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Nuance-Watson Singapore has proved a strong and successful incumbent of Changi’s perfume & cosmetics concession but is certain to face intense competition from regional and international rivals |
SINGAPORE. Bids closed on Thursday for two of Asia’s blue-chip travel retail concessions: Liquor & Tobacco and Perfumes & Cosmetics at Singapore Changi Airport.
The tenders have attracted heavyweight international fields.
The incumbents are DFS Group (Liquor & Tobacco) and Nuance-Watson Singapore (Perfumes & Cosmetics) in each of Changi’s terminals. Each bid for both concessions.
The Moodie Report understands reliably that Changi Airport Group has received offers for both concessions from Lotte Duty Free, King Power Group Hong Kong and World Duty Free Group; while The Shilla Duty Free (P&C), LS travel retail Asia Pacific (P&C) and Sky Connection (L&T) each bid for single contracts.
Dufry did not bid, but arguably the surprising omission from the field is Heinemann Duty Free, which like its Swiss counterpart would have questioned the potential profitability of either contract given the bid levels it foresaw. Whether a Mainland Chinese player (most likely Sunrise Duty Free) joined the fray is so far unknown.
As we reported previously, in a break with previous tradition Changi Airport Group is offering six-year contracts in each case. Previously its core category concessions carried a tenure of three years with two-year extension options.
Both concessions cover terminals 1, 2 and 3 plus the planned T4 at Changi Airport.
Of the tender opportunities, Changi Airport Group said the concessions “represent key touch points of Changi Airport’s retail environment. This is an exciting opportunity for companies to submit competitive proposals and showcase their expertise in offering innovative concepts that will deliver a superior and unparalleled shopping experience to passengers.”
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The acclaimed DFS Liquor & Tobacco operation represents one of Asia’s blue-chip duty free contracts. As with Nuance-Watson, the retailer will face several strong rivals in its effort to retain a long-held concession |
The Liquor & Tobacco contract runs from 9 April 2014 to 8 April 2020, while the Perfumes & Cosmetics contract runs from 1 October 2014 to 30 September 2020. DFS and Nuance-Watson (Singapore) had each extended their contracts to meet the beginning of the new concessions.
In a recent interview Changi Airport Group Senior Vice President, Airside Concessions Ivy Wong told The Moodie Report: “Duty Free Liquor and Tobacco (L&T), and Perfumes and Cosmetics (P&C) are very important concession categories to Changi Airport, and we are excited about the opportunity to inject innovation and dynamism to these core categories. As the retail anchors of Changi Airport’s transit malls and our top two product categories in terms of sales, it is imperative that our L&T and P&C concessions embody the hallmark of the ‘Changi Experience’ and lead the breakthrough in our journey to deliver a superior shopping experience to passengers.
“Through these two tender exercises, CAG is seeking exciting, bold and innovative concepts for both concessions that will allow us to elevate the travel retail experience at Changi Airport to a whole new level. While we expect tenderers to submit competitive proposals, they should also showcase their expertise in offering outstanding concepts that are innovative and refreshing, thereby creating exciting and unforgettable retail experiences that position Changi as the airport with the world’s best in class L&T and P&C offerings.”
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The bids will cover terminals 1, 2 and 3 (the latter pictured) plus the new T4 |
Back in 2007, the last core category tenders for these concessions proved to be titanic contests.
In Liquor & Tobacco, the tender culminated in bids from six of the industry’s most powerful players – DFS Group, Hotel Lotte, Sky Connection, Nuance-Watson (Singapore), Aelia and Aldeasa (now World Duty Free Group). Click here for bid details from that tender and our story announcing DFS’s victory.
In Perfumes & Cosmetics last time, Nuance-Watson (Singapore) placed a commanding bid to retain the business, against competition from Aelia, Aldeasa, DFS and Lotte. Click here for our story on that tender and the full list of bids from 2007.
It’s likely that both incumbents will have a fight on their hands to re-capture these lucrative contracts for a further six years.
May passenger traffic
In other news, Changi handled 4.28 million passenger movements in May 2013, a rise of +4.7% compared to the same period in 2012. Flight movements increased by +5.4% to 28,500.
The growth in passenger traffic was supported by a “healthy increase” in air travel between Singapore and Southeast Asia, Northeast Asia and South Asia, the airport said.
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Source: Changi Airport Group |
Among Changi’s top ten country markets, passenger movements between Singapore and Japan, Malaysia and Thailand registered double-digit increases. Australia, China, Indonesia, Malaysia and Thailand ranked among Changi’s top five markets in May 2013.
For the period of January to May 2013, 21.6 million passenger movements were recorded at Changi, +4.8% more than the corresponding period in 2012. Aircraft movements grew in tandem, increasing by +4.3% to 138,600.
As at 1 June 2013, more than 100 airlines operate at Changi Airport, connecting Singapore to 250 cities in some 60 countries and territories worldwide. With more than 6,600 weekly scheduled flights, an aircraft takes off or lands at Changi roughly once every 100 seconds.
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Source: Changi Airport Group |
Changi welcomes new airline and new retail outlets
Changi Airport welcomed the return of SWISS on 13 May after a four-year hiatus. The Switzerland flag-carrier’s daily Zurich-Singapore services will boost Changi Airport’s connectivity to Europe. With the arrival of SWISS, Changi Airport is now connected via more than 300 weekly flights and 52,000 weekly one-way seats to 14 major European cities.
Several retail and dining outlets have commenced operations at Changi Airport’s three terminals. KOI Express has opened an outlet selling bubble tea in Terminal 3’s Basement 2, while Penang food specialist Penang Culture opened at the mezzanine level of Terminal 2’s Departure Hall. Children’s toy shop Play2Learn has opened in Terminal 2’s Departure Transit Mall while fashion brands Paul & Shark and Kipling have opened in Terminal 1’s Departure Transit Mall.
Changi Recommends, a service that offers deals and information to travellers arriving into Singapore, has opened in Terminal 1’s Arrival Hall. With the opening of this outlet, Changi Recommends is now available in all terminals of the airport.
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Kipling began trading in early May at Singapore Changi Terminal 1 |
