In 2013, you captured nearly 50% of departing passengers as customers, what makes Dubai Duty Free different?
Unlike most airports, duty free here is owned by the government. The airport is also owned by the government, meaning we get an opportunity when something is happening to have a say in where the retail operations will be placed. We are there right at the beginning, and together we agree on the positioning of the shops. Firstly, we think the location is important. Secondly, the airport is efficient and passenger movement is quick and speedy. We have passengers with us for a long time. Finally, we have an excellent operation. I think we offer value for money and a good range of products. We probably have the best team of staff in the duty-free industry, and spend a higher percentage than any other duty-free operation in the world marketing ourselves. We have many ongoing promotions and a lot of media coverage. The short answer to the question is our marketing, the quality of staff, the value of our product, and our position in the airport.
How important are international sporting events for your promotion?
I think it is very important, and there was an effort made many years ago to make Dubai the sports capital of the Middle East. And, to a large extent, that has happened. If you take the Dubai Duty Free Tennis Championship, it has now been going for 22 years and Roger Federer has won it six times while Venus Williams won her third title in Dubai this year. Roger is a fantastic ambassador for tennis and, in turn, Dubai Duty Free. We promote our tennis a lot; we are a global sponsor of women in tennis through the WTA. According to our researchers, the value each year of the media coverage that our tennis tournaments have generated was in excess of $718 million. Now, if we sat down as an operation and said let us spend $718 million on advertising, you just could not do it. Whilst we run our tournament, perhaps on a break-even basis from a cost point of view, but get back that media coverage in excess of $718 million, then it is a good deal for us. Recently, we had the World Cup Horse Racing here in Dubai, which has the biggest prize fund in the world of $27 million. The media coverage coming back from that is fantastic. The return on investment for an event like that is huge and there are several other events that are similar, such as the Emirates Rugby Sevens.
What products are you seeing the most demand for?
Our largest single category is perfume and cosmetics; it accounts for in excess of 20% of our business. Then, there are unusual trends here in Dubai, unlike other parts of the world; for example, gold is about 8% or 9% of our business. Alcohol and tobacco are still very important, and in our case alcohol represents around 12% of our business, while cigarettes and tobacco take up 9% or 10%. We have a shop selling sunglasses, and it has a nice space but only represents around 1.5% of our business. We wonder if it is worth having that? But 1.5% of our business is a large figure, so it is of course worth having it. A category that has grown considerably in the duty free industry over the past 10 years is confectionery. In Dubai, for example, we sell 1,000 tons of Toblerone chocolate every year. Many other categories are growing as well, we now have a lot of Chinese travelers coming through. Although they account for just 4% of the traffic through Dubai International Airport, they make up 16% of Dubai Duty Free's business. We have tailored our operation to suit that, and we now have 570 Chinese staff working for us. Meaning we have plenty of Chinese language speakers on the shop floor. We have dual signage on the floor, and we have signs in Mandarin. We recognize important events, such as Chinese New Year in January and we have special displays for that. We have attempted to identify the many products that these people want, we promote them a bit more, and we give them special displays. This has to happen or your business will not continue to grow. Our total sales in 2013 were $1.8 billion, we sold 78 million pieces of merchandise, and we did 26 million transactions on our registers. We have a reputation for being a good company to work for, and we received, without advertising, 81,500 CVs in the entire company in 2013 from people looking for jobs.
How do you cultivate a corporate culture to improve staff quality?
When we started duty free in 1993, we had 100 staff, and we are now 30 years old and we still have 40 of those original staff working for us. Our staff turnover in Duty Free is just 6.3% annually. Several companies in Dubai have a staff turnover in excess of 30% per year. We introduced a policy many years ago of internal promotion. We have not recruited a single senior person into Dubai Duty Free for 14 years, and all our managers and duty managers, as well as many senior people, are from within our staff. We provide training programs for those that start with us as shop floor sales people, porters, and clerks, who have now become duty managers, supervisors, and senior supervisors. This policy has worked very well for us. We do not terminate or fire staff unless they steal. If someone is under performing, we try to re-train them. We have a dedicated training department within our HR department; we do several hundred training programs every year.