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Hamila Duty Free
November 2006
MEDFA OFFICIAL GUIDE 2006
Hamila’s multi-channel
strategy pays rich dividends
Hitting new heights: Hamila's expansion is focused on four key
markets: Tunisia, Morocco, Algeria and Libya (Tunis pictured)
With sales growth of between +15% and +18% forecast for 2006, the growth strategy of retailer
and distributor Société Hamila pour le Commerce et l’Industrie (Hamila Duty Free) is paying off
handsomely. It’s a broad-based strategy, involving multiple retail sales channels in four key
countries, as Chairman and CEO Tarek Hamila explains.
nflight sales, port shops, ferry stores, shipchandling,
diplomatic stores, product distribution: Société Hamila
pour le Commerce et l’Industrie (Hamila Duty Free) has
made its name across a bewildering range of duty free activities in Tunisia, Morocco, Algeria and Libya. But for
Chairman and CEO Tarek Hamila, this is just the beginning
of a North African power play that will take in new retail
businesses – and, crucially, expand the company’s distribution business to new product categories.
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The distribution angle is key. Since 1998 Hamila has distributed Philip Morris cigarettes in several key North
African markets, including Morocco. But the company isn’t
content to rely on tobacco distribution alone. “We want to
extend our duty free distribution activities to other product
categories, in particular fragrances and cosmetics,” says
Hamila. “It’s a market that is growing, and as a local company with good infrastructure we know we can do it well.
It’s a big focus for us.”
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The company’s distribution arm is also a springboard for
entering new markets. International Business Development
Director Karim Mahjoub, who oversees the group’s
Moroccan business, takes up the story. “We initially created
a company to distribute Philip Morris cigarettes, but having entered the market as a distributor to retailers, we now
want to become a retailer too,” he says. “We are about to
start shipchandling operations in Agadir and Tangiers, and
there are many opportunities there, especially in the maritime sector.”
The maritime business – whether operating port shops or
ferry outlets – is a focus for Hamila’s development. “We are
approaching maritime companies of all kinds, to show them
why they should go with us,” says Hamila, “and that applies
to Algeria and Libya too.” Although those markets are not
yet mature tourist markets, they are very much development
markets for the company. Hamila begins a concession
contract with Libyan carrier Afriqiyah Airways in January
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Hamila Duty Free
November 2006
MEDFA OFFICIAL GUIDE 2006
Tarek Hamila (left) and
Karim Mahjoub: Driving
Hamila Duty Free’s
ambitious growth
2007, more than a year after winning the business. Tripolibased Afriqiyah is Libya’s second-largest airline.
“They have four planes,” says Hamila, “but they are becoming an important carrier linking Africa to Europe, through
Libya. It’s an attraction for passengers who don’t have direct
connections through their own countries.”
Diplomatic expansion
But expansion into these emerging markets isn’t confined to
inflight or maritime retail. The diplomatic business will be
a major target for Hamila in future.
“We have the exclusive rights to
supply Tunisian embassies overseas,
as well as the diplomatic shop in
Tunis,” says Hamila. “That is the
‘base camp’ for our expansion into
new diplomatic markets.
“We have almost completed a new
7,000sq m head office in Tunis,
which includes a 2,000sq m showroom, plus a 3,000sq m warehouse.
Once these projects are completed
we’ll begin to invest heavily in new
channels beyond our Tunisian base,
and diplomatic business will be at
the heart of that drive.”
That comes as little surprise. When
the Hamila Duty Free business
began trading in 1983 its first shop
was a diplomatic shop on the outskirts of Tunis. And it has come a
long way since then.
In 2003 Hamila Duty Free was awarded the duty free
licences for airlines Tunisair, Nouvelair and Karthago, bolstering the company’s influence in its home market. It now
services over 50 aircraft with duty free goods.
Whatever its ambitions beyond Tunisia’s borders, Hamila’s
home base is the market that still drives growth today.
“Tourism is expanding by +10–15% a year, and we have benefited from relative peace and stability in recent years,” says
Hamila. “The Mediterranean is a
very interesting region in the
world. It hasn’t had the huge
growth rates of the major Middle
East markets, but it is stable and a
good basis for the business in the
long term.”
We are forecasting
sales growth of
+15% to +18% this
year as passenger
numbers and
spends rise
That diplomatic shop served as a springboard into the travel
sector when Hamila Duty Free became concessionaire to
national ferry company Compagnie Tunisienne de Navigation (CTN) and to the office of the merchant maritime and
ports. After opening in the main Tunisian port of La
Goulette the company began to sell its goods aboard the
CTN car ferries and became the company’s official
shipchandler. That franchise provided the company with
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access to all Tunisian ports, a status it still enjoys today.
Tunisia also retains its ‘pure’ duty
free status, meaning Hamila can
compete head-on with many retailers in nearby EU countries.
Tobacco is the backbone of the
business, representing 50% of sales.
Because tobacco on the domestic
market is purchased through the
government it is subject to heavy
duties, making duty free’s price
proposition attractive to consumers. Of the other main categories, fragrances and cosmetics
account for 20% of company sales,
with liquor at 15%.
Hamila says the company is on target to hit, and even surpass, its +15% forecast for sales growth in 2006. “We are forecasting growth of +15% to +18% this year,” he says, “as
passenger numbers increase and spend per head rises.
“Every year we are learning more about our clients, and gaining a better understanding of what we should put in front
of our consumers. The long-term future is very bright.” I
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