Premium Beauty News - What can you say about the situation in travel retail?

David Dayan - Before Covid, travel retail was a key driver for perfume and cosmetics luxury brands. This sector achieved two-digit growths for ten years and brands worked hard to be present in airports. Due to the sharp decline of air traffic, airport shops have lost between 75% and 85% of their turnover on average. I am still positive, I am sure we will recover: there are actually a few encouraging signs. But I think it will take five to ten years to reach the same results as in 2019. Our business segment is definitely capable of reacting increasingly faster when it comes to finding solutions and alternatives. We need to adjust.

Premium Beauty News - How?

David Dayan - We implemented solutions as soon as February 2020, such as the click&collect and call&collect options. Travellers can check on the Internet whether a product is available in our duty free stores, at the airport or in border shops in their destination countries. They only need to make an order on the phone or online. Then, before they fly or pass the border, they collect their shopping, which has been prepared and kept safe, and of course, they benefit from tax-free prices. We are also working with a few African governments to create specific collection points for duty free shopping upon arrival.

Premium Beauty News - What is at stake in terms of sales?

David Dayan - There are about ten operators around the world, the most well-known being Dufry, Heinemann and Lagardère, to name just a few. In airports, they take care of everything that is called “non-air” and purchase concessions over several years. Then, these concessions are turned into stores or restaurants. As an example, in Paris, in 2018, “non-air” revenues were higher than air revenues.

Asians were quick to understand the craze for duty free shopping in these stores. The Beijing airport spreads across 300,000 m2, including a 200,000 m2 area occupied by stores and restaurants. Likewise, governments have understood it is profitable to open downtown duty free stores for tourists. To give you a concrete example, a month ago, during the Golden Week on the duty free island of Sanya, in southern China, travellers bought for more than 1.2 billion USD in this type of store!

How come? First, there are no taxes. Secondly, consumers are sure the product is authentic – there are many counterfeit products on these markets. Then, foreign currencies are used. And lastly, with Travel Retail Exclusives, there are products or offers you can only find in airports or downtown duty free stores. Of course, the same goes for Africa.

Premium Beauty News - Precisely, how big is the Duty Free market in Africa?

David Dayan - Over the past ten years, many African countries have managed to develop and highlight their own specificities to attract tourists. Rwanda is an eco-destination, Tanzania and Mozambique focused on safaris, and Western Africa chose seaside tourism. The most prominent airlines started signing agreements with these countries, like Emirates Airlines, which now serves over 60 countries in Africa. Many African airports are equivalent to European airports in terms of infrastructures and service quality. They are often the most beautiful places to buy luxury products. Between 2018 and 2020, about 15 new airports were opened in Africa. Three quarters of them were built by Chinese companies, which triggered a flow of Asian tourists, whose share rose from 12% to 18% in ten years.

The brands that outsource distribution to Beauté Luxe – Puig, L’Oréal, including Lancôme and Yves Saint Laurent, Hermès, and many others – are guaranteed that their price, merchandising, and image guidelines will be complied with. But our role also consists in animating this network, choosing the best spots, creating attractive shop windows, making promotional offers, playing with podiums and exclusivities, and regularly visiting points of sale. This field work is done by our teams on a daily basis.

Premium Beauty News - Do you think the beauty market will do well on this continent?

David Dayan - African markets used to lag behind in many fields, but many countries managed to catch up. Wages increased by over 20% in Africa, and beauty is one of the largest items of expenditure for African women. The future is bright.