HONG KONG. As bids closed today on the Hong Kong International Airport core category tenders, The Moodie Davitt Report can exclusively reveal that a powerful joint venture alliance between China Duty Free Group (CDFG) & Lagardère Travel Retail has bid for both available concessions – beauty & accessories and liquor & tobacco.
As revealed by The Moodie Davitt Report, Airport Authority Hong Kong released two tenders on 31 October 2016 for the liquor & tobacco concession and perfume/cosmetics & fashion concessions at Hong Kong International Airport. The winners will be named in Q2 2017. [Stay tuned as later today we will publish The Moodie Davitt’s view of the likely field for the two contracts]. As reported, a separate tender for the confectionery concession will be issued soon.
The liquor & tobacco tender covers eight shops in T1 and T2, embracing some 3,400sq m. The dual perfume & cosmetics and fashion accessories tender involves six shops and 3,300sq m of space.
Confirming the joint venture with CDFG, Lagardère Travel Retail Regional Chief Officer Asia Pacific Emmanuel de Place told The Moodie Davitt Report: “We are really delighted that China Duty Free chose us, Lagardère Travel Retail, as their partner. We are delighted to bring our expertise to this tender because they are super professional and we are very excited to present this offer with them.
“It’s a partnership in which China Duty Free is the leader of the joint venture consortium. They have a very strong position in China and know the market perfectly – particularly in terms of the Chinese consumers and their expectations. They also know how to adapt to the latest trends of the new Chinese consumers and the millennials; and the behaviour of travellers in our airports and stores – all of these have been important changes in recent years.
“China Duty Free has perfectly captured these changes and knows how to address them. Hong Kong International Airport is a fantastic platform for travel retail and duty free in this region as it’s such a strong hub in Asia and full of these new Chinese consumers – it’s a very, very interesting market in that regard.”
De Place acknowledged that trading conditions in Hong Kong have not been easy but said he remained optimistic about growth prospects. “We have to recognise that it’s been a very challenging market for our colleagues at DFS [the incumbent HKIA concessionaire] and even for our concessions in Hong Kong – Travel Essentials and fashion and luxury – but I think that the expansion of this airport and the redevelopment that they are planning makes it really exciting for the future.”
Commenting on the Sino-French partnership, de Place said: “Working with them has been extremely easy; they are very strong, very professional and have a lot of expertise. CDFG have a highly professional team… with fantastic project planning, product knowledge, operations of course, and superb supply and logistics organisation here in Hong Kong – from where they supply the whole Chinese market. So they are a very, very strong operator in this part of the world, and now they want to expand outside of [Mainland] China in airports.
“We believe that we also bring considerable expertise to this joint venture in many ways. We know how to deal with big tenders like Hong Kong and Singapore; and we have a very strong relationship with international suppliers in the beauty and liquor categories, which helps us understand well the products and the merchandising for these categories.
“For sure we will share a lot in operations, customer service, animation, and digital and new experiences that we will try to bring to the passengers in Hong Kong.
“It makes a very balanced and powerful relationship. China Duty Free is clearly the leader but we are also bringing our expertise – with both of us together it makes the perfect combination for such a tender.”
