Wangfujing Group creates dedicated duty free company

CHINA. Beijing-based department store operator Wangfujing Group, which last month was granted a licence to sell duty free goods by the Ministry of Finance, today announced the creation of a wholly owned subsidiary duty free company.

Beijing Wangfujing Duty Free Management Co Ltd will have registered capital of RMB500 million (US$72 million).

The new company’s business scope includes operating duty free stores and selling a range of related duty free and tax free goods.

The new company is likely to focus on opportunities both within the Mainland and in Hainan province, where the recently liberalised offshore duty free shopping policy encourages additional competition to market leader China Duty Free Group.

Wangfujing Group opened one of Beijing’s best-known department stores in 1955 and still operates it to this day

Wangfujing Group commented: “In recent years, with the continuous development of China’s market economy and the further liberalisation of tax exemption policies, China’s duty free market has great potential for development.

“The company’s investment in the establishment of a duty free goods management company is in line with our strategy. The development direction is conducive to expanding the company’s main business scope and… will help the transformation of our existing retail business.”

Wangfujing Group stock has soared over the past month since it gained a duty free licence. Source: Yahoo Finance, click to enlarge

Noting certain capital risks, and its status as a new entrant in the highly competitive duty free market, Wangfujing said: “The company will actively study policies related to the duty free business, accelerate the formation of a professional management team, and give full play to the [new] company.

“The advantages of our existing resources promote the implementation of related businesses as soon as possible… [we will] try to shorten the cultivation period of the new business as much as possible.”

Notes: 1) Wangfujing Group is attending the inaugural Moodie Davitt Virtual Travel Retail Expo in October. 2) The Moodie Davitt Report worked closely with Jason Cao at Global Travel Retail Observer (formerly Duty Free Expert) on this story. Global Travel Retail Observer is a Preferred Media Partner at the Virtual Travel Retail Expo. It will be promoting the event to its readership and meeting exhibitors.

About Wangfujing Group

Wangfujing’s first department store opened in central Beijing in 1955. The 39,000sq m store is still one of Bejing’s best-known shopping destinations.

Since 1996 the company has been scaling up its presence throughout China. The retailer now operates more than 47 department stores in 28 cities across all corners of China.

The company was first listed on the Shanghai Stock Exchange in 1993 and has since then been a part of the Shanghai Securities Exchange 30 Index, Shanghai and Shenzhen 300 index and SSE 380.

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