TOP 10 OPERATORS 2018 8: CHINA DUTY FREE GROUP


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China Duty Free Group grows its Chinese airport empire


China Duty Free Group’s total sales leapt by almost +70% to reach $2.3bn in 2017 as the company brought its retail blueprints to life at both Beijing and Hong Kong International airports. Charlotte Turner reports on another phenomenal year for the company.


s TRBusiness remembers writing in last year’s Top 10 Operators report, 2016 and


2017 saw CDFG switch up a gear in its expansion drive. Following a major merger of


its parent company – CITS – with Hong-Kong based China National Travel Service (HK) Group and the election of a new President – Charles Chen – the company was able to successfully grow its sales by +69.25% to CNY14.861bn ($2.18bn) in 2017. Including duty paid sales, the total figure grew +66.55% to reach CNY15.62bn ($2.3bn). [These figures, which were sourced from the company’s 2017 financial report, were shared with TRBusiness directly by CDFG]. The impressive sales growth


was no doubt influenced in part by a healthy supply of tourists to China; particularly to the country’s Hainan Province where the company operates its large Sanya store. Inbound tourism to Hainan


increased by 50% to 1.1m in 2017 helping to bring about a +21% rise in total


tourism revenue to


RMB81.19bn ($12.8bn). Meanwhile, foreign exchange


income rose by a remarkable 95% year-on-year to total $681m,


OCTOBER 2018


prompting Hainan Tourism Commission Director Sun Ying to reveal that Hainan is targeting 74m tourists this year, including 1.33m inbound tourists (+22.6%). It was also revealed that there are


plans to promote further relaxations on restrictions of duty free sales, increase the current duty free ceiling, and unify duty free shopping policies for island tourists. If the Commission’s aims


materialise, this would represent a huge boost for the duty free business in Hainan and its two competing operations in Haikou and Sanya; the latter operated by China Duty Free Group.


Huge airport portfolio Whilst the off-airport business is very important to CDFG, its focus has clearly been on winning and retaining new business at major Chinese airports in the last few years and it has been very successful, picking up contracts in Beijing, Shanghai, Macau and Hong Kong whilst picking up an eight-year contract with existing partner Guangzhou Baiyun Airport for the new terminal 2. In 2018 the company was able to


bring its vision and ambitious plans to life at two of the biggest and busiest airports in the world. One of these was of course Beijing Capital International Airport (BCIA), which awarded concessions in both T2 and T3 to CDFG and its subsidiary, Sunrise Duty Free (China) Co. Ltd. CDFG acquired 51% of Sunrise


Duty Free [from the Boyu Capital private equity company] as reported exclusively by TRBusiness last year. Sunrise originally won the business at Beijing under a 15-year lease in 2005 when total duty free sales at the airport were reaching around $34m. Interestingly, China Duty Free Group also bid for the business at the


“With our network and expertise of serving the Chinese traveller we are confident we will be able to provide MIA, our supplier partners and, most importantly, the MIA customer, with an outstanding retail experience.”


Charles Chen, President, CDFG


TOP 10 OPERATORS 61


Above: CDFG picked up another eight- year contract for Guangzhou International Airport last year.


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