Latest posts by Martin Moodie (see all)
- Back in Basel as the beat goes on for Dufry - January 25, 2020
- Doing the right thing in Switzerland - January 22, 2020
- How a tale of unrequited love inspired a business empire - January 21, 2020
It stretches for 55km, made up of three separate stretches. It operates 24 hours a day and puts a cluster of major cities in the Pearl River Delta within a three-hour commute of Hong Kong. It cuts the travel distance between Hong Kong and Zhuhai or Macau to just 40 minutes.
The Hong Kong-Zhuhai-Macao Bridge is a man-made wonder set majestically in the middle of natural wonder. The terminal buildings on either side are pretty impressive too.
Yesterday, I took the bus over the bridge en route to Duty Free Americas’ inauguration of an impressive two-phase refurbishment of its store at The Venetian Macau Resort Hotel. At the Hong Kong terminal I bumped into Arne Blom (below, second from right), Vice President Asia Pacific of Laboratoires Filorga, recently acquired for €1.5 billion by Colgate-Palmolive, and Hervé de Bernis (third from left), Director of Filorga JV Fangzi Group with their dynamic team.
Just as it is across much of Asian travel retail, Filorga is generating great sales in Macau from relatively modest space. The brand has grown enormously over the past four years, domestically and particularly in this channel. Arne’s and Hervé’s commitment has been key to that success.
What an interesting choice of acquisition then by global consumer products multinational Colgate-Palmolive. The US toothpaste-to-pet food giant saw the acquisition as key to a new focus on higher-margin business, premium beauty and, in particular, travel retail. With the weight of such a powerhouse behind it, you’re going to be hearing even more about Laboratoires Filorga in this channel.
CEO Jerome Falic reckons Duty Free Americas has the best retail location in the whole Venetian complex and judging by the footfall I witnessed yesterday, he could be right.
Hong Kong might represent a tourist ghost town at present but Macau is proving relatively resilient to the escalating crisis faced by its near neighbour. Reliable sources confirm that the downtown travel retail business in Hong Kong has been in freefall over the past few weeks – DFS is probably down -50% – and while Macau’s growth has slowed, its numbers are still positive (circa +15-20% ahead year-on-year).
The commercial toll on all manner of Hong Kong businesses is terrible. My Hong Kong base is in Tung Chung, where China Duty Free Group (CDFG) recently opened an elegant CDF Beauty store. The timing couldn’t have been much worse though CDFG has a long-term view and will be able to ride out the storm. Smaller businesses will not.
On Saturday I walked the CDFG store in the early afternoon. It was beautifully fitted out but staff way outnumbered the smattering of customers. There was trouble in the air.
Within an hour, a huge crowd of protesters had gathered outside the nearby Tung Chung MTR station. A week earlier, protests on the same spot had turned violent. An ugly and tense stand-off with police developed. I decided it was time to get out. As I walked home, I passed the CDFG store. Like all those around it, the shutters had come down. Let’s hope that spectre doesn’t become a symbol of the commercial damage being done by a crisis that has no apparent end in sight. At least not a happy one.