CHINA. In a major contract gain, China Duty Free Group (CDFG) has been awarded the Guangzhou Baiyun Airport Terminal 2 departures duty free concession, The Moodie Davitt Report can reveal.

The contract at China’s third-busiest international airport runs for eight years. The spectacular new T2 opens in 2018.

CDFG has operated the T1 departures duty free shop contract since early 2008. Earlier this year it was also awarded the airport’s nine-year arrivals duty free concession for T1 and T2 after submitting the highest of five bids.

CDFG now has duty free shops on arrivals at six airports: Guangzhou Baiyun, Kunming Changshui International, Nanjing Lukou International, Qingdao Liuting International, Chengdu Shuangliu International and Ürümqi Diwopu International Airport.

These design renderings illustrate the splendour and vast scale of the new Terminal 2

Guangzhou Baiyun Airport handled 59.73 million passengers last year (up +8.2% year-on-year), only behind Beijing Capital International Airport (94.39 million) and Shanghai Pudong Airport (66 million). Of those, some 13.58 million were arriving and departing international passengers. By 2020, total traffic is projected to reach 80 million and by 2030, 100 million. The airport is the main hub of China Southern Airlines and a focus city for Shenzhen Airlines.

Chart (click to enlarge) courtesy of Swiss travel retail research house m1nd-set’s Business 1ntelligence Service (B1S), a unique air traffic forecasting tool developed with IATA and ARC’s ‘Direct Data Service’ (DDS) database. The DDS programme is based on travel agency sales data captured through ARC and IATA’s financial settlement systems and direct ticket sales contributed by participating airlines, representing over 90% of the total commercial air traffic, which makes it the most accurate in the industry. The Moodie Davitt Report has entered into an exclusive agreement with m1nd-set to publish similar insights related to airport tenders. For more information, including how to subscribe to the B1S service, e-mail m1nd-set Founder & CEO Peter Mohn at pmohn@ms-research.net

CDFG is the long-time incumbent duty free retailer at Guangzhou Baiyun International Airport Terminal 1

In 2016, the airport’s passenger traffic volume surpassed those of Singapore Changi and John F. Kennedy International in New York to rank 15th in the world.

“Due to its huge passenger throughput plus its gateway status to southern China, Guangzhou Baiyun Airport’s business potential is huge,” said CDFG.

CDFG is China’s leading duty free and travel retail enterprise. It runs a combination of duty free, tax free and duty paid shops across airports, sea ports and downtown locations.

In total it operates 248 stores across Mainland China, Hong Kong, Macau and Southeast Asia, including the acclaimed Haitang Bay International Shopping Complex – the world’s largest duty free and tax free operation.

Wonder of the world: CDFG’s Haitang Bay International Shopping Complex is one of the great travel retail hubs

2017 has proved to be a particularly triumphant year for the state-owned giant. On top of its numerous arrivals shop awards and as first revealed by The Moodie Davitt Report, CDFG was awarded the Hong Kong International Airport duty free liquor & tobacco concession earlier this year in a partnership with France’s Lagardère Travel Retail. The CDF-Lagardère Company Limited alliance will commence operations in November.

Soon afterwards, in June this year, Beijing Capital International Airport awarded its two duty free concessions to CDFG (Terminal 2) and Sunrise Duty Free (T3). Subsequent to that award, CDFG completed the acquisition of a 51% holding in Sunrise Duty Free’s operations at Beijing Capital International Airport, which also has arrivals shopping.

Big and about to get bigger: Guangzhou Baiyun International Airport will be transformed by the opening of T2 next year

The Guangzhou Baiyun Airport T2 departures duty free contract marks a key expansion of CDFG’s operations at large airports, the group noted. CDFG said it places great importance on the victory, which enhances group purchasing power, operational capacity and will lead to a further strengthening of its management team.

The opening of the T2 stores will also enhance the overall competitiveness of China’s tax free and duty free industry and raise its status internationally, CDF said.

“Through these comprehensive capabilities, CDFG will be able to generate enhanced commercial value for airport partners and provide consumers with a richer choice of duty free goods at better prices,” the group concluded.

CDFG President Charles Chen (pictured here with The Moodie Davitt Report Chairman Martin Moodie) is leading a tremendous growth period for the state-owned retailer. He will be delivering a key address at next month’s Trinity Forum in Bangkok on CDFG’s global aspirations and the future of retailing to the Chinese traveller.

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