The Shoppers of Babel
Inside the most lucrative and perhaps most sophisticated duty-free shop on Earth.
We live in a world of global brands but local tastes. Arabs tend to drink their tea slowly; Indians load theirs with spices and sugar. So Lipton ships a different optimized formula to each, under its standard yellow label. The Earth may seem united by loyalty to Coca-Cola, but Coke famously tailors sweetness to different regions. The world of consumption is still a Balkanized place.
If you want to see these divergent proclivities in all their finely segmented glory, spend some time at the Dubai International Airport. The world’s third busiest air hub, Dubai boasts the most lucrative and perhaps most sophisticated duty-free shop on Earth. Its total retail space is more than one and a half times the size of Saint Peter’s Basilica in Rome, and its sales reached $1.6 billion in 2012. With its constantly circulating clientele, Dubai Duty Free is the global retail market collapsed into a few sleek airport terminals.
Dubai Duty Free hangs its name on luxury goods, but two of the retailer’s biggest selling items are Nestlé powdered milk and Tang.
THE GOLD NONSTANDARD
One of Dubai Duty Free’s biggest sellers is gold. Finely worked 18-karat necklaces and bracelets gleam in the retailer’s display cases, meant to lure Europeans, East Asians, and Americans. But Indians—the world’s largest consumers of the metal—disdain the 18-karat kind. At Dubai Duty Free, they pretty much exclusively buy 22-karat gold, often in the form of bricks.
NOT BLING, BUT TANG
Dubai Duty Free hangs its name on luxury goods, but two of the retailer’s biggest selling items are Nestlé powdered milk and Tang, the orange drink mix. How big? In 2012, the airport sold 1,417 metric tons of Tang. The two powdered mixes are sold mostly to South Asian laborers flying home from Persian Gulf work sites.
THE CHINA SYNDROME
Chinese travelers make up just four percent of the Dubai airport’s total traffic, but 12 percent of Dubai Duty Free’s sales. That’s because luxury products like high-end liquor, watches, and perfumes are still relatively expensive in China. In response, Dubai Duty Free has recruited 573 Chinese salespeople, dispensed Chinese phrase books to everyone else, and started accepting China’s most popular credit card.
On a special first-class-only floor in the airport, Dubai Duty Free markets a $200,000 bottle of whiskey called Royal Salute Tribute to Honor. The bottles don’t exactly fly off the shelves, but the liquor creates a “halo effect” for the shop: business elites are more likely to break out their wallets in the presence of aspirational goods.
Americans love Hershey’s chocolate, but most of the rest of the world finds it horrid. Nonetheless, the airport retailer markets Hershey’s in large displays, even though few Americans pass through Dubai. Why? According to journalist Kristoffer Garin, the target audience is Filipinos; they developed a taste for the stuff under American occupation in the early 20th century.