CHINA UPDATE
“If you talk to many of the brands here, you will discover that they are actually very happy with their sales [with CDFG at least]…Beauty sales have increased more than 30% at our Beijing and Shanghai airport stores in the last three years.”
Charles Chen, President, CDFG
as South Korea. On the other hand, the sharp discounts have negatively affected retailer profitability and we must ask ourselves whether this kind of business is compatible with an industry connected with and directly engaging travellers in a luxury customer experience.” As mentioned, it’s not just outbound travel which is on
an upward trajectory; the number of domestic tourists in China continued to grow in double digits last year, supported by various Chinese Government initiatives, including major duty free developments which are making it more convenient for shoppers to access their favourite luxury brands without leaving the country. In 2018 the number of domestic tourists in China reached
5.5bn, increasing 10.8%, according to Kevin Guo, General Manager of Strategic Cooperation & Marketing Innovation at Ctrip. “In 2017, more than 900m people travelled at the
weekend,” said Guo on stage at the China’s Century Conference in Hainan. “A fifth of the domestic tourism is weekend travel. “Among the total trips, family travel accounted for 46%.
Since 2017, the proportion of leisure tourists has exceeded that of sightseeing tourists. “In 2017, the inter city self driving tourists reached 310m,
increasing 17.4% and accounts for 62% of the total number of people travelling in China.”
Luxury goods sales +37% year-on-year Travellers under 35 years old account for 70% and those under 29 years old make up more than 50% of the total. Taking the traffic growth momentum into consideration,
it is not such a surprise to discover that both domestic and offshore duty free stores in China are also registering impressive growth. China’s duty free sales reached RMB 39.49bn ($5.9bn)
in 2018, according to CDFG’s Chen, which was an increase of 27.3% year-on-year, with offshore duty free shops – such as those in Hainan – becoming increasingly popular among the Chinese. The growth of DF&TR sales in China far outpaces the rest of
Asia and indeed the rest of the world. Closely linked to the duty free industry, the luxury goods
market in China also continued to grow in 2018 with sales of luxury goods hitting RMB36bn, +37% yoy, accounting for 14% of all luxury goods sales in China. «
MAY 2019
TFWA Asia Pacific | Basement 2 | B34 TRBUSINESS 75
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