Zhuhai Duty Free Group and Hong Kong’s Lai Sun Group sign cooperation agreement for Hengqin

Zhuhai Duty Free Group Chairman Lu Junsi (right) and Peter Lam, Chairman of Lai Sun Group, co-signed the agreement during an online ceremony attended by senior management of both parties

About the Cooperation Zone

The General Plan for construction of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin was issued by the Communist Party of China Central Committee and State Council on 5 September 2021.

This was in response to Chinese President Xi Jinping’s call in October 2020 to speed up development of the project.

The 106sq k cooperation zone embraces a customs-supervised area between what has been dubbed the ‘first line’ and ‘second line’ of Hengqin Island.

The first line refers to Hengqin Island and the Macao Special Administrative Region, while the second line refers to the area between Hengqin Island and other Chinese customs territories.

The cooperation zone will develop new industries to facilitate Macao’s economic diversification. Sci-tech research and high-end manufacturing will be key, while traditional Chinese medicine and other Macao signature businesses and industries (culture and tourism, conventions and exhibitions, and modern finance) will be promoted.

Qualified industrial enterprises will enjoy a preferential enterprise income tax rate of 15%, while individual income tax rate for high-end and urgently needed talents in the zone will be capped at 15%.

CHINA. Zhuhai Duty Free Group and Hong Kong’s powerful Lai Sun Group yesterday formally signed a far-reaching cooperation agreement for the Guangdong-Macao In-depth Cooperation Zone in Hengqin.

Hengqin, an island in Zhuhai, is a prefecture-level city and special economic zone in Guangdong Province.

Under the agreement, travel retail projects operated by Zhuhai Duty Free Group will be hosted in Novotown, the hugely ambitious commercial real estate project developed by Lai Sun Group in the heart of Hengqin. Novotown offers an integrated tourism and entertainment experience.

The project is in line with the grand blueprint for the integration of Hengqin and Macao. The two parties pledged to fully tap their respective resources to create a new benchmark for tourism retail complexes within the zone.

Zhuhai Duty Free Enterprise Group Co was founded in 1980 (initially as Gongbei Duty-Free Shop) as one of the first wholly state-owned enterprises approved by the State Council. It is one of the pioneers of China’s duty free sector.

In the intervening years, the group has evolved into a well-respected travel retailer with a particular strength operating port stores in China’s southeast region. The group has operations in Zhuhai, Hong Kong, Macau, Hainan, Tianjin, Guangxi, Inner Mongolia and other urban areas.

Lai Sun Group has played a pioneering role within Hong Kong’s participation in the development of the Guangdong-Hong Kong-Macao Greater Bay Area. It made its first strategic move in Hengqin’s cultural, sports and tourism industry as early as 2009.

In particular, it invested in the construction of Novotown. The project is being developed in five phases with an eventual 1.45 million square metres of floor area serving tourism, culture, art, education, commercial, and entertainment purposes.

Zhuhai Duty Free said that its presence in Novotown represents full support from the Zhuhai government for the Guangdong-Macau In-Depth Cooperation Zone. The agreement also marks an important step forward for the group’s exploration of domestic and cross-border growth in line with its corporate strategy.

In its cooperation with Lai Sun Group, Zhuhai Duty Free Group promised to become a “high-quality retailer serving the convenience of residents” as its core positioning. It will also offer a “Freeport consumption + digital new retail” platform to the Hengqin development. This will result in a high-quality consumer experience centre anchored by a diversified ecosystem that integrates tax-paid and tax-free business, the group said.

Phase I of the spectacular Novotown in Hengqin District {Photo: Zhuhai Duty Free Group}
The Guangdong-Macao In-depth Cooperation Zone in Hengqin is a project of major national and regional importance in China

The first and second phases of Novotown are mainly devoted to shopping malls, entertainment, sports and education. The ultimate offer will feature Lionsgate Entertainment World (opened in July 2019); a National Geographic Explorer Center (September 2019); Fantasy Kung Fu Night and other projects, as well as a Hengqin Hyatt Regency Hotel (soft opened in late 2019) and themed retail and catering.

The project aims to integrate multiple elements of the tourism ecosystem into a new “one-stop tourism model suitable for tourists of different ages to eat, buy, live, and play”.

Future phases will extend the project into other tourist-related sectors and concepts – including Fashion + Tourism; Medical + Tourism; Sports + Tourism; Health + Tourism; and Island + Tourism – to boost the region’s development,

In the future, Zhuhai Duty Free Group and Lai Sun Group plan to  combine the advantageous resources of Hong Kong and Macao with the cultural tourism, fashion, commercial and retail formats of the Greater Bay Area and the Mainland.

Over the past four decades Zhuhai Duty Free Group has evolved into a major player within China’s burgeoning travel retail ecosystem

The partnership between the two groups provides a solid foundation for future development, Zhuhai Duty Free Group noted.

Going forward, with an increasing number of Macau residents living and working in the Cooperation Zone, Zhuhai Duty Free and Lai Sun aim to develop a premium, free port consumption centre fully aligned to the guidance of “streamlined border control and more stringent regulations on domestic flow of imported goods”.

The centre will be created on top of Novotown’s existing business formats and portfolios in culture and entertainment, sports, education, commercial, offices and hotels, and positioned as a unique platform serving Hengqin and Macau residents.

Zhuhai Duty Free plans further partnerships with Lai Sun Group across multiple sectors including culture & tourism, fashion, and retail businesses in the Greater Bay Area and Mainland China.

These renderings of the Gongbei Arrivals Duty Free Shopping Complex, courtesy of Zhuhai Duty Free Group, underline the scale and ambition of the Hengqin project

Coming soon

The Moodie Davitt Report is delighted to announce the launch of 穆迪达维特中国旅游零售报告 – The Moodie Davitt China Travel Retail Report, a digital magazine dedicated to our industry’s hottest market.

The new digital title, to be launched in early July, will be published in Mandarin and English four times a year across multiple platforms.

The launch edition will explore China Duty Free Group’s extraordinary rise over recent years to become the world’s number one travel retailer, together with a host of other high-quality features, analysis and interviews

This exciting new digital magazine from the world’s leading travel retail publisher will focus on all aspects of China’s travel-related ecosystem, including:

  • Airport retail (domestic and international)
  • Airport food & beverage
  • Airport advertising
  • Ecommerce
  • Land border, downtown and cruiseline retail
  • Mixed-use leisure and tourism developments
  • Offshore duty free retail and the Hainan Free Trade Port
  • Social media
  • + All the latest brand and retailer activations

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