 |
Only in duty free: Sheng Xiao |
Differentiation, gifting and a focus on Chinese shoppers can be major drivers of duty free tobacco sales, said DFS Group, after hailing the early success of channel exclusive Sheng Xiao, launched in partnership with JTI in February.
As reported, the newly created Chinese cigarette brand will be sold only in duty free and was initially a “˜Changi First’ exclusive. It will also be made available at key strategic airports around the world, targeting the Chinese traveller.
DFS Merchandising Manager Lina Chan said the company was pleased with the initial response from consumers. “We successfully sold through our initial order in one month,” she said.
Among the factors underpinning the performance is its positioning in-store. “Sheng Xiao was developed and positioned specifically for the affluent travelling Chinese customer,” said Chan. “Hence it is displayed in close proximity to premium Chinese cigarettes.”
She added: “Several [other] factors contribute to the success of this launch: the overall design and colour reflects the Chinese heritage and exudes prestige. The crafted tin with the embossed Chinese zodiac adds extra value as it serves as a gift box for the Chinese traveller. The quality of the tin design shows great attention to detail that completes the brand story.
“The octagonal edges of the individual packs and the association with the number eight and prosperity, and the gold tipping colour of the cigarettes [are factors]. All of these detailed design elements combined with the Virginia blend help make Sheng Xiao a success story.”
Chan admits the retailer was cautious about introducing a new brand with no previous awareness among consumers.
“This was certainly a concern when we launched this product given the exclusivity to travel retail,” noted Chan. “However, initial sales results have been very positive. To overcome the lack of brand awareness, we featured the brand on our gondola end caps, cashier counters and promotional dedicated wall bays. We have dedicated category experts to explain the nuances of Sheng Xiao to the Chinese customer. Customer engagement through education is a key element in new launches.”
She also praised the collaboration with JTI. “JTI has been a strong partner for many years. They approached DFS with the idea of developing a new brand targeting the travelling Chinese. After overcoming some initial concerns, we worked on a joint marketing plan that focused on in-store conversion. They have been very supportive to making this launch a success.”
And there’s room in the market for further highly targeted products that create points of difference for tobacco, she added.
“We need to continue to test new products and concepts in tobacco. Differentiation adds excitement and generates gifting options in the category.”
JTI General Manager Worldwide Duty Free David Francis said: “It is obviously a major challenge to launch a completely new and duty free exclusive brand. I am therefore delighted that Lina and DFS had the courage to lead this initiative. Thanks to the excellent support of the DFS team, initial offtake has been positive. As a duty free exclusive brand, we believe Sheng Xiao has the potential to attract additional business to the tobacco category and increase the overall basket size.”
