BW Confidential - Issue #16 - November/December 2013 - (Page 102)

Travel retail Channel analysis Shape shifters Asia continues to be the engine for growth as skincare shines, accompanied by classics and premium brands by Tina Milton L ast year, the global duty-free and travel-retail beauty sector was a picture of health, despite some sluggish areas. Preliminary global dutyfree and travel-retail sales data for 2012 from specialist industry research company Generation Research, Sweden, indicated that the fragrances and cosmetics category grew by 7.6% to $15.36bn compared to the previous year. While this was a shade ahead of the overall product group rate, which was up 7.5% to $49.44bn, growth levels were considerably lower than the year-on-year rates of 2011, when beauty increased by 17% over 2010 and total product group sales rose by 17.9%. Nevertheless, beauty still accounted for the biggest piece of the product pie in the sector, holding a 31.1% share. Although the picture worldwide was comparatively strong, regionally, figures were rather mixed. Asia Pacific continued to dominate as the biggest beauty market, with sales up 18.8% to $5.75bn, still below the 22.8% increase seen in 2011 over the previous year. However, in Europe, the second largest region for beauty, sales were down by 1.8% to $5.4bn in 2012, as economic malaise continued and passenger numbers at EU airports stagnated. In third position, the Americas logged a 4.9% rise to $3.08bn, followed by a strong performance in the Middle East, up 13.1% to $882.2m, and Africa, with an increase of 13.9% to $239.7m. Skincare still strong For travel retailer DFS Group, beauty had a solid year in 2012, driven by north Asian customers with a strong demand for skincare, a category that continues to outperform this year. Vice president and gmm beauty Linda Allario explains: “Value remains a key driver for beauty in travel retail for all nationalities in 2013 and a strengthening yen has impacted sales 102 s The Shilla’s (top) beauty’s sales are growing, thanks primarily to Chinese travelers, while the opening of concourse A at Dubai International (bottom) has given a boost to Dubai Duty Free to Japanese customers. Skincare is still the star, while the classics and products at the high-end are attracting strong demand. Fragrances also performed well and ahead of recent years.” DFS has undertaken significant airport upgrades and renovations this year, including initiatives at Los Angeles International airport (LAX), Tom Bradley International Terminal (TBIT), John F Kennedy airport T4 and Hong Kong International airport, which has impacted sales. The company is experiencing strong sales growth and foresees a healthy second-half performance, during which DFS’ Beauty Concierge service will be deployed in Hong Kong and the TBIT at LAX. November-December 2013 - N°16 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #16 - November/December 2013

Cover
Comment
Contents
Update
Brand & retail news recap
Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Coty ceo Michele Scannavini
Insight: Fragrance
Category overview
Regional breakdown
Launch strategies
The niche market
Retailer initiatives
Launch roundup
Strategy M&A analysis
Retail
The store of the future
Creative strategies
Store concepts
Digital Innovation strategies
Market watch: Brazil
Country overview
Natura & Grupo Boticário
International brand strategies
Prestige retailing
Trendwatch Upcoming innovation
Travel retail
Channel analysis
The CIVETs
Digital strategies
Interview: L’Oréal Luxe md travel retail worldwide Barbara Lavernos
Interview: WDFG global head of beauty Antonin Carreau
Radar Up-and-coming brands
Emerging markets Company profile: Shanghai Jahwa
Packaging
Luxury packs in the BRICs
Luxury innovations
Industry viewpoint
Last word Euromonitor International senior analyst beauty and personal care Oru Mohiuddin

BW Confidential - Issue #16 - November/December 2013