CHINA. Sunrise Duty Free (Shanghai Co), the 51% subsidiary of China Duty Free Group (CDFG), today signed a seven-year contract with Shanghai International Airport Co for duty free operations at Shanghai Hongqiao International and Shanghai Pudong International airports.
As revealed by The Moodie Davitt Report in July, Sunrise Duty Free (Shanghai Co) Ltd was awarded the seven-year duty free contract at the two Shanghai airports. The concession starts from 1 January 2019 and runs to 31 December 2025. Sunrise was the long-term and much-respected incumbent at both airports.
CDFG described the ceremony as a “landmark moment in the history of China’s duty free industry”.
Underlining the importance of the occasion, the ceremony was attended by Charles Chen, President of CDFG and Chairman of Sunrise Shanghai; Sunrise Duty Free Founder Madam Zhang Fengyi; Shanghai International Airport Co Chairman Jia Ruijun, General Manager Hu Zhihong, and Deputy General Manager Huang Wei; together with Wang Xu, Chief Financial Officer of Shanghai Airport (Group) Co and fellow Deputy General Manager of Shanghai International Airport Co; and Qu Yibing, General Manager of Shanghai International Airport Co’s local company.
Jia Ruijun described the cooperation between Shanghai International Airport Co and CDFG/Sunrise as a major event in China’s duty free industry and of great significance to its development.
Over the past 20 years, Sunrise Duty Free has achieved great success in Shanghai International Airport’s two travel retail operations, he said. The strong support of shareholders such as China International Group and CITIC Group will inevitably bring new momentum to the development of the gateways’ duty free business, he said.
As a Chinese-owned and operated duty free company, CDFG has a key responsibility to make greater contributions to the prosperity and development of China’s travel retail sector, noted Charles Chen.
Such vitality will add impetus to Shanghai’s development as an international tourism city and accelerate the creation of a ‘Shanghai Shopping’ brand, he said. It is hoped that Shanghai will continue to improve the quality of duty free retailing in the future, foster a good shopping reputation, meet the diverse needs of travelling consumers, and be a trend-setter in global duty free shopping – all helping Shanghai International Airport to develop the world’s leading aviation hub.
Charles Chen expressed his gratitude to Shanghai Airport (Group) Co and Shanghai International Airport Co for their trust and affirmation. He said that CDFG has achieved a “leap forward” development in recent years.
The recent merger of Sunrise Duty Free into CDFG has brought benefits of scale in product procurement and led to a more diversified product range, Chen said. Additionally, the retailer’s operational management, marketing, and logistics systems have also made great progress.
Chinese tourists have become the predominant force in global duty free shopping, Chen noted. As a Chinese-owned and operated duty free company, CDFG has a key responsibility to make greater contributions to the prosperity and development of China’s travel retail sector, he commented.
The Shanghai management team has a wealth of operational experience and high-level management capabilities, and would certainly not disappoint the expectations of Shanghai Airport, Chen promised. In terms of the store design, brand investment, retail pricing and all other aspects of the ‘Shanghai Shopping’ image, the company will help create a unique and industry-leading duty free business for the airport, he said.
Hu Zhihong and Zhang Fengyi said that the two parties will maintain a close cooperative relationship and work together to build Shanghai Airport duty free into a new landmark for Asia Pacific’s travel retail sector.
The airport and retail companies pledged to work together closely over the next seven years to generate complementary benefits. They will strive to enhance the retail environment of Shanghai’s two major airports, enrich the shopping brand, further promote the airports’ respective duty free businesses, and introduce a higher quality offer and environment to consumers.
NOTE: Shanghai Airport Authority will host this year’s Trinity Forum to be held in Shanghai on 31 October-1 November. Shanghai Airport Authority President Xin Feng will deliver a major address while a senior retail representative will talk about the exciting commercial opportunities that lie ahead. Charles Chen, President of CDFG and Chairman of Sunrise Shanghai, will deliver the first-day retail keynote speech.
BACKGROUND TO THE CDFG/SUNRISE ALLIANCE
As mentioned, Sunrise Duty Free (Shanghai) is the long-term Pudong and Hongqiao incumbent. As revealed by The Moodie Davitt Report, state-controlled rival China Duty Free Group (CDFG) acquired 51% of Sunrise Duty Free (Shanghai) Co. Ltd from Base Rich Investments Limited and Shanghai Wenyuzhai Books Co. Ltd in February this year.
The US$239 million deal covered all Sunrise Duty Free’s business at Shanghai Pudong Airport (the main location) and Shanghai Hongqiao International Airport. That transaction followed a similar 51% acquisition by CDFG last year of Sunrise’s Beijing Capital International Airport operations.
