May 13 2024  |  Industry News

APTRA President Sunil Tuli calls for innovation & partnership

By Hibah Noor

APTRA President Sunil Tuli says big changes are coming in Asia-Pacific travel retail, with a youthful population and now two regional powerhouses to foster competitiveness and drive growth 

Sunil Tuli, President of the Asia Pacific Travel Retail Association (APTRA) and Group Chief Executive of King Power Group Hong Kong, addressed the TFWA Asia Pacific Conference 2024 with not just ceremonial pleasantries but with a powerful vision for the future.

Asia’s complex diversity

Tuli began his address by challenging the monolithic view of Asia. “There is no such thing as one single Asia,” he declared, pointing out the vast economic and cultural differences that span from Japan and Singapore to emerging markets like Vietnam and Indonesia. He emphasized the region’s unique position, experiencing the world’s largest surge in youth demographics against the backdrop of aging populations in more mature economies.

The younger market is looking for an experience, for what is new and different. “Ignore it at our peril,” Tuli said.

Youthful vigor

Tuli addressed the critical role of the rising young populations in Asia’s emerging economies, highlighting nations like India, Indonesia and the Philippines. These countries are witnessing a demographic dividend, where a large portion of the population is entering the workforce, leading to increased economic activity and consumer spending. This youthful demographic is not only tech-savvy but also shows a keen interest in travel and experiential spending, which is reshaping the travel retail landscape. Tuli emphasized the importance of engaging of these younger consumers, as travel is increasingly important to them, with 84% prioritizing travel in their budgeting.

Aging out

Conversely, Tuli highlighted the challenges posed by aging populations in more mature Asian economies such as Japan, South Korea and Singapore. These countries face population declines due to low birth rates and high life expectancy, among other reasons, which have significant implications for consumer markets, including travel retail. In Singapore, the government has introduced measures like baby bonuses and tax exemptions to encourage higher birth rates.

Economically attractive

Despite the recent global economic downturns, Tuli highlighted the resilience and potential for growth within the Asia Pacific region. He detailed the strong regional connections and high levels of foreign investment flowing into Southeast Asia, with especially significant contributions to Thailand and Vietnam. These investments, often arising from neighboring countries, are a testament to the region’s attractive market dynamics.

Partners drive success

Tuli expressed thanks to the event partners at the APTRA India Conference in March, reminding his audience that partnership drives success.

“In a branded industry, suppliers play an important role in shaping industry success. They are obsessive about understanding their consumers across all channels – e-commerce, domestic and travel retail,” he said. “Let’s ensure they have the freedom to influence, with a strategy that isn’t predicated on only price.”

Tuli said the role of airports and retailers is to create beautiful retail environments that let brands shine. “We need to partner on head-turning experiences that make travel exciting and become as much a special part of the holiday as a spectacular sunset.”

Advocacy and support

Tuli detailed APTRA's strategic focus on advocacy and its crucial role in helping to safeguard the travel retail industry from restrictive domestic policies that could impede its growth. He highlighted the association's proactive stance in ensuring that government bodies are well informed about the unique dynamics of travel retail, vital for fostering a regulatory environment that supports industry growth and protects consumer interests.

APTRA has already established specific focus groups dedicated to alcohol and tobacco, and will extend these efforts to confectionery. These groups play a pivotal role in monitoring legislative developments, sharing industry insights, and making governmental representations as needed.

A recent priority has been to defend the travel retail industry against overregulation that risks empowering unscrupulous retailers and harming consumer interests. Tuli stated that such malpractices “categorically" do not occur in our industry.

He also touched upon recent global regulatory trends, such as New Zealand’s leading efforts to end tobacco sales, a subject with increasing scrutiny in Hong Kong and Malaysia. Other critical issues include the imposition of health warnings on alcohol and sugary products and the implementation of track and trace systems to ensure product authenticity.

Economic impact

APTRA is engaging with governments in India and South Korea to enhance the allowances brought into these countries by travelers, emphasizing the broader economic benefits of such measures, rather than just their advantages to the travel retail channel. “It is wise to demonstrate the broader market value for government rather than simply state it will benefit us in travel retail,” Tuli said.

He noted that APTRA plans to release a new economic impact report, which aims to quantify the industry’s contributions in terms of tax revenues, aviation infrastructure and employment, providing a solid foundation for future advocacy efforts. Funding for these and all initiatives comes from APTRA memberships and a new focus on insightful events such as the India Conference, which was a great success.

Through these efforts, APTRA continues to champion the causes of the travel retail industry, ensuring it remains robust, compliant, and aligned with global best practices while advocating for policies that acknowledge its substantial contributions to regional economies.

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