Wangfujing Group Co gains government approval to sell duty free products

By Andrew Pentol |

Wangfujing Group Co store shotChinese department store operator Wangfujing Group Co., Ltd has obtained the relevant approval to sell duty free goods.

According to documentation seen by TRBusiness, the Group, which operates more than 40 department stores including the Beijing Department Store, received confirmation from the Chinese Ministry of Finance today (9 June). The news was subsequently released by controlling shareholder Beijing Capital Tourism Group Co Ltd.

As domestic travel in China continues to recover from the Coronavirus (Covid-19) pandemic, this significant development is a signal of intent from the Chinese government to promote domestic consumption and drive healthy competition among downtown tax-free retailers.

The awarding of the duty free license follows a notice by the National Development & Reform Committee (NDRC) last month. According to multiple international media reports, the NDRC announcement indicated that China would relax control of the market and develop duty-free outlets in downtown areas to attract customers of imported goods.

LANDMARK LICENSE AWARD

News of the license award from the Ministry of Finance follows the recent announcement of Chinese government plans to more than triple the offshore duty free shopping allowance on Hainan Island from RMB30,000 ($4,219) to RMB100,000 per person/per year. This is in line with plans for a Free Trade Port on the island.

An industry source in China told TRBusiness: “The issue of the Wangfujing license is a landmark event. Wangfujing Department Store is the first traditional department store to obtain the duty free license. This means that the Chinese government may liberalise the duty free policy more widely.

“Perhaps this means there will be more supporting policies in the future, including the adjustment of the duty free purchase quota.”

Wangfujing shares soared once the news was released today, reaching the 10% daily price limit before the market closed.

TRBusiness will bring you more on this major development for the Chinese duty free industry in due course.

 

 

 

 

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