The China Duty Free Group (CDFG) is rapidly expanding its travel retail business in Mainland China, according to an exclusive in-depth interview with The Business.

 

This expansion is being stimulated by the expansion of luxury brand retailing across China, with CDFG becoming increasingly involved with duty paid luxury brand outlets in domestic airport terminals, alongside its established business with international terminal duty free sales. It is also planning to expand its downtown duty free retail activities on Hainan Island and open downtown shops in Beijing and other major cities.

 

Other locations where CDFG is working to develop travel retail operations in future include luxury brand shops in China’s new high-speed railway stations, while expanding retail operations at major frontier crossing points along the country’s long border.

 

‘LARGEST DUTY FREE STORE IN THE WORLD’

At 60,000sq m in size, the state-owned company says it also plans to open ‘the largest duty free store in the world’ at Haitang Bay in 2014 which will effectively be ten times the size of its existing shop which is already recording an annual sales turnover of $300m.

 

Interestingly, CDFG estimates that the Hainan Island offshore duty free shopping market is currently worth around $425m a year, some $185m more than the company’s estimated revenue in its present Sanya shop (pictured here). However, some of this market is being supplied by Sanya’s other downtown shop managed on behalf of a company connected with Hainan Airport by DFS Group.

 

 

“Our Haitang Bay International Duty Free Complex will be the largest duty free store in the world,” said a CDFG source said. “The complex will open in 2014. It will have a completely different look to our first Sanya store. The interior design theme includes flowers and plants. The store will have a modern international feel.”

 

The new complex will also include a hotel, cinema complex, theme stores and a food centre. “The main reason for this project is there is still a lot of potential under Hainan’s offshore duty free policy,” the source said. “The new store customer capacity will be really big.”

 

In this major interview with The Business in China last month, CDFG also talks about a large number of its new duty paid and duty free projects at many other Mainland Chinese airport, border, bus and train stations, plus cruise ships and diplomatic missions.

 

In total CDFG says that its revenue has grown at a double-digit rate for the past five years, climbing at a significant 43.6% in 2011 to reach $660m, up $200m from almost $460m in 2010, boosted by last year’s opening of the company’s downtown duty free store in Sanya, Hainan Province. The company currently operates 190-plus stores throughout Mainland China.

 

For the full and in-depth interview click here.