Haikou mall sets ‘a new benchmark’, says CDFG

By Luke Barras-hill |

Operating revenue at CDFG rose by 127.5% in Q1 2021 year-on-year to total RMB18.13 billion.

China Duty Free Group (CDFG) President Charles Chen believes China’s DF&TR market possesses ‘infinite potential’ for the future, linked to government support through preferential policies coupled with the insatiable rise in consumption among Chinese consumers.

This bodes well, reports Luke Barras-Hill, as CDFG accelerates the construction of its latest Haikou International Duty Free City shopping complex on Hainan island ahead of its much-anticipated opening in 2022.

A cataclysmic sales year for global travel retail in 2020 was characterised by downtrodden passenger numbers, closed borders, grounded flights and the introduction of a flurry of now familiar health and safety protocols.

But one beacon continues to shine brightly on Hainan island and China Duty Free Group (CDFG) continues to exercise its commercial muscle.

The leading travel retailer achieved operating revenue of RMB52.59 billion/US$8.05 billion in 2020 – a year-on-year increase of +8.2% – according to the 2020 annual report from parent China Tourism Group China Duty Free Co Ltd.

OPERATING REVENUE UP IN FIRST QUARTER

Speaking to TRBusiness in a recent interview, Chen confirms that in the first quarter of 2021 CDFG has continued to ‘deeply cultivate’ the liberalised offshore market conditions in Hainan. This helped the company to achieve operating revenue growth of +127.48% year-on-year to RMB18.13bn/$2.76bn.

Indeed, the ‘stimulating effects’ of the offshore duty free allowance policy on Hainan island continues to be telling. Chen shares that from 1 July 2020 – the date in which Hainan tripled the offshore duty free allowance to RMB100,000 –  to 6 April 2021, total offshore duty free shopping sales volumes supervised by customs rose by 244% to RMB34.7bn. This accompanied a 101% rise in travellers visiting the island to just shy of five million for the period in question.

CDFG is accelerating developments at the new Haikou International Duty Free Shopping Complex, construction of which began in 2019. The company previously told TRBusiness that the Sanya International Duty Free Shopping Complex (pictured) had become ‘saturated’.

During the recent Labor Day holiday (1-5 May) offshore duty free revenue in Hainan surged by an eye-watering 248% to RMB993m with shoppers up 141% to 121,000, based on figures from Haikou Customs. As reported on TRBusiness.com, sales on Hainan island are tipped to reach approximately RMB100bn by 2022.

CDFG already holds several duty free concessions at Haikou Meilan International Airport, Haikou Ri Yue Plaza, Sanya International Duty Free Complex in Haitang Bay, Ba’ao and Sanya Phoenix International Airport, with further projects in the pipeline.

Significantly, the firm will bolster its already sprawling presence in Hainan at the Haikou International Duty Free City shopping complex located in the east of the new seaport on the west coast of Haikou City.

“This new project is a large duty free tourism complex covering duty free business, taxed business, high-end office, high-end hotel, talent community and other scenarios,” explains Chen.

“Through the organic combination of comprehensive duty free shopping and holiday-oriented commercial blocks, it aims to create a new benchmark for Chinese commercial projects and a new business card of world travel retail.”

Situated on a site covering approximately 675 acres with a total planned construction area of around 926,000sq m, the project comprises six blocks. Block five houses the core duty free business centre. This has now taken shape on a preliminary basis, TRBusiness learns.

“With a flexible and elegant architectural style, these buildings resemble auspicious clouds on the sea,” comments Chen.”The construction of the main structure and floor slab of Block #5 has been basically completed. It is estimated that the duty free business centre will be officially opened on block #5 in the middle of 2022.”

Click here to access the TRBusiness June e-zine to read the full interview with Charles Chen.

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