CHINA. At the Virtual Travel Retail Expo last week, sector newcomer Wangfujing Duty Free presented a dazzling perspective of its plans to become a new powerhouse in China’s fast-growing travel retail sector (see video below).
The company, which exhibited and also presented within the Experience Arena at the Expo, may be a newcomer to duty free but it enjoys a rich heritage, having grown out of Beijing Department Store, China’s oldest department group.
Wangfujing Group, one of China’s most powerful and respected retailers, was granted a duty free licence by China’s Ministry of Tourism in June 2020. The following month it created a wholly owned subsidiary duty free company, Beijing Wangfujing Duty Free Management Co Ltd (Wangfujing Duty Free), with registered capital of RMB500 million (US$72 million).
At the Virtual Travel Retail Expo, Wangfujing Duty Free is wowing visitors with its experiential stand and a compelling video presentation in the Experience Arena by Grace Zen, Vice President of Wangfujing Group and Deputy General Manager of Wangfujing Duty Free, and Cathy Sun, Chief Operation Officer. [The Virtual Travel Retail Expo remains open until the end of November so registrants can discover the world of Wangfujing Duty Free until then. To register please visit www.VirtualTRExpo.com.]
“Firstly, Wangfujing Duty Free will continue to build our unique strengths, including developing an independent and complete duty free supply chain system,” said Ms Zen. “Second, combining with the existing advantages of Wangfujing Group, we will create an integrated duty free and duty paid business blueprint.
“Third, we will establish a closed consumption loop through online and offline system integration, customer relationship management (CRM) and omnichannel construction.”
Cathy Sun added details to Wangfujing Duty Free’s three key strategies. “First, we will set up our own independent duty free supply chain. Category supply can be regarded as the core of the industry. It decides where to play in this competition and how fast we can expand our business scope.
“Amid the increasing homogeneity of products in the duty free industry, we have been diligently working on how to create a new and different category supply chain. We hope to… provide consumers with more beautiful brands and products in the duty free industry and offer more ingenious brands with a platform for development and communication.”
“In 2020, Wangfujing Group was granted a duty free licence. Unlike other competitors’ choice which is to cooperate with existing foreign duty free licence holders, we choose to establish our own independent supply chain. In the past one year, we have already set up our Shanghai luxury buying team, leveraging our existing duty paid luxury buying company Luxemporium Shanghai.
“We have already started up our collaborative relationship with more than 600 brands, with half of them being introduced to the China market. In the cosmetics, wine [and spirits] and jewellery categories, we leverage the existing duty paid channel to set up a holistic collaboration map with brands’ global headquarters.
“Wangfuing is already the important partner of many brands in the duty paid market. With the new duty free business scope, our strategic partnership will be raised to a new level on a global scale.
“Our second strategy is to combine with the existing advantage of Wangfujing Group to create an integrated duty free and duty paid business blueprint. Supply chain is the foundation of the business. However, with more companies stepping into the competition and more brands putting their focus on duty free channels, many believe that the future competition in the duty free industry will be beyond the competition of a supply chain – it will be more about the retail capability.
“As a new business subsidiary of a retail giant with a 66-year history, Wangfujing Duty Free is actively building a differentiated brand positioning by enhancing the richness of the content of our own brand. To create professionalism and the young brand, ‘Discover Your Shopping Wonderland’ is our slogan.
“The soul of the retail industry is service. Wangfujing Duty Free’s service team training is based on the concept of ‘The cradle of service artists’. We gather top talents with a sense of style, professionalism, and confidence. We equip them with our unique service artists training system. We also set up a service evaluation and tracking system so that their feedback suggestions and problems can be heard, understood and resolved immediately.
“Third, we will establish a closed consumption loop through online and offline system integration, customer relationship management and omnichannel construction, In the age of digital consumption, consumers’ ‘decision tree’ changes with the times.
“We will adopt a new way of digital interactive experiences for consumers to quickly choose their products so as not to waste their travel time. On top of this, the online sector is not only for new member recruiting but is also the platform to drive repeat purchases. Today, the cost of recruiting a new user is becoming more and more expensive.
“Online business will be the key developing area for our duty free retail business. We will launch our WeChat Mini Program at the same time as our offline store grand opening
“By leveraging the advantages of Wangfujing Group’s 5+2 business formats, Wanfujing Duty Free has already accumulated over 30 million seed users. We have established a full business membership system covering all duty free and duty paid e channels within our group.
“Looking forward, we are optimistic about the development of the duty free industry, especially in relation to the construction of a Free Trade Port in Hainan. As a company with a duty free licence, Wangfujing Duty Free has a solid plan covering all different channels.
“Wangfujing duty free has implemented various strategies in different types of duty free channels. In airport duty free, we will build the first airport duty free shop with digital interactive experiences in China. In downtown duty free we will integrate duty free and duty paid dual modes to attract traffic from multi-business models and enrich the dimension of tourism products in Beijing.
“In Hainan we want to create a tourist destination incorporating leisure entertainment and shopping experiences. We will build a compound tourism business complex, which is not only a duty free shopping center but also a commercial project with tourism services – a commercial project that represents the image of the city and that will soon become the city’s landmark.
“Wangfujing Duty Free is looking for common direct development, harmonious relationships and win-win cooperation with you. We are aiming to build the image of an export-oriented duty free operator, breaking the original industry’s rigid operating constraints to present you with an all-new Wangfujing Duty Free.”
