CHINA (MACAU). A joint venture between China Duty Free Group (CDFG), the leading Chinese duty free retailer, and King Power Macau (KPM), part of King Power Group (Hong Kong), has been awarded a five-year duty free contract at Macau International Airport.
The two companies formed the joint venture to bid as China Duty Free (Macau) Limited.
CDFG, China’s travel retail giant, is a state-owned duty free retailer with 249 duty free outlets in China and overseas. Its parent company China National Travel Service Group is China’s largest tourism group.
The joint Macau coup is the latest in a string of successes for CDFG over the past year. As revealed by The Moodie Davitt Report, CDFG was awarded the Hong Kong International Airport duty free liquor, tobacco and gourmet foods concession (in partnership with Lagardère Travel Retail) in April 2017, followed by the award of an eight-year duty free contract (with its new subsidiary company Sunrise Duty Free) at T2 and T3 Beijing Capital International Airport.
CDFG recently completed the acquisition of 51% of the shares of Sunrise Duty Free (China) Co Ltd and Sunrise Duty Free (Shanghai) Co Ltd. The two-stage acquisition, exclusively reported by The Moodie Davitt Report, has just been formally approved by the Chinese government.
Additionally, CDFG snapped up a string of airport arrivals duty free concessions in Mainland China last year and was awarded the departures duty free concession at Guangzhou Baiyun Airport Terminal 2 – China’s third-busiest airport.
As revealed by The Moodie Davitt Report, CDFG posted a dazzling first-quarter 2018 performance, building on a tremendous year in 2017 when it generated a +69.25% increase in sales. The company generated an +89.62% revenue rise year-on-year in the quarter to CNY6.43 billion (US$1.02 billion). Net profit rocketed by +52.46% (see table below).
KPM currently operates the Southside duty free concession at MIA. The Antares Cheng-run company was the sole duty free retailer at the airport until 2014 when a controversial dual-operator model was established by Macau International Airport (the other is run by a joint venture between Sky Connection of Hong Kong and The Shilla Duty Free of South Korea).
As revealed by The Moodie Davitt Report in January, King Power resigned its concession after failing to renegotiate terms in a deeply challenging business climate. Its return in such a powerful joint venture appears a strong vindication of that move.
CDFG President Charles Chen said: “With our network and expertise of serving the Chinese traveller, we are confident that, we will be able to provide MIA, our supplier partners and, most importantly, the MIA customer, with an outstanding retail experience.
“The partnership with KPM adds tremendous value to our bid, as the company has long-term experience and knowledge of the business at MIA. With this understanding plus their international reach as part of King Power Group (Hong Kong), we consider them to be valuable partners.”
King Power Group (HK), Managing Director (Duty Free and Travel Retail) Sunil Tuli commented: “From our point of view, this joint venture between our two companies will give the best value proposition to all parties.
“We have operated the duty free business at MIA for 23 years and have in-depth knowledge of the demographics and the buying habits of our travelling customers at the airport. As a result, we are confident that we are able to provide the most efficient and effective duty free operations in partnership with CDFG at MIA. We have a long history and association with them and are pleased to be working together with them.”
We’ll bring you comment and analysis of this key tender victory in this week’s Moodie Davitt e-Zine, out tomorrow.
Footnote (1): CDFG President and Sunrise Duty Free (China and Shanghai) Chairman Charles Chen will be a keynote speaker at this year’s Trinity Forum in Shanghai on 31 October-1 November. Click here for registration details.
*Footnote (2): The Moodie Davitt Report has teamed up with Chinese travel retail information provider DutyFreeExpert to provide a new fortnightly Chinese language industry information service on WeChat.
i免税中国 (literally ‘Love Duty Free, Love China’) was launched on the popular Chinese social media platform last Friday. It will provide news from the Chinese travel retail and duty free market and on Chinese shopping overseas. It will also bring Chinese readers highlights of the most important international brand, retail, aviation and tourism developments.
Readers anywhere in the world can simply scan the QR code below to read issue 1 of i爱免税中国 or simply click on this link https://mp.weixin.qq.com/s?__biz=MjM5OTMzNDk0MA==&mid=2650979346&idx=1&sn=cff4d34098a4fda7d2c4ec30269533a7&chksm=bccb19618bbc90778ae39783358abb507c2d8da6ea30c1a15d23983ce51878a34f687bcbe722#rd
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