China Duty Free Group (CDFG) parent company has seen its nine-month sales soar by 29.1% year-on-year to hit RMB50.837 billion/about US$6.9bn, but operating profits for the period fell by 1.6%.

China Tourism Group Duty Free Corporation Limited’s operating profit stood at RMB6.56bn/around US$900m to 30 September 2023, according to a Shanghai Stock Exchange filing seen by TRBusiness. 

However, both sales and profit both surged in the third quarter, with operating income standing at RMB14.9bn/US$2.1bn, an increase of almost 28%. Profits accelerated sharply, climbing 93% to RMB1.3bn/US$182m.

The increases follow a low comparison basis with Hainan stores closed in Q3 2022 due to Covid. 

“During the reporting period, the company focused on sustainability and pursued balanced growth in scale and profits,” China Tourism Group said in the financial statement released on 9 October 2023 (from translation).

China Duty Free Group: Meeting ‘diverse consumption needs’

The Group added added that the main reason for the improved performance was the recovery of the domestic tourism market. It noted that the state council’s policy for driving consumption continued to develop.

“While opening up the duty free market on Hainan’s outlying islands, it also actively promotes the business of entry-exit stores at key airports such as Beijing and Shanghai,” the statement continued. 

“At the same time, the company continues to optimise product supply, comprehensively improve customer service capabilities and service quality, and improve customer experience and meet diverse consumption needs.”

In March 2023, China Tourism Group took a 49% stake in China National Service Corporation, valued at RMB 1,228 million/US$178.6 million.

The move came as the business looked to bolster profitability and leverage its tax free business.

Recent brand partnerships with CDFG include Bacardi’s creation of 25 Year Old Aberfeldy single malts in July 2023.

The same month, L’Oréal Travel Retail Asia Pacific teamed up with CDFG to open an Armani Beauty flagship at the cdf Haikou International Duty Free Shopping Complex in Hainan.