THAILAND. King Power Duty Free Co has posted a strong +10.9% rise in sales at Bangkok Airport for the first quarter of 2004, on a traffic increase of just +2.2%.
The increase is even more impressive given a downturn in visitor numbers from the key markets of Japan (-9%), South Korea (-14.4%) and mainland Chinese (-20.7%). Overall traffic rose +2.2%, thanks mainly to hikes in UK, US, Australian, Indian, Malaysian, Swedish and Russian (among the airport’s highest spenders) numbers.
To compensate for the decline in key spending nationalities, King Power has focused intensively on building footfall and store penetration rates, said deputy group managing director Susan Whelan (pictured).
“I think it is very important to take a positive and proactive approach to the situation and focus on selling more products to more people,” she told The Moodie Report.
She cited the example of average liquor spend to illustrate her point. The average spend for the category this year is down – mainly due to the drop in Chinese and South Korean passengers, who traditionally buy XO Cognacs and super-premium Scotch. The Chinese market had been the highest spending group for
liquor, with an average of US$151 per invoice and contributing 5.9% of total liquor sales.
“Our liquor sales are relatively flat against last year(+0.2% growth) – however the number of sales invoices has jumped by +20%. Our penetration and conversion therefore has improved dramatically,” Whelan said.
“If and when the quality and frequency of the Japanese and South Koreans returns to the level of previous years, we will hopefully be well placed to capitalise on an overall increased market,” she added.
The category has been driven by a number of innovations, highlighted by the new Gift Gallery concept in terminal one. The two stores (35sq m/377sq ft and 12sq m/129sq ft) are targeted at the Asian gift buyer. All products are from the deluxe and/or aged categories or are duty free exclusives. The stores are staffed by a team of 15 multilingual “˜duty free ambassadors’, wearing special uniforms. The concept has proved so successful that King Power is appointing another 30 staff to the role.
The star categories in the first quarter have been fragrances and cosmetics, with year-on-year growth rates of +26% and +21% respectively.
Other noteworthy performances have come from watches (up +26%), electronics (+17%), gold and jewellery (+34%) and costume jewellery and sunglasses (+20%).
Editor’s note: King Power Duty Free Co recently secured a new ten-year contract to run duty free at Bangkok and three other leading Thai airports. The next issue of The Moodie Report print edition, out later this month, contains a dedicated analysis of King Power, one of the region’s fastest-growing and most acclaimed retailers.
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