China’s Century Conference Daily Round up

 

 
 
The second day of the TFWA China’s Century conference started with a look at the dramatic rise in entrepreneurship over the past 20 years.  Dr Edward Tse, author of China’s Disruptors, dispelled the common belief that China is dominated by state owned enterprises commenting that over the past 17 years non-state organizations have grown considerably faster in both revenue and profit. Successful entrepreneurs build business by focusing beyond core competencies and use technology to tailor products to the individual.
 
Giving the perspective of an airline, Li Jianhua, President and CEO of China Southern Airlines (CS) commented on the extensive plans for growth of Asia’s biggest airline and the potential for inflight duty free sales.  With 200 international routes, the airline has plans to expand its inflight duty free shops to every international flight.  Li encouraged retailers to work with CS to offer luxury brands and to train cabin crew.  In return, CS has an extensive CRM database through the 30 million members of its loyalty program and is introducing a new interactive multi level platform tailoring duty free services to the passenger. 
 
Giving an overview of Guangzhou, Tourism Administration Director General Lui Yumei described the cities 1000 years of history calling it ‘an international metropolis full of vitality’.  Not only is it the third largest city in China, but it is also the third most popular city for cruises. Chen Shangjun, Deputy Director of the Investment Promotional Bureau of Guangzhou Aerotropolis Development District proudly described the moment in 2004 when Guangzhou relocated its airport overnight and became ‘an airport like others’.  With plans to cater for 80 million passengers by 2020 he added that the airport would undergo a major transformation over the next five years, becoming an ‘Aerotropolis’.  
 
Sunil Tuli, Managing Director of King Power Group (Hong Kong), concluded the morning session with a thoughtful analysis of how companies can succeed in this era of disrupters.  He talked about the constant evolution of the Chinese consumer and the importance of correctly identifying the challenges. Tuli added that airports need to be more flexible in their renting structure as increased footfall no longer guarantees increased duty free sales.  He concluded by detailing the increasing integration of online and offline commerce with stores such as Amazon opening bricks and mortar stores and Starbucks offering a mobile ordering system. 
 
The afternoon program began with a look at the growth of tourism in China.  Dr Dai Bin, President of the China Tourism Academy said that the Chinese were seen as ‘walking money’ overseas, but that they are not such ‘crazy shoppers’ anymore.  Now they look for travel with depth.  With tourism a key pillar in China’s five year plan, the government are looking at initiatives to encourage inbound tourism such as the 72 hour visa waiver program already available in key cities and the expansion of duty free stores in tier 2 and 3 cities.  
 
Bin commented on the potential of cruise tourism, which was the theme for the next two speakers.  Michael Feely, VP Horizon Consumer Science, shared the initial results of a TFWA sponsored study into the cruise market in East Asia.  If Asian cruising maintains its growth trajectory, it will be the number two cruise region by 2020.  The potential for the duty free retailer, with a captive audience on board, is enormous yet from the qualitative research undertaken Feely feels that this is far from being realized.  Jared Lee, VP Management & Guest Services Asia Pacific and China for Costa Cruises, agreed and commented that the retail model on cruise ships needs to change and evolve to incorporate retail as a key part of the cruise experience.  
 
The final two presenters talked about technology going forward.  Han Tao, General Manager of Xiamen Airport’s Shouli E-Commerce Co, described how his company has facilitated online sales alongside its duty free shop and adapted over time as consumers’ expectations have changed.  It is all about ‘finding the best connection between online and offline commerce.’  Entrepreneur, Alvin Wang Gralyin talked persuasively about virtual reality as th next big disrupter.  He urged companies to explore and work with the new technology if they want to stay on competitive.  
 
 
Erik Juul-Mortensen, TFWA President, thanked the two moderators, John Rimmer and Trevor Lai, and the sponsors.  He concluded that: “Our industry must be agile to capitalize on the significant opportunities that are out there, embrace change in all areas and make sure companies are equipped for change.”