The Chinese are coming
This column was originally published in DFNI*
It seems almost lazy to write about the importance of Chinese shoppers for any section of the duty free industry these days. You can hardly move for hearing about how Asia Pacific is driving growth, or the Chinese shoppers are the key to success in the current market.
But at a time when the tobacco industry is facing constant challenges, any glimpse of a potential money-maker cannot be missed out. Endless pages have been written about the Chinese desire for innovation and uniqueness in the market; brands are creating special editions and sense of place products to entice the booming number of travelling shoppers heading out of China.
The challenge for tobacco is slightly different; Oriental Trading General Operations & Marketing Manager Tania D’Souza recently told us about its new Oris China Orange Peel range, which aims to tap into a current flavour trend in the Chinese market. She also revealed the company’s Research & Development team are constantly looking to create new packages, flavours and products to keep shoppers on their toes.
The message here is clear: anyone who sees tobacco as a static market in which next generation products will suffice for innovation is slipping out of touch with what shoppers want.
But what of the Chinese passion for luxury items? Well, the tobacco market is not immune to that demand either. Last month, Habanos – the state-owned tobacco distributor which holds the monopoly on Cuban cigars – announced its financial results, with a record turnover of $537m.
Habanos Co-Presidents Inocente Núñez and Luis Sánchez-Harguindey Pardo de Vera cited the fact that sales of Cuban cigars continue to grow in different markets; it will come as a surprise to very few that China was second on the list of key markets, just behind Spain.
The development of smokeless and next-generation products is a long-term investment for tobacco companies planning for their future, but – as with the rest of the duty free market – China is the immediate opportunity. For those brands facing a barrage of challenges, but willing and able to create something which catches the eye, the Chinese could just be the answer.
*This article was originally published in DFNI magazine, during my tenure as Tobacco Editor there