LEADING ASPAC OPERATORS: CHINA DUTY FREE GROUP


few passengers are passing by our departures stores. It’s a really tough time for the airport business.” According to Reuters, on 29 March


the Civil Aviation Administration of China (CAAC) directed Chinese airlines to maintain only one route to any country and limit the number of flights to one per week. [At the time of writing restrictions were still in place - Ed]. While Chen is reluctant to make


meaningful forecasts right now, he maintains that the resurgence of traffic will depend on how the virus can be contained outside of China. “I think in May not much will have


changed for international traffic, but in June if other countries can control the virus, maybe gradually the government will permit more flights again.” Chen believes that Chinese


travellers consider it safe to fly domestically now and many have returned to work. However, strict controls are still in place. “Even now in Beijing the controls


concerning staff going into the office are very strict and we have to test their temperature every day,” says Chen of CDFG’s employees. Following the Chinese New Year


period, Chen himself returned to work and has spent almost every working day since, in the office, joined by his top management. “We have so many meetings,


every day [video/tele-conferencing],” he says. “We have to do even more than before. But we are not allowed more than 50% of our total staff in the office at one time. Keeping within that limit, I had to tell my staff to return to the office, because we have so much to do.” While many employees have


returned to the office in Beijing, many frontline sales staff are currently residing at home, waiting for CDFG to reopen many of its stores. During the peak of the virus, over 130 stores were closed, according to Chen, but since then around half have reopened. Many of those that remain closed are located at the airports. “We have had some meetings with


our airport partners to discuss our rent fees,” reveals Chen. “We are in conversation with a lot of them now and there is a mutual understanding


MAY 2020


between us. “The fact remains: there are so few


passengers in the airports. At Hong Kong Airport in particular we have no customers from Mainland China and no international passengers.” Chen also reveals that the


company’s airport partners in Mainland China are actually encouraging CDFG to reopen more stores. However, Chen explains that at the moment this just isn’t feasible. “The airports actually encourage


us to open more of our stores, but the problem we have is that there are not enough passengers. “By opening stores it does give


passengers more confidence that the environment is safe and perhaps opening one or two stores is ok, but if all the stores are open, it would cost us a lot. “In Beijing and Shanghai our


departures stores are still open, for example, but I still have a solution to find: how do we reduce the cost of operating our stores right now? It’s not affordable to open and staff all our stores.”


Home delivery option While much for the travel industry remains uncertain, Chen is adamant that Chinese travellers will remain the most important customers for the global duty free industry. With many unable, or unwilling to leave China, brand partners would be wise to consider the region a top priority, says Chen. “We are very lucky that so far we


have had a lot of support from our vendors and that the purchasing power for the Chinese consumer is still there,” he says. “There is an especially strong


appetite from women to shop. They still want to spend money – even though they are staying at home – on cosmetics and perfume.” While many in China are clearly


looking for some retail therapy, many do not yet feel safe in bricks and mortar shopping environments. However, Chen believes he has


found a temporary solution. “So, I have been talking to a lot of vendors and asking them if we can think of a way to help travellers, who are returning from overseas to still buy duty free products when they aren’t


“We are very lucky that so far we have had a lot of support from our vendors and that the purchasing power for the Chinese consumer is still there.”


Charles Chen, CDFG


physically able to (or would prefer not to) shop instore. How can we supply duty free goods to them and organise home delivery?” While customers cannot enter the


company’s arrivals stores currently, CDFG says it can use passport and flight details to organise home delivery. “As people are staying at home they


are using their mobile phones more than ever so they make the order online, they supply their passport number, flight number etc and we try to send it to their home,” says Chen. However, he insists that this a temporary measure, implemented during an unprecedented crisis. “Because, as you know, we have


so many [bricks and mortar] stores, I really hope that our customers will return to our stores, once all this is over.” «


Above: CDFG reopened its Haitang Bay store in February this year.


Charles Chen believes that the purchasing power of Chinese travellers is still strong.


TRBUSINESS 37


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