June 1 2021  |  Retailers

Jaidee Duty Free tackles challenges head on

By Hibah Noor

Jaidee Duty Free offers the core travel retail categories, with top sellers including brown spirits and red wines

For decades, Thailand has been an important country for travel — both tourism and trade. As Lukas Coates, Managing Partner, Jaidee Duty Free, says: “The Mekong River has provided life, commerce, trade and industry throughout Indochina for thousands of years. Movement of goods and people are vital to the sustainability of the region.” This river acts as the border between many countries.

Jaidee Duty Free has stores on three Thailand borders: Thailand-Laos, Thailand-Cambodia and Thailand-Myanmar. Coates says: “Every location has a slightly different environment, but with two common themes — the Mekong River and high humidity!”

Jaidee Duty Free is a small organization made up of American, Burmese, Laos and Thai nationals. “My partner, Ms Pannipa Kwandumnern, remains instrumental in our progress and development. Our staff are young, passionate and knowledgeable in a way that transcends cultures. This allows us to keep our eyes open and ears to the ground along the Mekong River Region,” he explains.

In early 2019, Coates saw the opportunity to independently own and operate duty free stores in Thailand. The opportunity was “not to be passed up,” he says. “By the end of 2019, I was opening my first duty free store and the rest, as we say, is history.”

Demographics

The store’s shoppers consist of international tourists, day trippers and foreign workers from around the region, including many truck drivers, according to Coates. The customer base is primarily made up of Burmese, Cambodian, Laos and Thai nationals, though tourists from other regions also shop there. As these stores opened just before the pandemic began, one would assume international travel in the region will once again increase the stores’ international tourist shoppers in kind. “We have large pockets of Chinese nationals and westerners at various times when the borders are fully open,” confirms Coates.

There is no age-specificity to shoppers, as Coates says age demographics are wide ranging. Most customers are traveling in groups and there is a higher proportion of women than men. Shoppers buy for themselves and also for friends and family members, as Jaidee Duty Free is the exclusive retailer for certain wine and spirits items.

Category mix

Coates says the stores’ product mix focuses on core categories, with an emphasis toward local preferences. “Any customer who chooses to patron Jaidee Duty Free will have a unique experience when entering our stores,” he states. “The stores, which are similar in design, feel and layout, are complemented with a smiling and friendly sales staff that adds value to a product range consisting of imported and local items that are deeply appreciatedby all.”

Wine and spirits are the top-selling categories in Jaidee Duty Free stores, with a particular emphasis on brown spirits and red wines. In brown spirits the emphasis is on blended Scotch and single malt whisky, American whiskey and brandy. The red wines that are most popular are Cabernet Sauvignon, Merlot and red blends that originate in Australia, Chile, South Africa and the USA.

Challenges ahead

Travel retail is an industry continuously affected by external forces, and as with virtually everyone within the channel, Coates’ expectations for 2021 are conservative. “Our business partners remain positive and supportive,” he says. “We continue to face challenges and difficulties every day — because of COVID-19, yes, but also because of political and social unrest or other factors such as exchange rates.”

With borders remaining closed, of course Jaidee Duty Free has experienced the resultant drop in sales, but Coates says, “Like anything in life, this is temporary. Navigating through the remaining 2021, we will need a strong combination of support between our brand partners and industry colleagues in addition to commitment from government entities to return to normal.”

Coates adds the keys to focus on over the coming months are to strengthen relationships with existing business partners, work together with government authorities and keep an open mind toward new opportunities, while facing current challenges head on. “This will influence how Jaidee Duty Free progresses through 2021 and beyond,” he concludes.

The three Jaidee Duty Free stores — similar in design, feel and layout — are complemented with a smiling and friendly sales staff

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