TOP 5 ASIA OPERATORS: SUNRISE DUTY FREE Sunrise and CDFG create huge duty free force
China Duty Free Group’s acquisition of a 51% share in travel retail rival Sunrise Duty Free has created a new duty free powerhouse. Andrew Pentol reports.
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he ‘merger’ of China Duty Free Group (CDFG) and Sunrise Duty Free last year,
following CDFG’s 51% acquisition [as reported by TRBusiness, CDFG parent company China International Travel Service Corporation is believed to have purchased the share from the Boyu Capital company) is creating a huge duty free force. News of the acquisition was
exclusively revealed by TRBusiness. The agreement covers all three Beijing and Shanghai Airports, CDFG’s 230-strong border store network, airport outlets, huge Sanya downtown store and small overseas duty free business in Cambodia. In 2016, TRBusiness estimated
that CDFG generated sales of $1.45bn. Sunrise for its part was also estimated to have registered sales of $1.6bn in 2015. [Figures based on Top 10 International Operators Report]. Following news of the acquisition,
it wasn’t long before CDFG and its Sunrise Duty Free (China) co., Ltd subsidiary had something to celebrate.
Beijing tender triumph Just over three months later, CDFG President Charles Chen confirmed to TRBusiness that the company had effectively won the eight-year T2 and T3 duty free concessions at Beijing Capital International Airport. The lease covers a total area of
15,000sq m. Perfumes and cosmetics, tobacco, wine and international boutique brands are the among the categories represented in the stores, which opened on 11 February 2018. A CDFG statement published by
a temporary license extension for the two years prior to the award. Its original 10-year concession expired at the end of 2015. The duty-paid travel retail shops are operated separately. Sunrise Duty Free also
operates the duty free airport concessions and specialist shops at Shanghai Pudong and Hongqiao International Airports. Based on information Beijing
Capital Airport provided to TRBusiness correspondent David Hayes last year, the airport’s estimated duty free sales in 2016 were RMB4.8bn ($765.7m) and estimated duty paid travel retail sales stood at RMB950m ($151m). In a statement commending the
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award of the Beijing duty free tender, CDFG thanked Beijing Capital Airport for selecting and trusting in its ability to operate the business, at what it terms effectively China’s national gateway airport. The company, which felt ‘a heavy
TRBusiness on 10 February said: “The commissioning of the two duty free stores at Beijing Capital International Airport will […] give full play to CDFG’s expertise in branding, operations, funds, management and membership to build these two duty free stores into world-class ones and achieve innovation-driven growth of the airport business.” Sunrise had been operating all Beijing Airport duty free shops under
MAY 2018
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responsibility’ following this key contract award, said in July 2017: “Winning the Capital International
Airport bid is another exciting milestone after triumphing in the Hong Kong Airport tender. “Leading the mission to make
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the China duty free industry stronger and greater, CDFG has responsibility and obligation to actively contribute in order to attract overseas consumption to flow back and provide more convenient duty free shopping service to tourists – especially the Chinese.” The triumph in Beijing set the perfect platform for future bids
CDFG Statement TRBUSINESS 61
TRBusiness, CDFG has benefitted hugely from the 2016 merger of parent company CITSC with the China National Travel Service Group, which effectively created a RMB120bn ($19bn) giant player in the marketplace. It now seems another massive
entity has been formed, with CDFG and Sunrise Duty Free both benefitting. «
“The Beijing Capital International duty free business will become a new landmark through our effort and cooperation. We will combine our operational advantages with those of Sunrise to deliver a good report to Capital International Airport and tourists.”
and was the ideal way to announce the creation of this powerful DF&TR alliance. The CDFG statement concluded: “The Beijing Capital International
duty free business will become a new landmark through our effort and cooperation. We will combine our operational advantages with those of Sunrise to deliver a good report to Capital International Airport and tourists.” One issue CDFG and Sunrise Duty
Free may have to face is the potential impact of Beijing’s new Daxing international airport on passenger numbers and duty free spend at Beijing Capital Airport. Due to open in 2019, the airport
is expected to serve an initial 45m passengers a year with an eventual capacity of 100m. As already documented by
Above: Sunrise secured a two- year temporary license extension after its 10-year concession at Beijing Airport expired in 2015.
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