Imex Pan Pacific targets US$100 million in sales - EXCLUSIVE
30 July 2003; Source: The Moodie Report
By Trevor Lloyd-Jones in Ho Chi Minh City
VIETNAM. As Imex Pan Pacific puts the finishing touches to its Ho Chi Minh City airport arrivals stores, the company says duty free in Vietnam is going into a high-growth phase.
After beating off competition from SUTL, Sriwani and Hong Kong-based Queensway duty free stores last year, Imex Pan Pacific (IPP) took over with an exclusive supply and management contract with airport owner SASCO (Southern Airport Services Co), as recently confirmed in The Moodie Report. The four companies had previously operated competing SASCO joint venture stores in the old area of the terminal, until the concessions expired on 31 May 2003.
Sales have doubled to US$2.5 million per month since January, according to IPP, and the sales area has quadrupled to over 1,500 sq m. “They [SASCO] made the right choice,” IPP president Johnathan Nguyen told The Moodie Report. “Imex Pan Pacific is not a big corporation and we can easily make decisions. Some of the other operators had problems. In Vietnam, when you do business you must be fast.
“In the planning for the new terminal, many things changed in the proposal and we helped SASCO very closely. That contributed to the preference we were given.”
Indeed, many operators have tried and failed in Vietnam. DFS Group had a supply and management contract with IPP seven years ago and another to supply Queensway. But tourism did not develop in the way DFS hoped and the company pulled out as part of its global rationalisation soon after.
The Vietnam branch of Hong Kong-company Sundance Trading held a concession for one Hanoi airport duty free store until four years ago, but now it only operates in the small Danang airport. Meanwhile, IPP has invested heavily in another Hanoi downtown duty free store, where it has a 100% supply and management contract with the operator Saigontourist. IPP also has cruiseship supply business, Vietnam Airlines duty free and inflight catering business, and the restaurant and slot machine concessions for Ho Chi Minh City airport.
IPP has invested US$1.5 million in fitting out the gleaming new Ho Chi Minh City airport departures stores and will open four new arrivals stores with a grand opening ceremony in August. In this area IPP will have a pre-order pick up counter, mainly for returning Vietnamese workers, a big electrical store selling household and electrical goods and three other stores for fragrances & cosmetics, liquor and tobacco, confectionery and gifts.
“Right now we are concentrating on the big brands and we are still looking for others such as Bvlgari, Gucci, Swarovski and Montblanc,” said Nguyen. “I would like to give thanks to those companies that supported me from the beginning, such as Hennessy, Japan Tobacco, Lancôme and Christian Dior. In return they have good exposure in the new terminal. All the brands that supported Vietnam from the early days are happy.”
Nguyen is expecting his sales to continue growing strongly following the ending of the SARS health scare, with October 2003 forecast to be up +20% and duty free sales in Vietnam to reach US$100 million within the next two years as the rising number of tourists - forecast at 5 million by 2008 - responds to the growing product range.
“That is why we are rushing to complete construction,” said Nguyen. “This year is a good year for us and a good year for Vietnam. My message is come to Vietnam and see for yourself.”
*Look out on our home page for The Moodie Report interview with IPP president Johnathan Nguyen, coming soon.