TOP 10 OPERATORS 2018 8: CHINA DUTY FREE GROUP
time and no doubt thought it had a good chance at winning, as it already had a foot in the door with JV supply partner, King Power HK. However, it was another 12 years
before CDFG (and its subsidiary Sunrise) moved into the airport after winning an eight-year lease encompassing a 15,000sq m retail footprint – including perfume and cosmetics, tobacco, wine and international boutique brands – now thought to generate around $900m (2017).
Swimming with the big fish Of course, back in 2005, CDFG, although still the nation’s largest duty free operator, was a much smaller fish, to the tune of $200m in annual revenue. [As previously mentioned, CDFG generated $2.18bn in 2017]. However, in 2017, it proved that
it could swim with the big fish when it won the coveted duty free liquor and tobacco contract at Hong Kong International Airport (HKIA) together with Lagardère Travel Retail. The CDF-Lagardère Company
Limited JV partnership has since opened eight stores totalling 3,400sqm, which were made available when incumbent DFS Group decided to waive its right to take up three-year extensions for its separate five-year liquor and tobacco, general merchandise and perfume & cosmetics concessions. Although
CDF-Lagardère
technically first opened their eight new Duty Free Zero by CDF stores at midnight on 17 November, the shops were officially inaugurated much later after a ‘successful’ trial period.
CDFG takes to the seas
Looking for the un-blocked version?
CDFG and Sunrise opened its stores at Beijing Airport earlier this year.
Advising that it would be offering a more value-oriented offer than in the past, the JV company said it would be heavily promoting its ‘Double Tax Refund’ promise. This meant that if a customer was to find the same product cheaper at another outlet within a limited period, then Duty Free Zero by CDF would refund up to twice the difference. Interestingly, after being open
just 10 days sales were said to be ‘booming’ at the new stores, with ‘more revenue than expected’, according to the company. At the time, CDFG said it had been
helped considerably by the financial boost provided to both purchasing and pricing levels following its tender win at Beijing Airport. It also praised the support from
its joint venture partner Lagardère Travel Retail and insinuated that it was open to working this way to win more business in the future. In fact, it was only some months
“CDFG is a typical Chinese company and we are lucky that we know the Chinese travellers very well…We know their shopping habits, by age, by gender, so we are lucky…we know the Chinese travellers so we are in a position where we can select the best products for them.”
Charles Chen, CDFG SUBSCRIBER ONLY CONTENT
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later that it announced a similar joint venture partnership, in order to secure a five-year duty free contract at Macau International Airport (MIA). KPM, part of King Power (HK),
which already operated the Southside DF concessions at MIA, was in fact the sole duty free operator at the airport until 2014, when a dual operator model comprising Sky Shilla Duty Free and KPM was introduced. Its long-term future at the airport was in doubt when KPM resigned
In what has been an extremely busy and exciting time for the company, CDFG secured the duty free contract on Costa Cruises’ Costa Atlantica vessel following a ‘fiercely competitive tender’ launched in 2016. CDFG and Costa Cruises have signed
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ship. This is a new chapter in the cruise duty free business.” Founded in 1948, Costa Cruises is the
an initial memorandum signifying a ‘comprehensive future cooperation.’ The company said: “This marks the first
time CDFG has independently operated on an internationally renowned cruise
OCTOBER 2018 Contact:
janice@trbusiness.com
largest cruise fleet in Europe. In 2006, it opened its first international route sailing out of China and over the past decade has provided cruise holidays for more than two million Chinese tourists. CDFG added: “With the explosive
growth of cruise tourism, China has become the fastest growing emerging market in the global cruise
tourism industry. In recent years, the tax free cruise industry has become a key strategic project for China Duty Free Group.”
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