Burberry, Cartier, Michael Kors and Montblanc are amongst the nine-plus boutique brands that have so far committed to opening luxury boutiques in the new Shanghai Pudong International Airport Terminal 1 shopping area.

 

Construction work originally scheduled for completion in the middle of this year is continuing, while details of the new shop and boutique layout configuration are finalised by Pudong’s duty free operator, Sunrise Duty Free.

 

Launched in November 2013, the T1 renovation scheme involves building new boutiques and other outlets, while doubling the duty free retail area to reach a similar size to the sales floor in Pudong Airport’s Terminal 2 departure area.

 

Talking exclusively to TRBusiness, a source at Shanghai International Airport Co Ltd, which operates Pudong Airport, said other fashion brands that have confirmed they will also be opening boutiques in a new boutique zone include Bally, Maxmara, Paul & Shark, MCM and Tommy Hilfiger.

 

 

“We are making every effort to complete the Terminal 1 reconstruction by the original deadline, but it is hard to confirm now. The new duty free shops will open when the reconstruction finishes around the beginning of 2016,” said the source.

 

The total combined duty free sales space in Pudong Airport T1 and T2 is currently about 4,700sq m, while duty free shopping facilities in T2 are much larger and occupy twice the area of those in T1. Once complete, the combined T1 departure and arrival duty free shopping areas will be the same size as those in T2.

 

The source explained that the new duty free shops will be located in the central area of the T1 North Wing. Travel retail facilities are being upgraded and expanded by a complete renovation of the area, which involves removing some existing duty free shops and other retail outlets. Sunrise operates Pudong Airport’s duty free shops and boutiques under a 10-year concession contract that will expire in 2020.

 

Asked how many perfume and cosmetics, liquor and tobacco, fashion and general merchandise outlets will be opened in the new retail facilities the source replied: “The information will be decided by the retailer once they complete their plan.”

 

 

Meanwhile, international passenger numbers using Pudong Airport are growing at a double-digit rate this year after Pudong Airport handled 51m passengers in 2014. International passengers accounted for 45% of total passenger traffic and domestic travellers the balance.

 

“Compared with June 2014 the passenger increase percentage is about 18%,” said the source. “More people want to travel overseas. There is more demand for air travel; the main reason is the low oil price and cheaper plane ticket prices. Duty free sales also are increasing better than last year, mainly because of the increase in passenger numbers.”

 

Duty free sales at Pudong Airport reached an estimated RMB40bn (US$650m) in 2014 with estimated sales growth of more than 10%.

 

Meanwhile, Sunrise’s Pudong Airport duty free expansion programme also includes the opening of a third duty free arrival shop in T2. This is part of Shanghai International Airport Co’s plans to expand the airport’s total duty free arrival and departure shopping space by about 50% in both terminals – in a major bid to boost non-aeronautical income.

 

 

The new T2 arrival shop is expected to occupy around 300sq m and be located in the centre of the arrival baggage claim hall between the two existing arrival shops. The new inbound shop will substantially increase arrival shopping space in T2, where the two existing arrival shops total 217sq m in combined retail area.

 

The new shop will sell mostly cosmetics, tobacco and perfume, focusing on popular products. An opening date, which was originally set for around October this year, has still to be confirmed.

 

Sunrise’s T2 departure duty free shopping facilities total 3,000sq m in T2 and consist of two separate areas with interconnecting shops. These will remain unaltered in size at the end of the current duty free expansion and upgrade programme.

 

However, the company’s duty free departure and arrival shops in both terminals will be redecorated after the renovation scheme is completed, as part of Pudong Airport’s plans to create a more modern stylish airport image.