Shanghai Pudong International Airport looks set to report another record-breaking duty free year in 2016, after sales have performed strongly again, showing an increase of 15.9% between January to October of this year, compared with +11.2% in the same period covering 2015.

 

All the signs are that the last quarter – which ends this Sunday – will more than match this growth, according to Shanghai Pudong International Airport General Manager, Qu Yi Bing.

 

“Sales growth was higher than the increase in international passenger numbers which was 12.6% for January to October. There was strong demand from Chinese travellers to other countries for duty free goods which stimulated sales,” he said.

 

HUGE SHOP EXPANSIONS PLANNED

As revealed to TRBusiness exclusively last month, this is in line with the airport plan to substantially expand its duty free arrivals retail space by 500sq m in Terminal 1 and by 800sq m in T2, with a brand new 500sq m arrivals store in the middle of the baggage collection hall.

 

These enlarged shops are expected to open in mid-2017, with the main sales emphasis on perfume, cosmetics and tobacco products. This expansion will reflect the fact that the shops currently operated by Sunrise Duty Free comprise just 20% of the retail space, yet account for a disproportionately high 50% of all sales.

 

 

Duty free as a whole is expected to account for RMB6bn ($870m) this year, while total combined duty free, duty paid and food and beverage sales are forecast to end this year at RMB6.4bn (US$930m). Click here for more details: http://www.trbusiness.com/regional-news/asia-pacific/shanghai-pudongs-new-400m-df-arrivals-focus/112459].

 

“I am not surprised by the increase in sales because of our T1 renovation, which increased the mixed category duty free area by 366sq m. This is the main reason for the increased sales,” said Qu.

 

35M INTERNATIONAL PASSENGERS EXPECTED IN 2016

Meanwhile, he added that total passenger numbers are now expected to show an overall 9.8% increase in 2016, with a combined total of 65m international and domestic passengers.

 

International passenger numbers are said to be slightly higher than domestic at Shanghai Pudong, with some 35m expected to use the airport during 2016 – up 12.6% on 2015, with the split consisting of 18m departing and 17m arriving passengers.

 

By contrast, domestic passenger growth is expected to show a slower growth rate of about 7.1% for 2016, with some 30m passengers using the airport.

 

Research by David Hayes. Written by David Hayes and Doug Newhouse.