The Middle East is redefining the global travel retail landscape, moving far beyond transactional sales to prioritise high-impact consumer experiences, TTN has learned in conversation with Beste Ermaner, Vice President of Global Travel Retail at Philip Morris International (PMI) since March 2024.
“Airports in the GCC are setting worldwide trends and the complex duty-free environment is rapidly evolving into a high-tech arena,” Ermaner tells TTN, going on to confirm that the Middle East is “one of PMI’s most critical regions” within the global travel retail context.
In the past, it was more about the deal price advantage. Now, experience is the number one driver to visit a duty-free shop
- Beste Ermaner
She asserts that the region is the originating hub for experience-driven behaviour among legal-age nicotine users, setting trends that the rest of the world follows.
"In the past, it was more about the deal price advantage," she explains. "Now, experience is the number one driver to visit a duty-free shop." She highlighted that airports in Dubai, Doha and Abu Dhabi are consistently trend-setters, where brands in all categories present themselves in a unique and impactful manner.
This focus on experience is mandatory in the region. "In Middle East, you have no luxury not to deliver experience. It’s like the entry ticket for the whole global travel retail industry," she notes.
Ermaner, who has been with PMI for the better part of 25 years, manages a sprawling global portfolio, encompassing 166 markets and seven different trade channels. While airports are the biggest component, the business is far more comprehensive, including border businesses, ship chandling (cargo ships/vessels), cruises and ferries, airlines and military and diplomatic channels.
This multifaceted nature makes the business quite complex, requiring totally different adult consumer profiles, portfolio strategies and commercial strategies for each channel.
Travel retail offers inherent advantages over domestic markets that companies like PMI are leveraging. Duty-free areas offer products much more space to showcase their offerings effectively. International travellers (legal-age nicotine users) typically have at least two hours during which they are open to interaction, more inclined to learn about products. Also, they are already in the mindset of exploring brands and limited editions in all categories.
The Middle East is a real growth driver in terms of infrastructure investment, number of passengers and consumer trends. Al Maktoum International, for instance, is set to become the world's number one airport with a capacity of 260 million passengers.
AI is a strategic imperative used to enhance adult consumer experience. Airports are already leveraging biometrics to give passengers more time to shop and relax by making processes like border controls less burdensome.
For PMI, AI could play a critical role in delivering a best-in-class retail environment that meets the preferences of all adult nicotine users and provides essential information, supporting them in discovering better options.
Ermaner highlights the immense investment PMI has made since 2008 in innovations, stating the company is now essentially a technology-driven enterprise.
The need for strong partnerships with local operators and stakeholders is essential, particularly for communicating the company's smoke-free future vision to regulators and policy makers. Ermaner affirms that relationships and local partners support are critical to advancing the awareness of PMI’s smoke-free vision across the region.