CHINA. Newly appointed China Duty Free Group (CDFG) President Charles Chen outlined the retailer’s ambitious growth plans during a stirring presentation at TFWA’s China Century conference in Guangzhou today.
Chen, who was promoted to the role in December, painted a vibrant picture of CDFG’s future in a fast-changing marketplace. Speaking in English and dividing his speech into sections on changes and trends and how to unlock the market potential, Cheng revealed that the company is committed to expansion at home and abroad.
The group took confidence from its strong Golden Week sales at Haitang Bay, Sanya on Hainan Island during the recent Chinese New Year holiday. These reached CNY290 million (just under US$42 million), a +6% rise year-on-year.
As revealed by The Moodie Davitt Report, CDFG is bidding on both the liquor & tobacco and perfumes & cosmetics concessions (with Lagardère Travel Retail) at Hong Kong International Airport (HKIA). Chen said that CDFG (alone) will also bid on the Beijing Capital International Airport T2 and T3 duty free tenders currently out to bid (as again revealed by The Moodie Davitt Report), where offers are due by 6 April.
The retailer is also confident of expanding its arrivals duty free shopping network in China during the current round of 19 tenders across China. As revealed by The Moodie Davitt Report, CDFG was recently awarded the duty free arrivals contract at Kunming Airport, boosting the company’s existing portfolio of eight arrivals stores.
Chen also pledged further retail expansion within China’s booming cruiseline and airport duty paid sectors; and to rebuild and upgrade its stores at key Chinese airport hubs. He promised the company would also introduce new brands popular with Chinese consumers; and more surprisingly, that it would open duty free stores in key Chinese tourist destinations abroad. Asia Pacific and Europe will be the two key areas of focus, he said.
CDFG has created an entity called China Overseas Investment Management Company, working with leading outbound travel groups U-tour, Caissa and Bamboo Garden International Tours, with the aim of developing the travel retail business in popular Chinese destinations.
But the retailer doesn’t plan to stop there. It is also targeting China’s burgeoning rail sector, examining food & beverage opportunities, and looking at brand acquisitions. It will also place an unprecedented focus on integrating online and offline retailing, Chen pledged. “CDFG’s online duty free shopping platform will become the best channel for brands to enter the e-commerce channel in China,” he said.
Footnote: After his presentation, Charles Chen spoke exclusively to Martin Moodie about CDFG’s strategy and growth plans for China and overseas. It’s a fascinating, powerful and must-read interview with plenty of surprises. Look out for it later this month.
Footnote (2): Chen’s presentation was followed by another outstanding address, this time from DFS Group Chairman & CEO Philippe Schaus. Look out for our report on that presentation soon.
