(China’s) Century duty completed – with a paneful moment

I’m back in London for the weekend for a few days before next week’s IAADFS show in Orlando post a great experience at what I considered to be an excellent China’s Century conference in Shanghai.

As any conference organiser will tell you, you can’t please all of the people all of the time (hell, often it’s difficult to please any of the people any of the time), but I felt that TFWA made a pretty decent stab at doing just that.

There were several outstanding presentations – China Duty Free Group Vice President Zhao Feng (above) arguably the stand-out for a superbly detailed analysis of the Chinese travel retail market.

But I also liked very much the presentation of Li Can (below), President of China National Service Corp (CSNC), a great pioneer of duty free retailing in China. CSNC runs a chain of 12 downtown stores for Chinese nationals returning from abroad who can purchase within a 180-day period – and it may well run a great deal more in the future.

Li talked ambitiously and impressively of the company’s planned 3,300sq m downtown store in Shanghai, due to open in late 2015, and other expansion plans. But the real nub of his speech came after he highlighted the tremendous growth in outbound Chinese tourism. “All those outbound Chinese are potential customers of CSNC,” Li said, adding that the level of Chinese spending abroad has become “a very heavy burden for the Chinese government”.

Make no mistake, this was an important, and considered, speech. The Chinese government is determined not to repeat the errors made by the Japanese during the great travel boom of the late 60s, 70s and early 80s when the world (but not Japan) got rich from booming Japanese travel-related spending. Expect the authorities to work very hard to encourage domestic consumption – and CSNC’s until now relatively under-developed post-arrivals model may well be a very useful means to achieve that end.

CSNC, part of one of China’s biggest state enterprises, feels like an organisation on the verge of something very big indeed.

There were many other high points. TFWA likes to get marketing gurus on its conference programmes, with mixed success down the years. However, their frontline choice here, China Market Research Group Managing Director Shaun Rein (below), was right on the money (in every sense).

In a telling juxtaposition of slides he showed an image of frenzied Chinese shoppers outside an overseas Louis Vuitton downtown store a couple of years back and then a more recent one (above) of Chinese tourists trekking in the mountains (and, most of all, the clean air).

Does the clear and sustained move away from shopping holidays to experiential vacations spell danger for pure travel retailers, he asked rightly? On the contrary, Rein said, travellers are increasingly going to concentrate their shopping into a single day and a single place – perfect for airport retailers, in particular.

As someone who has been chased out of more duty free stores for taking photos than anyone on this planet (once, famously, being warned, laughably, under the Prevention of Terrorism Act for taking a 30-second, highly complimentary, video of World Duty Free Group’s then-new Heathrow T5 store), I particularly liked Rein’s anecdote about being in a Hermès store in Paris and trying to take photos on his phone of an item to send to his wife so she could choose from the two colours offered.

What happened? He was shouted at by the sales assistant and told to stop taking photos. His message was clear. Stop loving your consumer and they can pretty quickly stop loving you.

It wasn’t just the Chinese speakers that shone. I doubt I have seen a better double-act of suppliers on stage than Furla Global Travel Retail Director Gerry Munday and Edrington Group Asia Travel Retail Managing Director Ryan Hill.  Much as I’d like to write ‘I don’t like Munday’s… presentation’ for the value of a poor Bob Geldof-related joke, I have to say I DID like it. Rightly she questioned whether the industry was becoming over-reliant on the Chinese shopper. Nice problem to have though…

Gerry’s three decades of experience in the business (she entered it when she was at primary school) shone through just as it did at The Trinity Forum in Taipei last year. The lesson?  If a brand executive stands up on stage at an industry conference she or he actually gains more kudos by addressing the issues and not talking about their own company endlessly.

The wonderfully droll Ryan Hill (above) pointed out that Chinese shoppers are not just attracted by luxury; they also crave cutting-edge Japanese or Korean toilets (a worryingly painful-sounding prospect and a surprisingly recurrent theme of the conference) and state-of-the-art rice cookers, he said during an insightful and, again, refreshingly non-partisan presentation.

He also had the conference’s best line. Introduced by John Rimmer, he asked, “Am I turned on?”

“Yes,” replied John, worryingly confident in his answer.

“Sorry let me correct that,” Ryan added quickly, “I meant, is my microphone turned on?”

I’ve heard King Power Group (HK) Travel Retail & Duty Free Managing Director Sunil Tuli (above) speak on numerous occasions down the years and, like the Indian cricket team, he can be hit and miss, his tendency to flippancy sometimes getting the better of him. Here he was in M.S. Dhoni (Indian cricket captain) form, talking the opportunities and weaknesses of the Trinity concept as candidly and insightfully as just about anyone in the industry could. Run your industry retail model via an “auction process” and nobody wins, he contended. Tuli, not madly but deeply, back in the form that made his Trinity Forum debate with the admirable Randy Emch a few years ago on the subject of concessionaire-run retail vs the in-house model such compelling stuff. Excellent stuff.

APTRA President Jaya Singh, of Mondelez International (I swear Morgan Freeman copied his voice), pictured above, was top value and I also liked the ebullience, and substance, of LS travel retail General Manager China Eudes Fabre (below), who announced the company has secured a luxury master concession at Kunming Airport, similar to that it has at Shenzhen Airport.

Throw in an insightful presentation (above) from m1nd-set’s Peter Mohn (the best I have seen him in that he didn’t just present numbers but drew very human, very real, conclusions from them); an excellent (DFS-sponsored) Gala Dinner; a strong line-up of Chinese airport executive speakers; and excellence in the often under-rated art of moderation (John Rimmer, below, as mature and comfortable in his skin as I have seen him, blending nicely with the splendidly engaging local media man Trevor Lai); and you have the recipe for an event that, to me, worked on every level.

Not everyone I spoke to agreed. But then, as I said, you can’t please all the people all of the time. If you did, perversely, you’re probably doing something wrong.

[TFWA President Erik Juul-Mortensen introduces Andrew Ford, Vice President Global Business Development at DFS Group, host of the excellent Gala Dinner. Further pictures below.]

[Above: With Sunil Tuli and one of our gracious hostesses at the DFS dinner; Below: At the Sunil Tuli-hosted table]

[Cécile Lamotte of TFWA and Jennifer Cords of Imperial Tobacco]

[Above: At the Sunil Tuli, King Power Group HK-hosted table]

[Enjoying the gala dinner with good friends Luke Chang, China Duty Free Group; Jonathan Holland, Jonathan Holland & Associates; and Morgan Freeman… sorry Jaya Singh, APTRA and Mondelez World Travel Retail]

[Below: Catching up with the team at Hainan Duty Free, led here by Deputy General Manager Sun Yong (above and second from left in lower picture), who are doing a great job at Haikou Meilan Airport (together with their strategic partner DFS Group) with sales rising +47% last year to RMB930 million (US$151 million). This year, Mr Yong told me, the company is budgeting RMB1.3 billion (US$211 million) but after a great Chinese New Year it is confident of hitting RMB1.5 billion (US$244 million). Look out for my interview soon.] 

Footnote: My Moodie Report Interim Shanghai Bureau – a 56^th floor room at the Jing An Shangri-La Hotel (night view below) – drew a few visitors during the week. Most, of course, announced their visits via a knock on my door. Not the one below…