exclusive) target is three key travelling nationalities – Chinese (48% of whom shop for others), Russians (27%) and Brazilians (41%). Akerson believes some US$2.3 billion in incremental sales can be generated by maximising the ‘shopping for others’ market.
In contrast with e-commerce competitors, DutyBuddy works with existing travel retailers rather than competing, driving incremental customers and revenue to the channel. Retailers and brands can promote special offers, and passengers are able to tell others when and where they are travelling.
“Whereas most disruptors come to an industry and disrupt the existing players negatively – for example with Uber in the taxi market or Airbnb to the hotel sector – our model is to be a ‘Positive Disruptor’,” says Akerson. It’s early days but the signs are indeed positive that DutyBuddy will be winning a lot of friends soon – consumers and industry stakeholders.
[Read our recent interview with Cenk Akerson here]
KIAN GOULD (AOE): None of the industry’s positive disruptors have made a bigger impact on the travel retail sector than the founder of German company AOE.
In January, AOE, a pioneer of airport omnichannel retail activities, announced a €13 million investment from German private equity firm LEA Partners. That investment has allowed the entrepreneurial venture to accelerate its mission of digital transformation across the world’s airports.
AOE is playing a key role in Frankfurt Airport’s acclaimed omnichannel development, through the deployment of Gould’s company’s OM³ (Omnichannel Multi-Merchant Marketplace) Suite . Since then it has signed a partnership with Auckland Airport, which the latter’s CEO Adrian Littlewood said would transform the New Zealand airport into “Australasia’s most digital gateway and provide our global and domestic passengers with a one-of-a-kind personalised journey”.
Hot on the heels of that deal, came a similar agreement with Heathrow Airport in London, a key component of the latter’s ‘digital transformation strategy’. OM³ will be used to digitalise Heathrow’s non-aviation revenues and provide customers with a “unified and seamless online and offline experience”, the partners said.
Heathrow Airport Retail and Service Proposition Director Chris Annetts commented: “This partnership with AOE is the next step towards building seamless end-to-end experiences for passengers and enabling us to interact with them more efficiently for an enhanced and memorable journey.”
AOE said its omni-channel platform will integrate seamlessly with Heathrow’s existing infrastructure. The OM³ suite will ultimately align with numerous additional features, including loyalty programmes, lounge access, parking and VIP services.
Gould is a fascinating, outspoken character. He ruffled more than a few feathers in his keynote session at the recent Trinity Forum, but one suspects that won’t have worried him too much. Taxi drivers the world over derided Uber; hoteliers dismissed Airbnb; Blockbuster scorned Netflix; Newspaper moguls scoffed at the Internet. Industries are not saved by those who seek to maintain safe havens.
[Read our interview with Kian Gould here]