Chinese department store retailer Wangfujing Group issued with duty free licence

CHINA. Beijing-based department store operator Wangfujing Group has been granted a licence to sell duty free goods by the Ministry of Finance.

The announcement by Wangfujing Group was first revealed yesterday by Jason Cao’s Duty Free Expert. The news comes as the Chinese government steps up its efforts to maximise domestic consumption.

The Moodie Davitt Report is seeking clarification on the terms of Wangfujing Group’s operating licence and any related timeline. One leading Chinese analyst noted yesterday that the issuing of a licence does not automatically translate into the ability to quickly start up a duty free store.

The note said that while Wangfujing’s licence does highlight a highly significant deregulation of the duty free market, it is unlikely to alter the dominance of China International Travel Service (CITS), through subsidiary China Duty Free Group (CDFG).

“We believe that there is still no essential disturbance to the core competitiveness of CITS, and the market has expected this event,” the analyst noted.

As well as the rapid development of the offshore duty free offer on Hainan island, both CNSC and CDFG have opened several downtown duty free stores across the country in recent times and each has ambitious roll-out programmes.

Wangfujing Group, which sells apparel and cosmetics across more than 40 department stores, said in a statement it would “proactively push forward relevant work”.

The company’s share price on the Shanghai Stock Exchange rose 10% following the announcement.