Page 38 - Sphere No.8 (Mar 2003)

R E T A I L
SPHERE
36
for China and the region lies mainly in
the convenient access it provides to
flights and destinations around the world.
At present, 90 international destinations
are served from Hong Kong, giving
global access to passengers arriving from
a further 42 airports in Mainland China.
Half the world’s population are within
five hours’ flying time of Hong Kong – a
huge potential market for the HKIA and,
by extension, for Nuance-Watson, which
is currently in the process of tendering for
further concessions.
Those passengers span the social
spectrum, from businessmen to students
to young families and retirees. Departing
passengers, not surprisingly, spend more
than those coming into Hong Kong, and
men account for a whopping 70% of
transactions.
Clarice Au says the majority of sales
are made to business people, many of
whom are regular shoppers, like Flora
Chan, using Hong Kong as a hub.“Price
is not a big consideration for them,” she
explains,“but time is.”
According to Alessandra Piovesana,
nearly a quarter of departing visitors
bought something in a New Horizons
Duty Free store in 2002. Taiwanese
shoppers, who account for 21% of New
Horizons Duty Free sales, like to buy
Rolex watches, Montblanc pens,
Lancôme and Estee Lauder cosmetics,
handbags from Ferragamo and Cartier,
and Sony electronics, while mainland
Chinese (10% of sales) choose Rolex and
Piaget watches, Christian Dior fashions
and Bally shoes.The Japanese – once the
world’s most dedicated duty-free shoppers
– now account for 17% of sales, buying
Godiva and Peninsula chocolates along
with Hermes and Bvlgari luxury goods.
Making up the difference are American
and European customers (23%), Southeast
Asians, Koreans and other nationalities.
“What [customers] buy depends on
the strengths and awareness of these
brands in their respective local markets
and the brand’s perception,” Piovesana
explains.
While the Asian crisis of 1998 put an
unmistakable dent in retail revenues, the
risk-diversified nature of the business,
with its wide base of international
customers, meant that Nuance-Watson
could react quickly to soften the blow.The
events of September 11, however, had an
immediate impact. “9-11 seriously hurt
our business,” concedes Piovesana,“but as
“We can offer the
customer exceptional
service, in-depth
product knowledge
and limited edition
products found only
in the travel
retail sector.”
time goes by, people are rebuilding their
confidence in travelling again. Security
levels have been upgraded at HKIA,
which means people have less time to
shop, although some highly motivated
shoppers, particularly the Taiwanese and
Japanese, will make allowances and arrive
at the airport earlier.”
Weathering these crises through
its initiative and responsiveness to
changing market demands, Nuance-
Watson enjoyed good sales growth in
2002, and plans for further growth are
underway. The expansion of SkyMart’s
East Hall, the principal airside retail area
serving all passengers, will almost double
the retail space available. On Level 7, it
will increase from a current 4,800 square
metres to 6,800 square metres while Level
6 will more than double from 3,500 to
8,300 square metres.This new space will
offer around 25 additional retail stores.
The configuration of the area is also
being redesigned to improve the flow of
passengers and shoppers through the area
– escalators are being realigned and
corridors widened.
Nuance-Watson is poised for its piece
of the pie:“Most importantly, we want to
win market share for our business in
HKIA,” says Piovesana. “It is a huge
airport, the hub of Asia, and our first
objective is to be outstanding here.”
Beyond Hong Kong, the Group is
looking to other airport opportunities
in Asia. “China is a matter of when and
how,” says Piovesana,“not if.”
For Asia’s leading travel retailer, things
are just beginning to take off.