By Dermot Davitt

CHINA.The first China Travel Retail event concluded today in Shanghai, with a series of strong, candid presentations on the challenges facing the market from airports and concessionaires.

Around 180 delegates attended the event, which was co-organised by UK company Ink and Chinese company GIS Events.

Shanghai Huai Hai Commercial Group Deputy General Manager Yuan Ge Ping began the day with an assessment of the state-owned company’s ambitions in the airport market. Huai Hai, which made its name as a leading property and commercial development company, is a partner with Dufry at Shanghai Hongqiao Airport and is present at 11 airports in China.

“We aim to build our boutique business and grow our number of high-end stores at airports across China,” he said. “We are now expanding to hubs of more than 10 million passengers, such as Guangzhou Baiyun and Chongqing, plus aiming to open in more Tier 2 cities.

“We still have limited expertise in this business, so the profitability of travel retail for us remains a challenge,” he admitted, “but we will build our strategy through cooperation with partners and by leveraging capital markets to grow.” He also stressed the huge retail opportunity that domestic high-speed rail represents in China, noting that Huai Hai will seek to tap into this opportunity.

One of the day’s highlights was a fine presentation from Aéroports de Paris Head of Retail Mathieu Daubert. He spoke about how AdP is targeting the high-spending Chinese passenger through targeted promotions, high-class retailing and investment in new facilities such as S4.

The airport company has created a Chinese language website aimed at helping Chinese travellers prepare for their visit to Paris; it has developed a mobile phone App specially targeted at Mainland visitors to help them navigate its airports, and even ensures that arrivals information is broadcast over the PA system in Mandarin for arriving flights from China, to help passengers feel comfortable in the environment.

Daubert was later joined by Schiphol Group Sales Director Media Gary Mey, who outlined how the Amsterdam Airport operator had created its own mobile App aimed at the Chinese traveller; and by Lufthansa Worldshop Director Sales Marketing Brigitte Wolf, who underlined the airline retail opportunity.

In an engaging and candid presentation, Heinemann Asia Pacific CEO Steffen Brandt noted the big challenges facing concessionaires aiming to enter the market.

Dubai Duty Free Vice President Operations Sean Staunton later spoke about ‘Creating a Travel Retail Culture’ and assessed how the leading UAE retailer’s development mirrored that of the China market today. He also outlined some key characteristics of the Chinese spend at Dubai Duty Free, with over 70% for gifting purposes, men and women spending similar amounts – plus the propensity of many travellers not only to spend on luxury but also mid-priced brands.

A strong final panel session ended the day, featuring Aer Rianta International Head of Business Development, China East Asia, John Woodhouse, The Hurun Report President Sinclair Lu, CAPA – Centre for Aviation Senior Analyst Will Horton and JMG-Research Managing Director Jerome Goldberg.

Here, the vast untapped opportunity among China’s travellers was brought to the fore. Woodhouse noted that, while retailing and the airport environment was improving at China’s domestic airports, there are still 110 million departing passengers per year who buy nothing. Making the offer more compelling, ensuring price promises are in place and are marketed heavily, giving customers more time to spend and improving service were among the keys to changing this, he noted.

Ink and partner GIS Events closed the day by confirming that China Travel Retail would build on the 2012 inaugural conference and would be held again next year in Mainland China, with date and location to be announced soon.

The organisers said they were delighted with this debut event, at which almost 70% of delegates were from Mainland China – a first for any travel retail event, they said.

“We have been absolutely delighted with the support we have seen from the local Chinese delegates”, said Jeffrey O’Rourke, Chief Executive of Ink. “In an industry that is so dominated by Western airlines, brands and concessionaires, it is fantastic to see so much interest and demand from Chinese organisations and businesses looking to develop partnerships and move into this sector.”