COVER STORY, ISSUE 65
Duty Free Philippines Chief Operating Officer Vicente Angala is set to institute significant changes, improvements and innovations to catapult Duty Free Philippines (DFP) into a world-class shopping destination.
“We are now turning the key to a pivotal time for Duty Free Philippines,” says Angala. “While Duty Free has undergone some changes in merchandise, we are pursuing some massive change not just in the physical look of Duty Free stores but in the operations and marketing, as well.”
Foremost in the agenda of change at DFP is branding and visibility. The Luxe Duty Free which was launched in the SM Mall of Asia complex late last year houses upscale and high-end products and brands. This luxe store is also pursuing to expand and accommodate more luxury brands and trend-setting products this year.
Two international airports are being eyed to soon house DFP outlets. These are the new Puerto Princesa International Airport which has a seating capacity of 15,000, and the Bohol–Panglao International Airport which is a gateway to the Central Philippines for international tourists.
“While the DFP management desires to open Duty Free outlets in practically all Philippine international airports, we are constrained by the limited ongoing international flights in some of these airports. With limited inbound flights, we may not be able sustain the operations of stores,” Angala revealed.
Based on the 2018 sales report, more than half of the total sales, which accounts for 53 percent, came from terminals 1, 2 and 3. Fiesta Mall contributed 33 percent, while provincial outlets’ combined sales made up 15 percent, with Cebu’s inclined sales from 7 to 10 percent.
“We are also present in Clark. With Clark’s booming industrial, commercial, business, tourism, aviation, education, leisure, gaming and entertainment industries, we might consider putting up another store in the downtown, as we also receive a lot of proposals,” Angala added.
DFP has also allotted a budget of Php27.2 million for the renovation of DFP Fiestamall located in in Paranaque City.
“We need to transform Fiestamall into a more contemporary setting, packed with upgraded and interactive amenities that families can enjoy while shopping. Improvements at Fiestamall includes well-curated displays of products, the setting up of a much improved food court and other food outlets, and the installation of lounges and other conveniences that would complete a one-of-a-kind shopping experience,” declares Angala.
Another area that we are set to innovate is the marketing of our goods. Adapting to the latest trends, the DFP has started to venture in online shopping.
“We are looking at ways to develop our online shopping to keep with today’s buying lifestyle. Through duty-freephilippines.ph, our balikbayans and foreign tourists will have easy access to a wide array of products and discounts. The taking away of the Concession Privilege Fee of 10% of the sales definitely makes online prices lower than those in the malls,” he further stated. In close coordination with the Bureau of Customs and Immigration, Phase 1 of the on-line shopping intervention is now operational, with Paypal and WeChat as payment channels.
Duty free shopping privilege is available 48 hours upon arrival of the foreign and Filipino international travellers; 7 days for OFWs and Balikbayans, and 365 days for the elderly within travellers. Easy, light and fast shopping is now being
The first phase upon order is to pick up the goods at the Airport. In the second phase, goods will be delivered to the intended beneficiary of the goods ordered by the shopper.
“We are almost done in the mechanics and operations of this new shopping mode. We are only waiting for the go-signal of some brands. Most local products find this new marketing venture exciting. Delivery is the key here. When one arrives at the airport, he is always in a hurry to go home to meet loved ones. The delivery will address that concern. This is something new for our OFWs. Challenges like accreditation of the buyer have been addressed, as our provider has already established link with the Bureau of Immigration on the travel status of a buyer. Even senior citizens who have a one-year privilege will be accommodated.”
Innovating Awareness Campaigns
The heyday of Duty Free Philippines many years back will have to be recovered. Information drive are being set in motion to promote Duty Free products and the array of privileges accorded to OFW, balikbayans and tourists.
“We are set to innovate and be more creative on the way we project the DFP brand and its products to the public and target markets. We are accessing the potent digital and mobile channels for informing, acquiring and retaining shoppers. In same manner as we desire to establish engagements with our markets and audiences effectively,” notes Angala.
The DFP management is set to make full use of online communication channels and targetted marketing strategies to gain new customers or build deeper relationships with existing ones.
“We need to touch base with, and get a good market share of the 2.3 Million OFWs. We also target to convince our Balikbayans of swinging to Duty Free stores while in the Philippines — invoking their sense of nationalism that for every item bought at Duty Free, they help in the alleviation of poverty and creation of jobs in the country, considering that part of DFP revenue goes to the development of the Philippines tourism industry which tops the country’s economic powerhouse.”
We are now trying to review our target market database, as we are seriously on track to grow this database as recipients of all our campaign efforts.
Awareness campaign – The buying crowd
Duty Free Fiestamall has long been synonymous with the Overseas Filipino Market to serve returning Filipinos an easy way to purchase “pasalubongs” or gifts for their loved ones. On the other hand, Luxe Duty Free has opened opportunities to serve the more discriminating Filipino traveler and the foreign tourists, mostly the Chinese market, many of them staying in the entertainment complexes at the MOA grounds.
DFPC is in the process of reviewing hotel partnerships, but in the case of Luxe Duty Free, it is already making arrangements with the different hotels in the MOA area. This store will be catering more to the Chinese so the categories are mostly fashion, perfumes, and cosmetics that are items in demand by the Chinese.
Angala disclosed that Luxe Duty Free is experiencing a good response with Chinese tourists so much so that they have bought a van to shuttle Chinese tourists to The Luxe.
“We are finalizing agreement with different hotels for pick-up arrangements.”
“Meanwhile, we have expanded our offerings specifically at Duty Free Luxe to appeal to the Chinese market. We carry the YSL, Coach, SKII, among others.
“We are exploring the market of casino goers in promoting our cigarettes and liquor,” he disclosed.
“We are coordinating with City of Dreams to put up a pop-up store where guests could place their orders through our shopping website. We’re looking at a reward system. Whatever points they will earn from COD, could be applied for their purchases at DFPC. To cater to a market of Asian shoppers, we will also hire Chinese-speaking personnel.”
“We target to implement this partnership by the second quarter of this year.”
The OFW mandate
Duty Free has always put the OFW (overseas Filipino workers) in mind, so most products are mostly imported and a number of merchandise is primed for Kabuhayan shopping, DFPC’s livelihood program for ensures OFWs and ‘balikbayans’ who plan to go into entrepreneurship a chance to avail of duty and tax-exempt purchase in the amount of USD2,000 exclusively for livelihood equipment, within 15 calendar days from the date of arrival and extended to 30 working days for those who come home from 15 November to 15 January.
The Kabuhayan program is a long-running project for OFWs to assist their families for a continuing livelihood program when the OFW retires or goes back overseas.
“This our way of helping our kababayans to use their hard-earned money to put up a business while they are working abroad or want to build they life anew when they decided to go home for good.
We are finalizing our partnership with TESDA in providing free trainings while they put up their business. Currently, we have pre-departure orientation through our partnership with POEA,
Marketing world-class local products
In line with the Department of Tourism (DOT) Secretary Berna Romulo-Puyat’s program of promoting local products, DFPC is in close coordination with DOT in adding homegrown products thru the Philippines Finest Kiosk while its partnership the Department of Trade and industry’s (DTI) is the Go Lokal program that has also steadily grown and expected to grow in the coming years.
“We support Secretary Bernadette Romulo-Puyat’s thrust to promote homegrown products. We made sure that we have a wide range of export-quality local products at our stores at the departure of NAIA terminals 1, 2, 3 and Mactan International Airport terminal 2. We see it as an opportunity to promote our local brands for their consumption abroad. We have partnered with DTI in putting up a Go Lokal store at Fiestamall and Duty Free Luxe.“
“We also want to help increase the income of small and medium-sized enterprises (SMEs) and local farmers. Currently, there are 54 existing Filipino brands available at the all DFPC stores. We will definitely add more to our selection including upcoming brands of fashion, furniture, and home merchandise,” he said.
The Duty Free Philippines advantage
Unlike in other countries that give you a refund of their GST at their airports upon departure, Duty Free already gives you the privilege upon purchase. With its continuing expansion of merchandise, shopping promises a competitive advantage.
Its top best sellers are chocolates and confectionaries at a total of 35% less, then liquor, spirits, perfume, and cosmetics, fashion, and supermarket goods. Suppliers of Sony, Samsung, Fujidenso, and Whirlpool offer 8-10% special discounts to OFWs, plus they do not have to go to the trouble of bringing it with them or incur expenses of sending it home.
“The sales of perfume and cosmetics have increased as we are definitely lower that the regular market price because we exclude the 12% VAT. We make sure to provide a wide range of options such as Korean skin care products.
Duty Free in the future
Angala disclosed several undertakings that will happen to DFPC this year:
- A plan to move their stores to serve most gates at the airport terminals.
- A move to amend the charter of DFPC to extend shopping privileges for tourists from 48-hour timeline to one week.
- A move to exempt DFPC from excise tax of cigarettes and liquor.
- Giving additional benefits to senior citizen through the “1st Sunday Senior Shopping Swing program” where seniors who have traveled will be given discounts as much as 10% at all DFPC outlets on regular items except liquor and cigarettes.
- DFPC is coordinating with CAAP on identify location for an outlet at the international airport of Palawan
- Update to its packaging style and make it more innovative and modern.
- Local goods to be more eclectic with the addition of non-consumables like furniture and handicrafts.
- Along with the renovation of the Food Court, the Fiestamall will have two coffee shops, one for each floor to assist shoppers, especially senior citizens.