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Thu, May 18, 2006 - Page 10 News List

Retailers need to know about Asia

EASTERN PROMISE A speaker at a forum for duty free and travel retail outlets said there is fantastic potential in Asia but there is no typical Asia-Pacific customer


A rapidly swelling pool of affluent consumers across Asia means megabucks for the world's big-name retailers -- provided they try to understand what makes the Asian buyer tick, industry observers say.

One of the biggest mistakes, they say, is to assume that simply by setting up shops in the Asia-Pacific region, customers will waltz in.

"The opportunities are clear as a Swarovski crystal but that does not mean that they are easy to realize," said Erik Juul-Mortensen, president of the Tax Free World Association which represents suppliers to duty free and travel retail outlets.

He was speaking on Tuesday at a forum held by the Paris-based body.

"We must still work hard to get them into our stores," he said, adding customer knowledge is critical for success in the Asia-Pacific area.

"I've talked about Asia-Pacific customers but the Asia-Pacific customer does not exist," Juul-Mortensen said.

"This is an amazingly diverse region with diverse customer segments and I believe that they will demand diverse retail experiences," he said.

As a result, travel retail shops have to work harder to distinguish themselves from the region's growing number of malls.

"The Asia-Pacific's new middle classes are discovering amazing new experiences every day in downtown retailing," he said.

"How well does the travel retail compare to them? The customer will be making that comparison every time they travel and we must do the same," he said.

The Tax Free World Association's 385 members supply everything from wines and spirits, tobacco, luggage, electronics and confectionery to the duty free and "travel retail" industry.

The forum was told China is increasingly a key source for global tourism but it will be a mistake to assume the travel retail industry will automatically see a resultant surge in sales.

"Rising traffic gives us the audience. It does not create the performance," Juul-Mortensen said.

"However, as you all know, they will be as demanding as the travellers in other parts of the world," he said.

A survey of 1,500 adult Chinese consumers and leisure travellers by market research firm ACNielsen in February and March showed they ranked shopping a must-do activity when they travel.

The Chinese traveller spends an average US$928 on shopping during his or her outbound trip, which is about 90 percent of average monthly household income, the survey showed.

"The opportunities in the Chinese outbound travel market are not in itself a guaranteed success," said Rene Bos, executive director of ACNielsen's Beijing office.

"Yes we are talking about big numbers but you still have to do a good job in understanding the Chinese traveller. The expansion will be there but it is important not to be mind-boggled by the numbers," Bos said.

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