HONG KONG. Duty Zero by CDF, the new joint venture liquor, tobacco and gourmet foods retailer at Hong Kong International Airport (HKIA), has got off to a strong start.
The retailer, the trading name of a joint venture between China Duty Free Group (CDFG) and Lagardère Travel Retail called CDF-Lagardère (CDFL) Co, started operating on Saturday 18 November.
The retailer opened six stores in the first phase of the start-up at HKIA, embracing 1631sq m of space. “The business performance over the first ten days of operation suggests a booming sales situation, with more sales revenue than expected,” said CDFL.
“The operation of HKIA represents both a milestone and touchstone for the development of China’s duty free industry” – China National Travel Service Group Vice General Manager Li Gang
The retailer highlighted several strengths of the operation. Firstly, it noted, the purchasing strengths of CDFG and Lagardère Travel Retail have been fully leveraged. This has driven an increase in the Chinese tobacco & liquor categories and in the range of imported wines & spirits. These sectors now offer consumers much greater choice, the retailer said.
CDFL said that it has implemented “the most competitive pricing strategy in Asia Pacific”. Its retail pricing has been set by benchmarking against key airports in Asia Pacific. The result, the company claimed, is that prices are generally 15%-30% lower than before at HKIA, resulting in an immediate sales boost.
Additionally, CDFL said that it has created an accomplished international management and operation team at HKIA, thus ensuring a smooth and successful takeover from former retailer DFS Group. The joint venture company said that both its partners had provided strong support and assurance to HKIA in terms of the product mix, supply of goods, pricing strategy and personnel appointments.
It said that the two partners’ “synergistic effect” on buying and retail pricing has been further strengthened by CDFG’s recent successful bid for the Beijing Capital International Airport Terminal 2 duty free contract.
CDFL applauded the role of parent company China National Travel Service Group. China’s largest travel service provider has provided generous support and cooperation in terms of passenger flow and integrated marketing, CDFL noted.
China National Travel Service Group Vice General Manager Li Gang told Chinese media, “The operation of HKIA represents both a milestone and touchstone for the development of China’s duty free industry. Chen Guoqiang [Charles Chen -Ed], President of CDFG, vowed after the successful bid to endeavour to deliver a satisfactory result for HKIA and consumers
“The post-opening performance of the HKIA duty free tobacco and liquor stores did not disappoint HKIA and consumers. The performance has injected new confidence and expectation in the international development of China’s duty free companies.”
On 28 November CDFL opened its main store in the East Hall, targeting passengers from Chinese airlines such as Air China. It also unveiled its main West Hall shop, focused on Hong Kong, European and American passengers. Duty Zero by CDF will eventually introduce eight duty free liquor & tobacco stores (including gourmet foods in some) covering 3400sq m of operational space.
The shops will include “the most complete single malt whisky range among Asia Pacific airports,” CDFL claimed, and the widest range of Asian alcohol in any airport worldwide.
A Hennessy Cognac boutique and a store featuring Hong Kong afternoon tea and local fine foods will follow during the phased opening. All stores are expected to be open by June 2018. By then, CDFL said, HKIA’s duty free tobacco and liquor stores will present a “more beautiful image” to travelling consumers.