CHINA REPORT: CHINA DUTY FREE GROUP
CDFG pointed out that the company already operates eight arrivals duty free stores in China and ‘will continue to occupy more market share of the arrivals DF business at large Chinese airports in the future’.
TRBusiness
its new duty free tender, covering the departure and arrivals shops in Terminals 2 and 3. Whilst CDFG keeps one eye on
Beijing, additional potential business opportunities for the company have emerged with China’s Ministry of Finance approving applications for
16 new duty free airport and land border arrivals shops in locations across the country. Arrivals shops are popular with
returning overseas Chinese travellers and these new operator licenses will certainly rank highly on CDFG’s new senior management team agenda when they are bid this year. [Under the Ministry of Finance’s
recently-announced regulations, all of these new duty free arrival shop licences are scheduled to be tendered and awarded by the end of April 2017-Ed]. China Duty Free Group is
understood to be preparing bids for many of these shops right now, as one of four state-backed enterprises that have qualified to bid for the licenses. The other contenders include
China National Service Corporation for Chinese Personnel Working Abroad (CNSC), Shenzhen Duty Free and Zhuhai Duty Free. In the meantime, China Duty Free
remains the mainland’s largest and most diverse duty free operator in terms of outlets. Haitang Bay on Hainan Island is
one of China Duty Free’s fastest- growing locations.
China Duty Free Group President, Charles Chen was appointed last December, just three months after Charn Chen Lee left LTR to become COO of CDFG.
Big allowance boost This is expected to grow even more with the recent doubling of Mainland shoppers’ duty free allowances,
China Duty Free Group confirms $42m Golden Week Sanya sales
At March’s China’s Century Conference in Guangzhou, China Duty Free Group (CDFG) President Charles Chen said that during Chinese New Year Golden Week (2017), CDFG’s Sanya International Duty Free Shopping Complex generated RMB 290m ($42m) in sales – 6% year-on-year. As Charlotte Turner reports, a
company statement added that during
CNY’s Golden Week this year, the city of Sanya received 957,300 tourists, up +14.07% year-on-year as tourism revenue grew 19.6% yoy to RMB 9.064bn. The Sanya complex registered more
than 250,000 customers, up 26% yoy. Chen added that CDFG’s new online
shopping platform will also provide the ‘best channel for brands to enter e-commerce in China’ and the world’s biggest Internet user market of 720m. However, Chen also made it clear that
CDFG confirms that its Sanya store took a total of $42m in sales in Golden Week.
82 TRBUSINESS
local brands remain important and using ‘big data’ analysis of consumption, CDFG has introduced new brands favoured by Chinese consumers. It has also delisted poorly performing brands aimed at this nationality of consumers. Chen’s presentation also highlighted and detailed the changes that have
taken place in the Chinese luxury market in recent years and 2016 in particular, referring to the government-promoted ‘consumption backflow’ in China. Returning to the theme of his
presentation, ‘Embracing change and unblocking potential’, Chen revealed CDFG’s own ambitions, making clear that the company is interested in entering other markets outside of China should the opportunities arise (the company already operates in Cambodia). Regarding the opportunities posed
by the government’s issuing of new arrivals licenses, CDFG pointed out that the company already operates eight arrivals duty free stores in China and ‘will continue to occupy more market share of the arrivals DF business at large Chinese airports in the future’.
MAY 2017
signalling a potential doubling of the huge downtown store’s future sales. Sales are also likely to increase
following the new joint venture opportunity with Hainan Duty Free, whose HNA Airport Group is keen to develop major travel retail and tourism ventures in Hainan. Commenting on this development,
a CDF source added: “Our Haitang Bay store is doing very good. We have built a joint venture with Hainan Duty Free Group. In future we can do a lot in Hainan, but we have just established a joint venture for duty free – it’s up to government policy.” China Duty Free has also been
renovating and upgrading duty free stores in several locations during the past year, as many of the country’s leading airports construct new passenger terminals and reconfigure their existing facilities to increase passenger handling capacity. Guangzhou Baiyun International
Airport is one example (China’s third- largest airport in passenger numbers), where CDF has just completed a two-year programme. This involved moving some shops
to new locations and renovations in line with the expansion of the facility’s Terminal 1 international passenger handling capacity. «
Read more about CDFG’s new developments at
TRBusiness.com
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